Lynchburg daily Virginian. [volume] (Lynchburg [Va.]) 1852-1861, 1854-04-13
Speech of MI M r. II. Garrett of Essex.
Made in The House Of Delegates Of Jirgiaia
March End, 1851.
March End, 1851.


The same want of controlling legislation is
felt in the management OF our bonds. The
House knows that no information was given US
at the beginning Of the session of the disposition
which had been made of the bonds of the State.
We were left ignorant of the value of our credit
and of the obligations we had incurred. We
asked the Auditor; but he too was ignorant, and
it was only after repeated calls-oalls too that
were resisted in the most extraordinary manner
that we have even at this late day succeeded
in obtaining reply,at all definite. II still leaves
much to conjecture, but IT discloses the fact
that as the Board created an agency to superin-
tend the Coyngton road so they have delegated
their powers over our bonds 10 Selden Nithers,
& CO., firm of Bankers in Washington. The
delegation is full and complete, for the only res
friction, that the bonds shall not be sold under
par. without the direction of the Board, is per-
feetly nugatory. 1t seems TO imply power in
the Board to 81 under par, but in fact, such II
sale is expressly forbidden by law The delega-
ton is more than complete, for it conveys pow
ers which do not think the Board itself poss-
esses, ltpermits the agents TO mortgage aud
hypothecate our bonds AT their own discretion
without informing the Board with whom or
what terms the hypothecation is made
All the coupon bonds transferable as they nre
by mere dehyery,pass through the hands OF these
agents; the Board has no direct knowledge of the
purchasers; the money is received by the agents
and all the interest is TO be paid through them.
And vel security whatever is required! The
Assembly elects the Treasurer and Auditors; and
yet they have 10 give ample seeurity bonds are
required of the Sherifs and other fiscal officers,
chosen by the people themselves. But these
foreign agents, amenabe to none of Your laws,
have almost unlimited control of our bonds and
money without any security whatever.
Such an agency, involving the present dispo-
sal of ten twelve millions of our bonds, and Ill
timately the handling of twice as much for the
payment of interest, is, of itself, an immense
gain to the fortunate holders, by extending their
credit and Importance to the financial world
But, Selden, Withers x Co.. receive n farther
compensation. The Board allows them n COM
mission of one per cent. on the gross amount of
sales; the interest paid through them, is to he
placed in their hands, in specie, fifteen TO thirty
days before it falls due in New York or London
giving them the use of it for nearly that time
They are entitled To all the difference of ex-
change between New York aud Richmond, re-
eeiying the proceeds of the bonds in specie III the
former city, and paying us in currency in the
latter: and they have besides the free use OF
SG00,000 of our coupon bonds. Add to this the
power of hypotheeating all our bonds, which
there is nothing To forbid their doing in order tc
sustain their own credit, and the House will n
gree that 1t Is hard to estimate the profits of thi,
agency too highly.
In return for these valuable privileges, VIVA
have Selden, Withers, a Co. done with oui
bonds! The information before us is not so full
or precise, might desire. The Board itself
as said before does not know with whom or on
what terms, bonds have been hypothetical, and
even in case of sales in the United States, no cop
les of the contracts communicated to them.
Everything is left to the almost unlimited discre-
ton, and 10 the good faith of the agents A part
of our account with them is not kept by the
Board, as we may infer, for the answer to our
inquiries delayed until two of the accounts
contained in the communication of the Odd OF
February, could be received from the agents
That communication, however, informs us that
SS30,00O of bonds were sold to various parties
between October 10th. and December 22d of las
year at rates varying from one to six per cent.
being an average of 2.s2 per cent, or Welding
after deducting the agents commission, a ne
premium of |. 80 per cent; | will remark by til,
way, that when the agents make a sale at ont
per cen. premium, nominally, it yields the Stat,
less than par, an ! is, in my opinion directly con
trary TO law. But it is curious in the aecoun
OF these sales to find some at six per cent AM
others on the same day at only. one percent.
and what is especially remarkable is that al
though the sales were made at various date
last year, yet not cent premium eve
paid by the agents, until after the Legislature
had begun its inquiries into the whole subject
Then on Feb. I'd, the Board received draft 70
S15,120; where was this money in the meantime
and who had the use of it!
This sum of $i3,l20, is the whole amount o
premiums ever yet received from these agents
and it really seems doubtful whether any othe
actual snles of our bonds have been effected. !
is true, that contract has been made with TIL
Barings for one million certain, and two million
more conditional, from which no money has ye
been received. This is the only contract, be
lieve which the Board has in its own possession
~ fharob 7 and afhar uamhers hay e sepn il
and we have been partially informed of its con