Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1858-03-26

I such measure. Hitherto, the State of Virginia hat
placed her credit the firm basis Of dire ct and un
qualified sale at par. 1t has not been admitte d
ha, the sovepcy OF the State s precarious and it ha.
been assumed that the aae Of bonds, bearing six per
cent interest on principal guaranteed by sinking
fund, will of itself sford q more than ordinary in
ducsment for the investment of individual capital 1t
is not for the State to hawk her credit like ruined
spendthrift or to prop it by quackery which yields
an undue advantage of interest or Of power TO her
| creditors. Every such expedient acknowledges an
| unavo oidsble degradation of the State credit and
every such acknowledgement by the government o.
Virginia s the more mortifying because the admission
is false. The solvency Of the State undsputed and
indisputabe and her interest we'll as her dignity
demands that she shall offsr inducement for the
negotiation of loan except the punctual payment OF
the principal, and fair, full sufficient money price
for the use of the same In the form of interest She
must not allow her paper to be shaved. Still less
must she vainly attempt TO secure her credit by re.
sort to schemes which the civilized world has already
olassed among the obsolete niquities Of deosyed
ciey Rome farmed out the collection of her
to individual enterprise. The State received 61ed
amount, paid BY the farmer Of the revenues who was
permitted to indemnify himself by contributions
levied on the people. The same principle, in quail
fed form, is now proposed for adoption by the free
Commonwealth of Virginia.
Itis not, indeed, proposed that the State shall sell
the same sort Of governmental power to individuals
But proposed that she shall sell another of the
powers of government-that of determining the
mode of application Of her public appropriations.
| N tha of laoo
than farming out 10 individuals The functions OF
State Government.
Tho State of Virginia is to acknowledge in the first
instance that her credit s Of neees'y, below par, and
then inducemen to purchasers to buy at par they
offered the privilege of exercising governmental
functions which the Constitution vests in the LeRs.
lature and Executive of the Stste-not to be sold to
the highest bidder but to be erercised by these anc
tionaries of government.
Thss the bill which has passed the Senate involves
a constitutional infraction, which, We must believe,
was overlooked by every Senator who accorded to it
his support. And this infringement of constitutional
requirement s not more obvious than the consequent
danger which threatens the material interests of the
State.
Let us examine the matter in this latter aspect
II is universally conceded that the State csnnot un
der present circumstances, apply its own bonds TO
the satisfaction Of appropriations to works OF internal
improvements. without thereby mourning certain
depreciation of the State credit, by thus permitting
the railroad companies to sell State bonds to the high.
est bidder. Under any circumstances, similar dan.
ger would result from such an expedient
Now, the eIpedient proposed by the Senate, if
adopted will unavodably lead to all this injury to
State crsdit-indireotly indeed-but even more ef
fectually and in the manner. The only differ.
euce s, that the proposed scheme will necessste the
interpostion Of broker and add his commissions to
the bill of costs.
The modus operdHd, is easy. After preooncer,ed
agreement with railroad company, any capitalist
purchase State stock at par designate the appl
cation Of the purchase money by the state, sell the
Stock at discount, and then be reimbursed by the
company, both for the actual loss and the of bis
capital, The State will thus receive and pay to the
| railroad company the par value of the stock the
company will pay to tho oapitsst small per cent.
for the Of his funde and larger per cent to make
good the sacrifice resulting from the second sales Of
the stocks. The loss which will result to the comp8
ny will be rendered greater, by from one to two per
cent. than If the bonds had been voted Immediately
| to it's use. The latter, and more direct mode has,
/ then three recommendations over the round about
plan Of the Senate bill. Ii is legal more just, and
involves lees lose to the companies in whose favor ap
propriations have been made. Either method is in.
furious to the State credit by forcing the sale Of
| State bonds below par.
Even If the law of 1856 be considered broad enough
to apply to atransaction like thl. still the law
- -:.k: lii.
mits railroad companies to issue bonds and certi6
Gates Of debt "bsaring rate Of interest not exceed
| ing eight per cent" Then broker may buy State
bonds par, sell the sams at per cent discount
ceive eigh. per cent from the company to whose
he has designated the purchase money, and thus
pocket clear gain Of two per cent. This operation
mny be repeated oy the Of the came capital, until
the whole amount Of appropriation is applied and the
same amount Of State stock ia forced the market at
| discount. From two to three millions Of State stock
will thus be thrown into immediate circulation under
circumstances thoroughly adapted to the depreciation
| of State credit
The question then recurs is it just to the State it.
SELF to its creditors to adopt scheme, the inevita.
| BILE result of which will be to sink still lower the
price Of State bonds' We have already three causes
operating TO produce this reduction-ths existing
hypothecaon of State bonds-the State and corpora.
ton tax to which they are subjected, and the inpen-
ding resumption of specie payment by the banks,
which outstanding their resources TO Withstand
the Arst shock which will result. Ossa is already
piled on Pelian, and Pslian on the woody olympus
! The Senate bill, if adopted, will increase the burden
on the State credit beyond description by the climax
Of Longinus
! And there is no necessity for this quackery which
would send the great works Of the State around Robin
Hoods barn to edsctuate the application of appro.
pratons. Let the tax on State credit be repealed
Then wait few months, until the banks have fairly
tested their capacity incapscity to resume specie
payments. After this, millions of floating capital will
seek investment, and find none safe and profitable
as the purchase Of Virginia bonds. The bonds will
be sold ct par, the public works will receive the
pholc benefit, and, in all probability, the State viii
receive premium more than commemorate with
the paltry revenue which now enures from tax i'm
posed on her own credit.
| DR.. MACkAY.
On Monday evening last, the "poet laureate Of the
people," as he has been sptly styled, delivered biz