Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1868-05-28
THE FINANCIAL IMRROGLIN.
Reply Of yudge Watson 60 aIessrs
srf Fletcher et RIs.

tg Afeteher et ais
70 the Editors cF the Uhiou and Dispatch
Owing to my absence from Nashville
the communication Of 90" IN the RspuJli
can Baaher Of The 23d inst, was not seen
until to-day, and take pleasure IN Prompi-
ly replying TO il.
&C." processes 10 he influenced by no 20
liiioal feeling, and If be knows me, n
knoWa we'll that Lhays no political aspirR
tioHs and no party ends 90 promote, but
like HIMSELF have solely at heart The true
inierests OF the State. Al ask il, that
what have 70 sag may not be read through
che medium Of personal or party feeling.
'C" i" asks that business men be consulted
with regard 70 issuing gold-beariDg bonds.
Business men have been consHlte1. Imme-
diafely sfterthe passage ofthe financial bill,
i went to New York partly for this purpose.
/ consulted there with the Presidents and
several of the Directors Of two Of the lead
ing banks Of that city ] eonsnlted with
bankers who an certain have the conf
dence Of every Tennessean who knows
them consulted with gentlemen hold
ing very high positions in The Chamber of
Commerce of New York, and consulted
with some of our large bondholders. In
Tennessee, / have consulted with such
men as ]. Kirkman, President of the
Union Bank, Jos. w. Allen, Its Cashier and
Trustee, d. Weaver, Cashier and Trusie :
of the Planters Bank, and n. HobsOn,
one of our oldest bankers and several others.
/ consulted with such lawyers as T.. ii.
East Judge II. II. Harrison and Others,
and ] also consulted with the leading
financial men Of the Legislature, and there
is no one that have consulted, excepting
some of the members Of our board of
finance, that has not fully and cordially
approved the financial views which have
| recently been made known TO the public.
There never has been a financial measure
40 carefully and thoroughly considered and
so uniformly sustained 10y what G. would
call experts" az the one referred to.
know that some consider it humiliating
for us 10 consult bondholders and bankers
of New York as TO our financial policy.
Mr.. Chase in managing the finances of a
great nation did not think Il humiliating
10 go TO such parties for advice we go to
these parties 10 borrow their money, we
know that il is TO them we must look to
sustain our credit and nothing is more
obvious than the iact that our financial
plans must stand the test Of these parties
who have a controlling influence in the
great monied center Of the world, and
who are safer 10 advise with, than our
bondholders? !? Their interests are identi-
fed with the State, they have deeper
interest in sustaining its credit than ever
the State itself has; for the value Of their
bondsdepends upon this credit and certainly
they would not advise any financial plan
that would impair the credit and thereby
surely depreciate the value of their
property.
&C" has great fears in regard to the is
suance of gold bonds. Now what is the
condition Of the State? There will be a
deficiency Of the railroads in paying their
July interest Of about one-half million OF
dollars, and this sum the State must Dor
row, and it must borrow it by sale of cur
rency or gold bonds. To raise il by a
sale Of six per cent. currency bonds would
require a sale, at present market rates of
our bonds of six hundred and sixty five
thousand dollars, making a clear loss of
| Sl65, 900. | think il much better TO ad-
vance the interest in order to borrow money
/ rather than 10 lose 10 much In the princi-
/ pal, and 80 thought the able financial men
/ Of onr Federal government when they ad-
vanced their interest from five to seven
| thirty per cent, besides it has always been
the policy Of the State TO sell our bonds al
par, and the financial bill forbids us from
selling them under par. In order then 10
borrow money by selling our bonds al par
wemust either advance our currency interest
4 hauh uN nr unaEa he -.
| PAYABLE in gold at a low rate. The obiec.
lion TO making bonds with currency inter
est at high rate, ia that our interest is ir.
revOcably fixed, aud cannot be reduced un,
al our bonds are paid. But if interest il
payable in gold, (slthough the interest il
currency may now he high) il would de
cline AZ gold declines. Il certainly is IN,
opinion of most business men that gold anC
currency will be the same in five years, !
40, the seven per cent. gold interest would
then be seven per cent. in currency interest
"C' thinks that il will dishonor and dis
grace the State TO issue gold bOnds. III
evidently does not belong 10 the Andrew
jackson school Of men. Ii strikes me a
highly creditable 20 the State 10 try an,
get back 20 the gold basis, and that the ei
fort wouid have favorable influence upOI
her abroad
What injuries the credit Of State ia tn
knowledge that her necessities compel he
to borrow money, and also the want of en-
| ergy and financial skill in managing her re
sources. When it Is known that State ha
10 borrow money, the mode of borrowing
has but little,bearing upon the credit Of tn
State.
Was the credit Of the Federal Govern
nent injured by borrowing money upOl
gold bonds Or ia il injured now by pro
posing 10 change all its bonds into GOLD
bonds? IL the credit Of the great Pacifi
railroad injuredby borrowing money upO
its gold bonds Is the credit of Massa
chusetts injured by borrowing money i
this mode That State has always pal
her interest in gold and now she is able I
. | borrow money in London on her goi
bonds at par, with the interest at four pc
cent.
&C." evidently tries TO alarm the publ
! | mind with the fear that there Is some dsI
I | gerous and magnificent scheme in viev
] | whereas the only question is how are "
} | 20 pay half a million Of dollars in Jul
next and how are we 10 provide for oU
two millions Of dollars of maturing bonds
No one has proposed to take any actio
beyond that, and il the Board or any men
, Der Of il intended Il, they have not III
power 10 do so, as will be seen from Ii
following extract from the act creating d
Board: That it shall be the duty Of sal
? Board to provide for the payment of th
3 interest on the State bonds, an
= 10 provide for the payment OF 30 mnc
+ OF the public debt Of the State As may r
q quire payment within three wears from th
= passage Of this Sct"
From the above il appears that II is Ii
duty Of the board % make provision &
the July interest aud the bonds maturiT
the next Ehree years.
The amount of these bonds is about "
) million dollars. The amount TO be rais'
, Cor interest IN July, about half milho
!, Now there are bat two plans proposed f
!, accomplishing these objects, aud the que
! lion ia, which onghl 10 be adopted Z?
I. The plan first proposed hy the prese
!. minority Of the board, wac 20 renew d
1 two millions of dollars Of maturing bon
a. they would fall due, and TO borrow q
five hundred thousand dollars by pied
OF six per cent currency bonds as cola
erI
To borrow this mouey would have J
& ~ 4 "a