The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-08-04
Tennessee FINANCES.

Tennessee Finances.
The rapid decline in Tennessee bonds from
about seventy-seven few weeks ago to nearly
sixty last week has caused more than usual
attention to be directed to the financial and
general condition Of the State. Its failure to
pay the semi annual interest due on the LIST of
July was the immediate cause of the break,
and since then the developments in the Legis-
lature and elsewhere have still further i'm
offered and referred providing for the funding
of the matured principal and interest of the
debt and all that may mature during the next
three years into six per cent bonds, to run
thirty years, the principal and interest payable
in Nashville. This, of course, if acted upon,
would be declaratory that the State will sus-
pend all payments on account Of its debt for
three years to come. Subsequently bill was
introduced in the House providing for the
funding of the interest and maturing prin-
cipal of the debt for five years, thus suspend
ing interest payments for two years longer
than the Senate bill proposed; and this was
referred to committee. Governor Brownlow
in his message gives an alarming descrip-
ton of. the social and political condition of
the State, and recommends the calling out
Of the militia and the summary infection
of the death penalty upon all members
of the Ku Klux Klan. "True," he says,
cit will take money to furnish military force,
but loyal men are entitled to protection without
any regard to what it may cost in dollars and
cents" From all this it will be seen that the
bondholders have a discouraging prospect be-
fore them, and it is not at all surprising that
Tennessee bonds have declined neither would
it be if they were to sink still lower, for Ten
nessee financial affairs present just now an
aspect calculated to arouse grave distrust
The situation of matters at Nashville reflects
discredit upon the financial officers of the State,
and also to some extent upon the Legislature.
At the close of the war the total State debt
including arrears of interest, was about nine
teen millions of dollars, about fifteen millions
of which were secured by liens on main lines of
railway penetrating all the important points of
the State; but under the legislation since this
time the amount has been increased to about
thirty five millions. We look in vain for any
fair equivalent for this large increase Of in
debtedness. There have been no main lines
of railway built and not more than
hundred miles of new road have been con-
structed since the close of the war all over the
State. TIL common school fund has been
misapplied and squandered, and the remnant Of
the banking capital of the State Bank has been
also entirely absorbed to pay the ordinary
expenses of the local government Antecedent
to the rebellion, under the various acts of the
Legislature, known as the Internal Improve
ment law, appropriations were made n aid of
all the railways in the State of from ten to
thirteen thousand dollars per mile, secured to
the State by liens; but since the war the
legislation in aid Of railways has been of
very loose character, money having been
granted to reckless extent to number of
short and Improbable lines. As a case in
point we may mention that S., SIG, 800 have been
given in aid of the construction and recon-
struction of five roads whose aggregate length
is only one hundred and thirty-five miles
namely, from fourteen to thirty-six miles EACH
Then, again, bonds have been given to roads
already under mortgage for about their real
value, and by the sale of the former these
small companies, earning little more than their
running expenses, were enabled to pay their
interest Bonds have also been sold by the
State to pay interest and militia expenditures,
which last have been heavy. This mismanage-
ment Of the finances has materially impaired
the credit of the State and created widespread
dissatisfaction among the bondholders, and the
rebel element, chatting under Acknowledgement
boldly threaten reputation of q debt which
they allege has been forced upon them without
representation. So stand the financial affairs
of Tennessee, while its social condition is
nearly as bad as its finances. The Governor
does not feel secure in the fall election without
the protection of the militia, and, therefore,
calls upon the Legislature to supply the
sinews Of war, while the conservative element
is at fever heat, declaring that If there is any
attempt to cocrce by force it will be met by