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


For tho whealing iatelligcneer.1
A good many people nrc puzzled perhaps
ut seeing III tho Baltimore aud Richmond pa
psrs daily quotations for West Yirgiuin bonds,
thi. is bonds IOnring the name "Nest Viz
rinia." They are moi able to understand how
il comes that security Of that name should
be on the market, seeing that the State so
far as known t. 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 OK.
plluution of the apparent anomalyis as fol-
lows:
Several months ago on act wSS passed ut
Richmond known as the Funding Bill. BY
this act the State Of Virginia sgrced 10 take
up oil her old bonds and outstanding interest
thereon and consolidate them into new bonds
which should represent two thirds Of the Prin'
cipal and accrued interest Of the old bonds,
provided her creditors would leave the re-
msiuiug one,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 had lspsed during the war and up to Jan
ulry of that year was taken up and funded
into interest bearing bonds, but on these
bonds the stpte had failed to pay the interest
on the old bonds.
The recently passed Funding Bill is in'
tended to bring up all arrears Of interest to
July lst, 1871, and 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,scvcu millions Of dollars. Two.thirds Of
this sum amount to ;hirty,Ono millions and a
fraction, This amount the State of Virginia
assumes to be her tigbtful proportion Of the
whole debt, and accordingly she has entered
into an independent arrangement to issue her
bonds for this proportion. She is now issu,
ing said bonds aud making them payable
thirty.four years after date, As fast as 40 old
bond comes III she issues one Of these new
ones for two,thirds its principal aud interest,
and for the suspended or deferred one.third
she issues q certificate which states on its face
that payment thereon awaits settlement with
West Virginia.
1t is these deferred certificates that arc
quoted iuths markets as West Virginia bonds
Not that they are issued BY the authority OF
consent Of West Virginia, nor that she is 10 any
way bOutd for their payment or protection,
but simply that they represent Virgiuia's ca
parte assignment TO her Of one.lhird Of hel
debt.
tits unnecessary to discuss whether twa!
good or bad policy on the part ofV irginiatntakt
the step that she has taken, and especially tc
issue these certificates ms representative Of Oui
portion of her debt, since her act in SO doing
effects only herself and her creditors and ii
no way compromises either the rights or th'
proposition Tor settlement made By West Yir
gina. That proposition was aud is 70 settle
up to the first Of January, 1861, and not Il
the FIRST OF July, 1871, or to any other date
Al the first date the debt of Virginia did NO
exceed thirty two millions Of dollars, while u
the second it was not lees than iotty,seyor
millions. Quite an important difference.
1t is possible, and this is the impOrtan
feature Of the transaction, that this new ar
rangeuent Of Virginia with her creditors ma,
postpone indefinitely the day Of se,tIcmrn
with this State. No one need be surprised i
such should be the case. Radically the ar
raugement amounts to about the same thin.
as settlement with West Virginia on basil
oil ore third of the debt for the latter as i
stood up to July last Whstever may be
thought OF the craftsmanship Of such piece
Of business, the ulpoundiug Of the interest
of such huge debt uuder the circumstances,
does not matter now. The deed is done aud
so lar as Virginia is concerned is beyond recall.
The point for our observation is this, that
being now in for two thirds OF the debt on her
own separate responsibility she is mot likely to
mako matters worse for herself by accepting
additional By reason Of settlement with US.
As matters stand she can only be held for two.
thirds OF the debt The payment Of the other
onc.third is wholly contingent Oh settlement
with West Virginia. No settlement no pay.
ment, is the way the adjustment will work.
Why then should she settle ut discOuutirou
this arrangement? All accruing interest on
the deferred third she Of course holds to be at
our expense. And meanwhile pending a
settlement with us, her assets, the property
belonging to the two States, will not grow ouy
worse but on the contrary may become more
valuable. If she can pay the intetest on the
amount assumed aud finally morethsn REIN.
burse herself by the enhanced salRepf these