The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1868-02-18
Honesty the Best EOIIcy-NOtable In.
stances of Reputation and the Con-


The man who said that honesty was
the best policy, for he had tried both,
was wise in his generation, and his
remark was equally applicable to gov
ernments as to individuals. It was a
common thing i'll olden time for mon-
archs to borrow money and to waste it
In wars, foreign and domestic; pledges
OF their estate and Kingdom were very
luvishly made; and when the day Of
payment came they thought nothing OF
repudiating the debt, hanging the prin-
| cipal creditors, and making it treason
TO ask the State for payment. This an
swered very well, until the same King
| or State was again in need of money,
and then the alternative was presented
of full idemnity for the past as well as
security for the future. The money!
lenders of the world were all
brothers. The interest of one was
the interest of all. The King or State
that repudiated had to make good the
repudiated debt, or fall for the want of
money. Weak States that paid their
debts survived the calamities of war,
and survived their powerful neighborS
who adopted repudiAtion.
Thus Philip II. of Spain. nearly three
hundred years ago, found himself sore
| ly pressed by his outstanding debts.
for which he had mortgaScd, one after
the other, all his resources of revenue;
his income was consumed in interests
and discounts paid to his creditors. He,
therefore, by royal decree, abolished
the debt, strongly reprobating the un-
holy practice of lending money on
interest. AS Philip, at that time, was
| monarch OF very large part of Europe,
and his debts were co.extensive with
his dominions, the reputation was a
large one. But it did not last long.
| Within one year the King found thai,
though out Of debt and repudiator, he
had less credit than when his Kingdoms
| were FULLY mortgaged, and he Rcknowl-
edged his obligations. He, therefore,
revoked his decree, and resumed once
more the debt he had repudiated.
The Queen OF Spain very recently,
finding 1t textremely difficult to meet her
| own expenditures aud those of her
court and government, and ut the same
time pay interest upon her debts and
redeem her maturing loans, though it
| would be very convenient to Pendleton-
ize her bonds. She refused to pay any
more according 10 the tenor and de-
mand of her obligations. The"bloated
bondholders," it was argued, piiid no
taxes upon their property, aud the peo-
pie of Spain were drained of their sub
stance to enrich men who bought the
bonds below par, and had never given
| full value therefor. To blot out one
fourth, One-third, or one-half large
debt, and thereby save interest and
principal, is luxury only surpassed
by blotting out the whole of 1t.
| sion for an extraordinary expen-
diture. She wanted few millions
for pressing national emergency.
| Her railways, which are adding so
much to the new growth and
prosperity OF Spain, needed money
to complete aud stock them, and to
bring them up to self.sustuining enter
prises. When the Spanish bonds-na-
tional. corporation and personnl-were
| offered in the home market no one
would take them; when they were Of
fered elsewhere their sa,e was excluded
from the market, and no one would in
vest. Spain had repudiated; therefore
Spain and Spanish securities are no
longer recognized by the financial
world. Nations are not subjected to
legal process; they may arbitrarily
otIer their creditors any sum for their
bonds, and creditors must take that or
none. But, in the absence of legal re-
dress, the world has another. II can
refuse Its money to any repudiatinH
State until the last penny of its pre-
viOus obligation shall have been paid.
Excluded from legitimate markets, the
loans of repudinting States are made
only upon such terms as may be ex-
pected at Il pawnbrOker shop. The
lender demands double security for the
face of the bond upon which he lends
| but a small sum.
The case of the Confederate States''
| is a remarkable one, showing the i'm
mediate effects of reputation. Their
first loans were promptly taken by the
people, and they continued to be taken
until the government changed its poll
cy and declared that all outstanding
obligations of the government should
| be surrendered for redemption in a
new loan at fifty cents on the dollar;
those not accepting this lost all. This
| was an open repudtatton of one-half
the public debt, and, thenceforth, lot
withstanding the unanimiLy of the
| rebel people, the Confederacy never
was able to borrow dollar that was
not secured by pledge of cotton as
collateral.
Tue State of Mississippi once repu-
dated a small portion OF her bonds,
but the loss and disgrace hung over
the State thereafter. All the world
knew that Mississippi had repudiated,
and Mississippi became, thenceforth, Il
Pariah in the estimation ofthe financial
| world. That character will attach to that
State eternally, unless those repudiated
bonds shall be taken up and paid,
with interest upon interest.
| Pennsylvania, and Maryland, and
| Illinois, once found the taxation TO pay
"bloated bOndholders" so oppressive
that they virtually repudiated, by sus-
pending payment of interest on their
debts. But they soon found that repu-
diation was more oppressive than taxa
ton, and that dishonesty was political
death. Illinois tried reputation for a
number of years. Her bonds had been
sold originally at very heavy dis.
count, and demagORues then, as dema-
gogues are doing now, raised the cry
that the State was not morally bound
to pay any more of its debts than it re.
| ceived from its bonds. This Quibbling
ended in reputation. Illinois stopped
payment of interest and principal of its
debt. Illinois became an outCast from
financial markets. Industry stopped
No person would lend dollar to the
State, nor to any enterprise in the State,
The motive power on the only railroad
in the State degenerated to a span Ol
mules, and finally to single mule
The tax had been oppressive, but repu,
diHtiOn WAS ten times worse. No mar
in Illinois could buy goods except fol
cash; any man out West, with a hun.
dred dollars in his pocket, never tar
ried in the State where repudiation had
become the policy. For ten years Illi
nois endured living death, and the
people unanimously prayed to be re
lieVed from the intolerable burden
They demanded to be taxed, and taxed
heavily, TO redeem their State. They
by an almost unanimous vote, placed
in the constitution, beyond The reach O.
) legislative repeal, a clause providing
, for an annual tax which was to be per
petual until the long rcpudiated deb
sent into the highways aud by-ways L
find the creditors. They counted NJ
: the interest which had accumulated
during the reDulialiOn, amounting