Holmes County Republican. [volume] (Millersburg, Holmes County, Ohio) 1856-1865, 1860-01-12

ruHuS granted Dy congress. ne tOrmer may
be reduced BY payments; the latter must con
) tiRue TO increase as long as the proceeds o
school lands are used and funded as now direct.
, ed by law, and under the existing pledge oi
six per cent, to the purpose for which the School
Lands were granted.
In January. l645. after the completion of the
Public Works. and after the abandonment OF
the policy of aid 10 Public improvements by
State subscriptions TO the Stock of Railroad
Canal and Turnpike Companies, the entire debt
was $lS.25l.170; of which the Redacible Debt
was 81, ,057, and the Irredueible $I,455.-
1913,
From that time the Reducible Debt was grad
ually diminished, until the defalcation and debts
contracted in anticipation of revenue created
necessity for the Temporary Loan of 500, 900,
which was authorized by your predecessors and
negotiated in 1858, and is reimbursable on the
lst of july, 1860, and lst March, 1861.
! At the close Of 1859 the entire debt was thus
constituted: The Foreign Debt was $l3, ,62l ,s57
20; the Domestic Debt. S275,3e5; making the
whole Reducible Debt Sl2 S97 ,242 90; the r.
Temporary Loan $T00,000, making total of
$l7I3l ,3l9 Is. From this amount may be
properly deducted $26S.l5 already collected
for part payment of the Temporary Loan.
1t will be seen that in sixteen years the Pub
! lie Debt has been reduced only by the sum Of
| So 1868 $50 The sums received in the same
time from the Surplus Revenue, sales of lands,
| from the Public Works, and few miscellane-
Gus sources other thnn taxes were Sc, ,687, ,947.-
The greater part, ofcourse was applied in pay
ment of interest, of reduction of principle.
Provisions of the Constitution prohibited the
increase and required the gradual extinction of
the debt. An act of the last General Assembly
was Intended to secure the result. 1t authori-
zes, whenever any portion of the debt shall be-
come payable, the issuing of new bonds TO an
amount sufficient to discharge it. Those new
bonds are to be made payable in such INSTALL
ments that the annual levy required by the Con-
stitutinn will supply the means for their pay
ment in full at maturity; and the act requires
their payment accordingly without renewed and
without delay.
{ This plan, if persistantly adhered to, will cert
ainly extinguish the whole Reducible Debt; but
the operation viii require thirty-one years, and
many circumstances may occur to suspend or
frustrate its result My own impression is, that
the wishes of the people will be better consulted
by provision for earlier payment and consequent
relief from taxation for interest. Should your
opinion be otherwise, you viii do nothing, trust,
IMPAIR but everything to secure the certainty of
payment within the time limited by the act.
On the lst of January, 1861, ifit be the pleas
ure of the State, Sc, Ala, ,225 81 of the debt may
be paid. The contract of loan, however, does not
impose the obligation of payment at that time
The whole duty fthe State will be performed by
punctual payment of int, rest, and such provision
for the discharge of the principal as may be re-
quired by the interests and wishes of the people.
Whether it be thought expedient or not to
adoptthe scheme of payment proposed by the act
of last year, some change will probably be found
necessary in the description of bonds to be issued
That act, as originally framed, and as it passed
the Senate by an unanimous vote, contained pro- |
visions exempting from taxation the bonds to be
issued under it, and also judicious discrimination
in favor of loan takers within the State. 1t was
amended in the House by striking out the pro-
vision for exemption, and in that shape became
law. The discrimination in favor of domestic |
bondholders was thus converted into dscrimina-
ton against them; for, under the lawas it now
stands, taxation of bonds will not reach foreign
holders.
Isuggest the expediency, therefore, of autho-
rising the Commissioners of the Sinking Fund, if |
they Shall be of opinion that the interests Of the
State require the payment of the debt upon accru-
al of the right of payment, to provide fori either
by new bonds, at any rate of interest not exceed
ing five per cent, reimbursable At pleasure after
a term not exceeding ten years, or by bonds issu-
ed and contemplated by the act, and bearing inter-
est not exceeding si1 per cent In either case the
bonds should carry upon their face a stipulation
expressing their true character, as subject or not
subject to reduction by taxation or otherwise. If
the bonds of the State are to be taxed at all,
there Is far more reason for their taxation in
the hands of the foreign than of the domestic hol
der. Neither should be taxed, or both. Both
should be taxed, if at all, not by uncertain asses
meats, but by reserying from payments of interest
sums equal to the average taxes for all purposes
on other property of equal value. Ifit be object
ed to this mode of taxation, that it takes back with
one hand the interest paid with the other, and is
therefore equivalent to mere refusal to pay the
full rate stipulated, the answer is obvious, that the
same objection applies, Just and forcible to every
mode of taxing bonds given for money loaned to
the State. It is a very serious, and, in my judg-
ment, an insuperabe objection, unless the right of
taxation be reserved on the face oft the bonds when
issued. Whether bonds bearing such reservations
will find takers can only be determined by trial.
That they will not, is more than probable; and if
hey will not, it is certain that the taxation of
State bonds is alike impoItic aDdunjuss.
l recommend, therefore, such legislation as
viii give the suggested discretion TO the Commis-
,oners, FIX beyond liability to alteration the rate
If interest, and secure the control, reduction and
inal payment of the debt, at the earliest time and
h the most economical mode.
The two great lines of canal, including the Wa
lash and Erie, with their feeders, cost $l2,ll0,-
30; the other canals, with the Muskingum i'm
and the Western Reserve and Maumee
Road, cost So, ,467, ,ll2 and the amount subscribed
o turnpike and railroad Companies, was So ,226,-
go, making an aggregate cost of $l8, ,s03,922.
For number of years, the net revenue derived
rom these works though never sufficient to pay
he costof the investment, were very considerable.
The competition of railroads, however, soon de-
rived them of great part of the business on
which reliance had been placed for increase, and
It length marked decline took place. Within
he last few years the outlay for repairs and i'm
has exceeded the income. The real
deficiency last year, after reducing the extraor-
linary disbursements directed by the Legislature,
vas not large but there is little room for hope that
t will be less hereafter, while there is much
ground for apprehension that it will be greater
i will certainly be greater, unless the introduc
ion of steam navigation, or other navigation, or
,ther circumstances now unforeseen, shall enable
he canals to sustain, at less disadvantage, the
abroad competition. The cost Of these works,
however has doubtless been repaid to the State in
he increased value of lands in the counties through
which they extend. And this consideration may
gell abate the censures which thedebt contracted
'or their construction is apt to provoke; while it
suggests caution and prudence in dealing with
interests so important as are involved in their dis
,osal.
have heretofore expressed the opinion that
hey should not be retained under State manage
nent, if sale can be effected at reasonable
price, and under such restrictions ana guarantees
Is will secure to the people the benefits of trans
oortaton originally contemplated. That opinion
III