Nashville union and dispatch. [volume] (Nashville, Tenn.) 1866-1868, 1868-05-23
TENNESSEE FINANCES.


ComptrOIIer-The Minority Resign
The Reasons OF Roth sides.
In order to fuller understanding Of
the finances of the State, we below com
dense the recent action of the Board Of
Finance, a body established by the last
Legislature, to devise means to defray
the interest in the State Indebtedness.
1t consists Of the Governor, Secretary of
State, Comptroller, Treasurer and Presi-
dent Of the State Bank aq
The latter, Samuel Watson, Esq, at a
meeting on the 18th inst offered the toll
lowing resolution: .a la
Belt resolved, That it is to the Interest
| Of the State TO purchase Immediately one
| million dollars of its bonds, TO be paid for
by the issuance Of gold-bearing bonds,
at a rate of interest not exceeding seven
per cent, provided the: purchase can be
made at such price as will certainly
reduce the debt of the State
Resolved, In order to relieve the pres
ent pressure upon the treasury TO meet the
wants Of common schools, it is the interest
Of the State TO sell an amount Of gold-bear-
ing bonds sufficient TO pay the balance now
owing the Fourth National Bank Of New
York, and sufficient to pay the amount of
interest maturing in July next, that the
railroads may be unable to pay provided
that such bonds can be negotiated at par, at
a rate Of interest not exceeding that al-
thorized by the act creating the Board of
| Finance.
As a substitute, Secretary Fletcher, at
a meeting on Monday, submitted the
following: l I'D % ...
Ordered by the Board, That the Comp
troller be authorized and required to Dor
row as much money as in his Judgment
may be necessary to pay the July in
terest on the State debt, and the debt owing
TO the Fourth National Bank Of New York
and that to enable him to do 80, he may
contract for the delivery of the bonds of
the State bearing such rate of interest in
| gold or currency as will command par
price.
Comptroller Blackburn offered the fol-
lowing in lieu of both s. Il
Ordered by the Board, That the Presi-
dent of the Board be, and he is hereby, au-
thOrized and directed to call on the Gov
ernOr of the State 10 issue sufficient mum
Der Of seven per cent coupon bonds Of the
State for one thousand dollars each, dated
July lst, 1868, and to fall due Jannary Let,
1900, interest payable semi-annualY in
New York-both principal and interest
payable in gold-to supply the deficit due
on the July interest, 1868, and for no other
purpose, after paying on said interest ac-
count every dollar that is collected from
the railroads, and every dollar that can be
| furnished from the revenue of the State
provided that said bonds can be sold for
currency at par provided further, that the
said President be required TO report TO this.
Board the terms and manner of sale, before
said bonds are delivered. .
They were severally discussed, and the
schemes presented by Messrs. Fletcher
and Blackburn were each rejected by a
tie vote That of the President of the
State Bank, Mr.. Watson, was adopted,
the Governor and Treasurer coneurring'
Eziil his viesgss. FlIerenpen ASessrs Fletcher
and Blaekbsrn filed a protest against this
action, and resigned their seats as mem
bers Of the Board.
MR.. FLETCHER's ARGUMENT
The objections Of the Secretary of.
State and Comptroller to the plan adopted
are set forth in an argument submitted
by the former, of which the following is
the gist and substance: NJ H
The preamble of Mr.. Watson's PROPOSE
ton recites that we have an opportunity
TO borrow money TO buy two millions of
our bonds, and the member who introduces
| il tells us that his arrangements are already
made, the money ready, and that we have.
only to telegraph to our friends in New
York TO close the transaction by agreeing
| TO deliver gold bonds hereafter. The reso-
luton only proposes TO buy one million
/ now, from which infer it is intended 10 |
take the bait at two bites. The gentleman 4
has also produced to the members of the
Board a number of letters from heavy
bondholders in New York, urging the
adoption of the policy of selling gold
bonds, and buying in our six per cent. 4
currency bonds.
The principal object aimed at in all
these letters and arguments is expressly to
enhance our bonds in the market One Of
these gentlemen owns a million of our
bonds, and il is likely, together, they have
the whole two millions 10 sell on the rise
proposed. A copy Of the law under which
we propose 10 do this strange thing, was
sent to these gentlemen while it was pend
ing, and moulded by them to suit their
purposes. Thus we are suffering Wall
street not only TO control our credit, but 10
make our lava Enough has already been
stated to excite suspicion that this is sim
ply a bull movemement, and when we
shall have demonstrated that no possible
benefit is to result 10 the State from IT, we
shall pass from suspicion TO assurance. 1t
il asserted in the preamble, and a calcula-
ton il adroitly made to show that the
State will save three hundred thousand
dollars on each million of our bonds pur-
chased. 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; then we shall
owe 100000 less by the operation. Only
an old woman or a young child can be de-
| ceived by this trick Of the slate. Il is the
interest onsour bonds which most oppress-
us. The interest on the 81 ,000, GOO, in cur
retcy bonaa, AZ SIX per cent, II POO,UUU.
| The interest on the 100000 in gold, at
seven per cent, is $40 900, which, at 81 40,
| (ths average cost Of gold for year past,
amounts to S6S,G00. loss OF Interest to
the State per million, $4,000.
But it is said we are to pay The principal
al the end of FIVE years, at which time we
will save the $4,000 Let US see how
this will be- Each year We will have lost
in interest $4,000, which. in fee years,
will amount to $4,000. We must then
buy the 500, 600 in gold. which will cost
us $3.50, gaining in the principal,
| 100000. Net Toss per million, S23, 00o.
| To this must be added the cost Of execu-
| ting and selling the new bonds, fees Of
| brokers agents, etc, several thousand
more Thus passes away this $500, 900
bubble. Besides Il Is not likely we will
be able TO pay any portion of the principal
| of our State debt in five, or even ten years,
except through the sinking fund. This,
however, viii depend upon the manage
ment Of our railroads. Nearly six-sev-
! enths Of our whole debt was contracted by
| loauing our bonds to these roads, or in-