Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1858-06-01


moro cherished purpose than to make the su'npte w
u debt provide by taxation for its payment liz
this constitutional responsibility is avoided oy ,ne
loan -,stem. | have already attempted to show. Dut
from the sinking fund, most WAS expected. Noo'ot
wanted the debt then existing to remain a perpetus'
mortgage upon the means OF the p-ople, and the sipk'
ing fund was not only to pay it OH, but 10 maxi
each generation pay is own debts in the future
I; il even now relied upon by the advocates OF aP
| propristions rs d security against danger from the in
increase of our debt. Let us see. then, hoT Il hss
work.d thus tar. and whether it really affords u tins
security. The Legislature, in 1888, passed an act 10
establish this siuklng fund, as required oy The
Constitution. They found the debt existing on
ths Isl January, lSj2, to be Sll,9Il ,s3S, aud pro
vidal a flnd tor the discharge Of this and all the future
debts of the State. Yet, on the 3Oth September,
1857. after less than six years OF is operation, the
commissioners of the sinking fund report 10 I'd an nh
redeemed public debt Of $27,2iI.lSo IL 'his kiho oi
nsvmsnt 20 an for 30 wears longer, the present gene
ration. instead of paying its own debit VIII transmit
one of more than Il hundred millions 10 t"' seuet"'
| ton which succeeds il. What Il complete ue'uson'
then, is a sinking fund, when the Government c'h'
| tinues to borrow, each Year, more than II reaeeuls :.
| But let the fund increase faster than the debt wiz 1t
BIZ inviolate =! or are paper Constitutions uhc""nEo
| able Ii will not be denied, ut least, thht our Nv"
| siuking fund. like the other treasury GUARDS OF lne
Constitution, has hitherto wholly ialled OF lis lntenu.
I'D effect. So far as it has made II easier tor Inc stste
to borrow money. it has served "a an instrument ~
increase, not to diminish, the public debt.
Yet the growth Of our debt seemed, at first TO De
arrested by the various restraints OF The CONSTITUTIONS
The Legislature of 1852 adjourned without doing any
thing TO increase it. During the first session under
the new Constitution, none of the companies coull
get an, money from the Treasury. They required
time to rally and unite their forces against The he"
ensIny in their path.
But, in 1853, the banded power Of the great corpo-
rations of The State, always, before, too strong for the
representatives of the people, now proved stronger
than their Constitution. \ combination was now
formed, lar = enough 10 secure the 'constitutiOnal
vote and the Legislature OF 1893 voted away De
tween n and eleven millions of dollars in the form OF
appropriations, loans and subscIi ptions, 10 more than a
hundred improvements. To meet this enormous al
dition to the annual charge upon the treasury, lheS
increaaed the taxes only from Is 10 ~ cents III The
hundred dollars! Aud the Legislature ut 1881, du
ring their short session OF ninety days, voted more
than a million 10 internal Improvements, without
raising the taxes Mt al! When tn" General Assembly
met again, after the lapse ut Two years, II became me-
cea.sry for them, by a single blow. TO doublc taxation,
AT nncp, upon all taxable subjects. They had now to
pay seven per cent. upon n debt Of more than twenty
fonr millions; they bad to provide tor II deficiency OF
81 ,6J0, 60h for the currrp. year; aud, Tor the year
ensuing, il WAS estimated that the rereipta from all
source. would fail short more than SSOO,UOU OF the
necessary aunnHl disbursements. We had not only
borrowed TO build roads; we had borrowed more than
! a million 10 meet the ordinary annual expenses ct the
Government. We had l. Errowed, in tact, an!ll We
could borrow no more. fbT frRlDlh sA pei Vrii'
bonds, which commanded n premium Of ten per cent
when the Sinking Fund was tirsr established, leas
than three years before, could not now be sold al all
ct the Treasury. and were at n discount OF hve per
cent. below par IN the hands OF tie brokers.
Here, ri lra-t, il was thought, the public debt had
reached u barrier TO lie further progress Ii would
now stop growing, because II had consumed the Gre
dit which nourished it. The foundation, upon which
it WIS built, had nj lsrt given away, Under lie weight.
and could bear no more. The abuse Of borrowing had
destroyed it, efficacy; and now, ut isast, soin-thIng
was 10 be expected from the Sinking Fund. For no
new loan could be made until public credit was r..
stored, and sinking funds were known to be moot etli.
Gent in the redemption OF debt when the public
bonds we're lowest in tho market. 1t was enacted,
too at the session of 'jj, that our sinking fund was 4"
be further increased by the proceeds from the sale o.!
the bank stock held By the State.
When we meet again thia winter, what do We
iud1 Our Jnds have got no nearer TO par eince the
last session; indeed, ibsy have been cold at u discount
Of more than 80 per cent during the recent revul-ion
Yet we have. during these last two years, HI addition
of nearly three millions TO the debt ot Virginia p!
.Sk0tc JOndS have been paid 10 the public creditors in
exchsng, for drafts OF The Board Of Public Works To
the amount of $2,7l9,l0O, and it seems that through
the means of the sinking fund, itself. new bonds Tor
tl60.9i7 were issued from the Treasury, at a time
when their value in the market WIS only ninety cents
in the dollar!
II is Il startling, but not Il novel history this history
of the debt of Virginia. A similar story might be told
of the debts of other governments. Though the
funding system is 81 comparatively modern origin.
such has been its progress that the aggregate public
{ bits OF Great Britain. France, Spain, Austria, Rus
ala and Holland, already amount to eight thousand
millions of dollars! Adam Smith,, after Il profound
investigation Of the subject, did not hesitate TO de
clare, that when national debts had once been aocu.
mulated TO a certain degree, there WIS not, in history,
Il single instance OF their payment; and that the libe
ration Of the public revenue had never been effected.
except by n national bankruptcy. Az for The sinking
fund of HE own country, instituted to pay old debts,
he thought it had only facilitated the contraG. lou of
new debts And the debt of England, which, by It's
magnitude, two centuries ago. excited the alarm Of
this profound :hia.:-r. is now six times ~ large a.
when he wrote the Wehltl, nf Nations. Despite his
warning voice, despite Pitts boosted sinking fund,
unchecked by adversely or prosperity, il has lncreas
ed and increases until now the ecof 0miats and hisfo.
riana Of England no longer venture to tell the truth
about it, consequences; until now it il four thousand
million dollars; until now the taxation of England lie
said TO be one.halt the entire wages OF her laboring
classes. and her people pay annually one hundred and
fifty millions Of interest upon the debts of preceding
generations.
1t would seem, such is the fatal facility Of paying
debts in promises to pay. as if there were no return.
ing Track for nations oncs entering into this pathway
of public Indebtedness.
England may have %prospered in spite of her debt
| But when this prosperity fails her-whan the acci
dents Of adverse fortune befal her-when old age
(which belongs to nations a. 10 individually comes
upon her-how will she then bear q burden which
| CTuslrS v uOWU,H VtU now, III III lays DER pUNf
err Will it not fall, whenever the scadolding gives
away. like the blow of death upon her people7
Is there no warning in This history1 Shall we fol
low in the steps OF Englsndi We have already seen
our own debt and taxes 90 on increasing, until the an
nual charge upon our people for the support of their
government has become nearly ten times az great IA
it was only twenty years ago. We have seen this debt
elude in its progress. the guards alike of the law and
the constitution. We have seen it enlarged and con.
| solidated by tha very means through whiriI il vas IN
ba ur,iDuuiabad md uou an tnp midst Ii n anvpra
| commercial revulsion; with u large floating debt vet
To he paid by taIve; with q conceded deficit in the
Treasury At the end OF the year. varying according 10
the vsrinus estimates, from 3 1000 Ia Si23. O~00-when
our banks are in suspension, and Virginia herself,
il paying 10 her creditors, instead of the currency Of
the constitution, especial deposits of deprecated
and iDcnnvrr'ihle paper-if IN proposed to increase
this debt stlI further. 1t ia proposed To add only =
raw millions this year, upon d scheme o! legislation
which will require many millions more in the future.
Ii i. proposed to borrow this money upon State bonds.
and below par-so that, IL make our appropriations
avail the companies, We muat reverse the !mmsinc"Iai
policy OF Virginia, and eel her bonds a /. discount at
the Treasury; or. what is still wo!se. the contractors
on the public works. "a 10 SUBSTANTIALLY proposed by
a bill now pending, must he poid in State bonds at their
market value, which, under such legislation. II II sale
TO predict, must continue To 20 ~downwards. And
even the tax bill Of the lat session. intended n Il TEN.
porary measure to pay of = floating debt. ia made an
argument for this further increase of our funded debt.
For the present, high rates OF taxation are not frea'ed
a. temporary, but rs pernanent-until incrensed; and
the surplus which they raise above III. ordinary
charge Of the government 10 pay the principal of An
old debt, ia TO bs diverted, before the old debt is paid,
10 discharge interest upon new ones.
Ought not The considerations then. 10 bn urgent in
deed, which demand an addition to the debt Of Nir-
yinia, at a time like this! When, uuder such circum
stancss, a powerful party thus press for its increase, it
il time 10 paGse and ace where we are going-tor return
to fundamental principles, end enquire in what cases
il is right tor public debts to- be contracted.
BY the funding system. the existing government, has
no need to taZ--it hss olly Ia borrow, to supply is
wants. and transfer tha burden .! paying for them 10
q future generation. LIS Ell :cts 10 Europe have been.
prolonged wars, enormous public debts, pspar money,
and national bankruptcies, either total or partial
Could auch a system he justified u, all. if the question
were new Bur, unfortunately, IL ia no, always posi-.
bile for a government 10 keep c!tar "f the credit sys
tenn, whether in the form OF q public debt or n paper
currency, when other governments resort To il -