Spirit of Jefferson. [volume] (Charles Town, Va. [W. Va.]) 1844-1948, 1871-12-19
Tho Virginia Debt and the Portion oft
ASSIGNED By that StatetO West Va.

For the Whrellag iateliiEeheer.l
A good many people ato puzzled perhaps
ut seeing in tho Baltimore aud Richmond pa
pors daily quolutions for Yves, Virginia bonds,
that is bonds bearing the name ''West Nir,
giniS" They are not nblo to understand how
il comes that security Of tint nano should
be on the market, seeing that the Stats so
far as known to them has never incurred any
debt on her own account since her admission
into the Union, and never assumed any ror>
ton of the debt of the old State. The cx,
plauotion of the apparent anomaly is as fol-
lows:
Several months ago On act was passed at
Richmond known as the Funding Bill BY
this act the State of Virginia sgtced to take
up oil her old bonds aud outstanding interest
thereon and consolidate them into new bonds
which should represent two thirds Of the prin'
cipal md accrued interest Of the old bonds,
provided her creditors would leave the re-
mSiniug ono>third of principal aud interest in
allegiance to await her settlement with West
Virginia.
In March, 1866, she had passed a previous
Funding measure by which all the interest
that bad lspscd during the war and mp to Jan.
uary of that year was taken up and funded
into interest bearing bonds, but on these
bonds the State had failed to pay the interest
on the old bonds
Tho recently passed Funding Bill is in>
tended to bring up all arrears Of interest TO
July l-t 1871, aud in addition to fund also
the principal of the debt into new six per
cent bonds each new bond representing two.
thirds of m old bond On the first of July
last the debt Of the State was upwards Of for.
ty.seycu millions Of dollars. Two,thirds Of
this sum amount to thirty.ouO millions and a
fraction. This amount the State Of Virginia
assumes to be her rightful proportion Of the
whole debt, and accordingly she hiss entered
into an independent arrangement to issue her
bonds for this proportion. She is now issu,
ing said bonds and making them payable
thirty.iour years after date. As fast as an old
bond comes in she issues ono Of these new
ones for two,thirdsof Its principal and interest,
and for the suspended or deferred ope.third
she issues certificate which states on its face
that payment thereon awaits settlement with
West Virginia.
1t is these deferred certificates that IRE
quoted inths markets as West Virgins bonds.
Not that they arc issued .by the authority or
consented West Virginia, nor that she is 10 any
way bourd for their payment or protection,
but simply that they represent Virginia's ca
parte assignment TO her of one.third Of her
debt.
1t is unnecessary to discuss whether it va.
good bad policy on the partof VirginiatotakC
the step that she has taken, and especially to
issue these certificates as representative Of oul
portion Of hcr debt, since her aetin SO doing
effects only herself and her creditors aud il
no way compromises either the rights or the
proposition for settlement made By West Viz
ginia, That proposition was aud is to settle
up to the FIRST Of January, 1861, and not tc
the FIRST of July, 1871, or to any other date
Al the first date the debt Of Virginia did moi
exceed thirty two millions Of dollars, while al
the second it was not lees than forty.sever
millions. Quite an important difference.
1t is possible, and this is the important
feature Of the transaction, that this new ar.
raugement Of Virginia with her creditors may
postpone indefinitely the day Of settlement
with this State. NOOuo need be surprised i
such should be the case. Radically the ar.
rangtmeut amounts to about the same thing
as settlement with West Virginia on bnsii
oil oGp third Of the debt for the hitter as il
stood up to July last Whatever may be
thought Of the craftsmanship of such piece
Of business, the cuulpoundiBg Of the interest
of such huge debt under tho circumstances,
does not natter NOW. The deed is done and
so far us Virginia is concerned sbeyond recall.
The point for our observation is this, that
being now III for two thirds Of the debt on her
own separate responsibility she isuut likely to
make matters worse for herself by accepting
additional by reason Of a settlement with us.
AS matters stand she eau only be held for two.
thirds Of the debt The payment Of the other
one-third is wholly contingent on settlement
with West Virginia. No settlement no pay.
ment, is the way the adjustment will work.
Why then should she settle ut discount from
this arrangement? All accruing interest on
the deferred third she Of course holds to he at
our expense. And meanwhile pending a
settlement with us, her assets, the property
belonging to the two States, will not grow any
worse but on the contrary may become more
valuable. If she can pay the iniefest on the
amount assumed aud finally motethan REIN.
burse herself by the enhanced yalpe.pf these
nssots Lhe hns in stronL uarlannn n lInratfv