Collier to “ Temple , February 28.”, March 1, 1867

[Untitled]

Subjoined is a question of considerable importance in its bearing on the confederate cotton loan, with the opinion thereof of Sir R. P. Collier, the late solicitor general:

“QUESTION.

“Whether or not merchants and others, on being sued in England by the government of the United States for property or money held by them at the termination of the war belonging to the southern States, may not successfully plead the confederate 7 per cent, cotton bonds as a set-off, to the extent of the amount that each defendant may hold of them.

“OPINION.

“In the event of the United States government suing in the courts of the country for debts due on property belonging the late confederate government, I am of opinion that defendants, who may be holders of confederate cotton bonds, are entitled to set up a counter claim against the United States government in respect of these bonds.

“This counter claim will be founded on the principle, that if the United States government assert in our courts claims accruing to them through their succession to the property and rights of the late confederate government, they are bound by the liabilities of that government.

“Should the United States government bring action of debt, I think that the holders of cotton bonds may plead them as a set-off. Should they proceed for a tortious conversion of property, a technical difficulty will stand in the way of this defence, and it may be necessary to resort to an acquitable plea, or possibly to the protection of a court of equity.

“The equitable case of the bondholders will be strengthened by the facts that the United States government have possessed themselves of the cotton set apart as the security for the payment of the bonds.

“The form, however, in which the defence I have indicated may be raised will be matter of subsequent consideration when the mode of proceeding adopted by the United States government is known.