Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1858-08-20
VIRGINIA STATE DEBT.

"The State OF Virginia, under date OF Marcn I'd
1886, issued Certain amount OF Six per cent bonds
irredeemnble for twenty years from the 22d day OF
June, 1887, and afterwards to be redeemed at the
pleasure of the General Assembly" 1t was supposed
that the State would have such regard for it's own
credit that provision would he made for par redemp
on of the bonds after the 20 years had expired, but
this not 10 have been done. Recently, several
amounts Of these bonds have been received here from
Europe, under instructions to obtain, either the prin
cipHl at par, or new bonds for an equal amount.
If are rightly informed the authorities of the State
of Virginia decline to accede 10 either of hese propo'
silions. The holder ha accept of their offer must
retain the old bonds, redeemabe " at the pleasure oil
the General Assembly," and therefore not readily to
be negotiated. re them 10 this State which offers
Tor them about go cents to the dollar out OF the sink.
ing fund: or exchange them for new bonds by an
additional payment of one per cent Ia 1t true that
the great State of Virginia has no better proposition
for her creditors than this Has the old mother of
statesmen and heroes become catch-penny-6roker
and Is The Treasury of the State turned into shaving
shop1"
And the New York Commercial Advertiser, harp
ing on the same string, ndulges in similar strain:
There ia considerable dissatisfaction at the course
othe Commonwealth OF Virginia. In regard to elass OF
bonds issued In 1887 These bonds redeemabe after
twenty years from the ISSUE and the holders very naIu
rally expected the redemption by the State when
thar term expired We understand, however, that this
redemption refused and that this State In the market
purchasing them at 9i per cent below the current
rate of the coupon bonds In our opinion this is small
business and likely effect the credit Of the State
great deal more than will make by the operation
This growing of the Bears shews disposition, it
| possible, to run down Virginia Securities. Aud as
soon as the object is accomplished the very who
are now so borrifsd ct the idea of turning the old
State into shaving shop will be the fret to take
advantage of the depression which they have created
We have had occasion 10 refer to this subject on
several occasions heretofore and to explain the action
,bo ,b, of 0io6io
| Fund But as misrepresentation are continually
made to the prejudice of the stock. will not heel
| tate to repeat our explanations.
There are three species Of debts of Virginia, Gre
aed prior to the adoption Of the new Constitution
First. Those redeemable at given day, to be paid
when that day arrives and, of tbis not dollar is
now due, and much the greater portion will not be
due until the year 1886.
Second. Those redeemable at given day, and
thereafter at the pleasure Of the General Assembly
that pleasure not to extend beyond Is years. OF this
the whole amount does not exceed 1928 $50; and the
day Of payment has arrived for the whole but it lie
expressly stipulated in the law authorisng the loan,
and on the face of the bonds themselves, that the
payment may be postponed for Is years; and the
bond holders have no right to expect the payment
until the Is years expire.
Third. Those redeemabls al given day, but there.
| after at the PLEASURE OF THE GENERAL ASSEMBLY,
without limit. OF this class, the nominal day OF pay
ment has arrived for about $1,000 000 but the law,
in the last case, expressly provides, that when the
day comes it sha be at the pleasure OF the Legsla
ture 10 redeem mott and the payment may be post
poned indefnitsy-and this is also stated on the face
| of the bond. Under these circumstances none have
right to complain, go long the interest is promptly
paid even though the debt should be continued for
ever, and be, as the English debt ia known to be,
perpetual.
| At the time these debts we're contracted, it ia well
known that the words 'at the pleasure Of the General
Assembly" were inserted in the statute to give the
State the right to redeem rather than to compel her
to pay, because it was the general opinion among
capitalists that the longer the stocks had to run the
more valuable they considered, and it was
deemed az inducement TO a loan, TO make the day Of
payment long possible, and this would be 30 now,
If the stocks we're above par.
But The people of Virginia in their last Convention
determined that limit should be put upon indebted.
uess, and that all the debts of the State should be
paid within thirty four years. and ample provision
has been made therefor by the Constitution by setting
apart sinking fund which will accomplish the object
in the time specified. If every debt the State owes
not quidaed within thirty four years from its Gre
alton, then will the Bears have right to complain.
The General Assembly at ts last session provided,
by an act upon this subject that "the Commissioners
OF the sinking fund shal hereafter annually apply the
entire residue of that fund after the payment ofnterest
on the public debt, follows viz: $50 much of said
| a. ha dahl
existing on the first of January, 1852, together with
the proceeds OF the Gales of Bank stocks, shall be ap
piled to the redemption of such part OF said debt as
may be redeemable and if no part thereof be redeem
able, the said residue shall then be devoied to the
purchape at their market value, and cancellation Of
any outstanding bonds certificates Of said debit
And 20 muoh of aad fund as arises from per GEN.
tum on the debt created since the first day of January,
| 1852, shall be invested in the outstanding bonds or
| certificates of the said debt at their market value,
and held by said commissioners for the benefit of said
fund.-
will be seen by ha law that there are two kinds
of debts those prior TO 1882 redeemabe at different
periods as have explained and those subsequent to
1852 not redeemabe until the expiration of "a years
respectively from the dates of their issue. The first
class the Commissioners of the sinking fund are re-.
oured to redeem when redeemable; for the last
class they are TO invest their funds in bonds to accu
mulate a fund with which to redeem them when they
| become due.
To show how unjust s the charge now brought
against the State it is only necessary TO refer to
the action Of the Commissioners last year. when they
were redeeming the State debt They advertised to
| optd haua faaad ha
low par; and they redeemed FIVE per cent bonds
when they could have redeemed si1 per centsi and
they acted upon the principle of justice, that the
Oldest orediter should be- paid first without regard to
the rate of interest. When they are in funds for
redemption again. they expect to advertise to redeem
A. psr but they reserve to themselves the right to
| r.deem whichever c,ass of debts they think most
advisable. They are the agents of the Legislature,
| and the Legislature has the right to redeem these
b,nds at lite pleasure, and in selecting, the Comms'
sioners are but exercising that Legislatures pleasure
But the particular holders Of State stock in 1886 have
no right to expect their certificates of stock to be
ferred; because there other stocks, issued prior
| 10 theirs, which ought to be paid frst
| To show what wers the views of the Commission
ara of the sinking fund, quote from their report
to the General Assembly at its late session. After
ernlsinipp "a we have done, that there were three
oasses of debts and that the third class consisted
of tboss redeemable given day and thereafter at
,be pleasure Of the General Assembly, the oommis
sioners cay:
prior to the adoption of the Constitution, the pay.
nent of the third class Of bonds might be postponed
indefinitely. But since that time, by its provisions,
an amount ia required to be set apart which must
deem the debt ia less than thirty four years. and s
worthy of note that the given day of payment
of the entire debt will arrive at or about the e1
nrsion of the thirty-four years. The Legislature.
therefore by the Constitution, has longer un-
limited period for the exercise Of its pleasure as to the
entire third class, and it has eonformed to the Consti
tuition by appropriating, annually, q sum exceeding
the amount Of annual interest on the debt to redeem
il within the required time; and moreover, has di-
rectsd its agents. the Commissioners Of the Sinking