Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1868-05-26


on the rise proposed. A copy OF the law
under which we propose 10 do this
strange thing. was sent to these gentle-
men while il was pending, aud moulded
by them to suit their purposes Thus we
are suffering Wall street not only to con.
troll our credit, but 10 make our laws.
Enough has already been stated to ex-
cite suspicion that this is simply bull
movement, and when we shall have
demonstrated that no possible benefit ls
10 result 10 the State from II, we shall
pass from suspicion TO assurance. II Is
asserted in the preamble, and calucla-
ton is adroitly made to show that the
State will save three hundred thousand
dollars on each million of our bonds
purchased. This trick of figures is made
in this way: Issue 100000 of seven
per cent. gold bonds, sell them at par,
and buy one million of our six per cent.
bonds at seventy cents on the dollar I;
than we shall owe 100000 less by
the operation. Only an old woman or
a young child can be deceived by this
trick OF the slate. 1t is the interest on
our bonds which most oppress us. Tho
interest on the 81 100000, in currancy
bonds, at six per cent, is 100000. The
interest on the S700, 900 in gold, at seven
per cent, is $4,000, which, at 81 40,
lthe averages cost of gold for year past,
amounts to $6S, 600. Loss ofinterest to the
State per million, $8600-
But it is said we are to pay the prlncl-
pal at the end Of FIVE years, at which
time we will save the $300,000. Let us
see how this will be. Each year we will
have lost in interest $4,000, which, in
Eve years, will amount to $4,000. We
must then buy the 100000 in gold,
which will cost us 1880, 0,000-gaining in
the principal, $4,000. Net loss per mil
lion, $4,000. To this must be added
the cost of executing and selling the
new bonds, fees Of brokers agents, etc.,
several thousand more. Thus passes
away this 10000 bubble. Besides it is
not likely we will be able to pay any por-
ton Of the principal of our State debt in
FIVE, or even ten years, except through
the sinking fund. This, however, will
depend upon the management OF cur
railroads. Nearly six-sevenths of our
whole debt was contracted by loaning our
bonds to these reads or indorsing theirs,
and they are bound for both principal
and interest. III the present manage
mentis continued the prospect is indeed
gloomy, but we hope the Legislature Will
soon sell or lease them, and relieve the
taxpayers. Certain it is, we must look
to these roads, and not TO gold bonds or
stock speculations, for the means OF pay
ing our debts.
1t is difficult to see how the sale OF
gold bonds and the buying of currency
bonds is to enhance the State credit.
If we would keep the issuance of the
gold bonds secret. and make Wall
street believe we are flush with funds,
we might succeed; but, unfortu nstely,
the operators there understand our
finances better than they are understood
bv this Board. One million OF our
bonds matured few days ago. We
have.notifed the world that we cannot
pay them, and that the holder must take
a new bond and wait thirty years longer.
1t is likely when our agent calls on
New York bondholder with 500 to buy
one of our lately issued bonds, he will
meet with an overdue bond, upon which
the holder would like to have $1,000.
1t is insisted, however, that gold will
70 down in less than five years, 80 as to
be as easily obtained as currency. On
the other hand, gold may go up to 200,
and, in view of the present political situ-
alton, the one is as likely as the other.
And this brings us to a feature OF the
proposed scheme which is distasteful, If
not dishonoring, to every Tennesseean;
By going into the market on borrowed
capital to buy our bonds for gain, the
State becomes stock jobber in its own
funds. Other States and the General
Government may have bought in their
bonds at par, or at premium, or may
have exchanged securities of a different
character, but for proud State to offer
to buy its bonds at two-thrds OF their
value is unheard of. If it be creditable
to grab this million while our bonds are
at 65 cents, why not sell out when we
have got the price up?
Why not refuse to pay the July inter-
est and put the bonds down before we
buy Why not let us bear as well as
bull the market? r
If we continue to tax our people to
their utmost capacity, as we are now
doing, and pay as far and as last as we
can, il will do more to enhance our credit
than borrowing money at ruinous rates
of interest and selling gold-bonds to get
up a speculation in our currency bonds.
Let the Legislature, when it assemblies
this fall, lay hands upon such railroads
as fail to pay their interest, and dispose
Of them by sale, lease, or in any other
way that will relieve the treasury. by
that time our receivers will probably be
rich enough to take care of themselves,
and stockholders must meet their fate.
MR. wATsoN's ANSWER.
Mr.. Watson ably defends his plan in
reply to a communication IN the Press
and Times Of the 10th inst, over the sig
nature of "Tax-Payer " We are unable
to PRESENT. it entire, but the extracts given
below are sufficient to explain it,
The best reply can give to these mis-
representations and unfounded insinus-
tions Of Tax Payer" will be plain and
clear statement of facts.
The Indebtedness of the State on the
bonds issued by it to railroads and for
other purposes is about thirty-three mil
lions of dollars. The semisnnual in
terest on this debit very nearly one
million Of dollars. Most of this interest
is due from railroads, but owing to the
disasters Of the war, which have not
been fully repaired, and owing to the
incomplete condition Of many Of them,
they will fall short Of paying their semi
annual interest from four to Eve hun
dred thousand dollars, and the State has
to make provision for this amount The
last Legislature passed a new revenue
bill, which, when in operation, will fully
meet the deficiencies Of railroads in pay
- .Lo;r infarost Init the revenue from