REPUDIATION, a term signifying the refusal of a national or State government to pay pecuniary obligations, especially bonds or other evidences of borrowed money. Nearly all lead ing countries have at some time in their his tory, repudiated indebtedness. England has never repaid money borrowed for public uses from a Florentine merchant by one of the Ed wards, and prominent London bankers were ruined when Charles II confiscated their funds deposited in the royal exchequer. France re deemed the paper money called assignils at one-thirtieth of its value. The United States failed to redeem the Continental currency. In the disastrous financial period of 1840 and sev eral subsequent years, the States of Illinois, Indiana, Pennsylvania, Maryland, Mississippi, Michigan and Louisiana suspended payment of interest on their debts incurred in promoting public improvements, but all of them, execs Michigan, Mississippi and Louisiana, eventually fulfilled their obligations as to the capital of the debt. Governor•McNut of Mississippi advocated ((repudiating • the sale of certain of the State bonds,' on account of alleged fraud and ilk» gality in the issue, and this was the origin of the popular use of the term €repudiationa as ap-, plied to that course on the part of a State. The legislature of Mississippi refused to accept the governor's suggestion, but while the bonds were not formally repudiated, they were not re deemed. Michigan provided for the repayment of money actually received, repudiating obliga tions shown to have been issued without a fair equivalent, even although in the hands of in nocent parties. Louisiana paid her creditors in depreciated State bonds. Minnesota refused to honor certain railroad bonds guaranteed by the State, in 1858, claiming that the railroads had failed to comply with the conditions on which the guarantee was given. The question of pay ing this indebtedness was agitated for many years, and finally in 1880 Minnesota com promised by agreeing to pay 50 cents on the dollar.
After the Civil War the Southern States' fell largely under the rule of unscrupulous poli ticians known as ((carpet-baggers,* intruders from the North took advantage of the prostrate condition of the Southerners, and inflicted much wrong and injustice. Obligations were issued for which no reasonable equivalent ever reached the State treasuries, and the impoverished com munities, when the native whites obtained supremacy again, found themselves deeply in debt. Georgia, Virginia, North Carolina, South Carolina, Florida, Alabama, Mississippi, Louis iana, Arkansas and 'Tennessee either scaled their debts to a figure which represented value received, or refused to pay obligations alleged to be tainted with injustice and corrpution. In all, the Southern States scaled down their in debtedness from about $235,000000 to a little more than $100,000,000. While there was rough justice in these reductions, yet the natural re sult was that foreign investors were shy of State securities for many years. Cities and towns of the United States have sought at times to repudiate a portion of their debts, and in case a city actually is bankrupt, it is not clear' how the debt can be collected. Under the 11th Amendment to the national Constitution, States cannot be sued by individuals, and creditors are, therefore, powerless to attempt collection in the courts.
Spanish-American republics, with some hon orable exceptions, have persistently ignored their financial obligations. An attempt by France, England and Spain, to collect debts due by Mexico, was the cause, or more correctly the excuse, for the ill-fated effort to establish an empire in Mexico, with Maximilian on the throne. Since the growth of Mexico in pros perity and position among the nations, under the beneficent despotism of Diaz, the Mexican government has voluntarily taken steps to meet its financial obligations.