The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1872-02-08
The Virginia Debt---Wess virsinia's
Liability to Virginia nnd her AiaGi'i.
fv To tho Creditors.

The VErSiniQ Debit Csc ssrS1HliaS
Liability to Virginia and her LiaEili.
ty to the Creditors.
The Wellsburg Herald Is not pleased with
the report of the West Virginia debt COM
missioners. It intimates that if the State
should insist on such settlement as the COM
missioners advise it would be about equiya-
lent to reputation. The Herald, however,
does not discuss the reasons assigned by the
commissioners for their conclusions. If the
Herald would suggest a basis of settlement
whereby the proper liability of this State to
Virginin might be ascertained it would no
doubt do much to promote an adjustment be-
tween the two States and save the credit OF
this.
There seems to be slight confusion touch
ing this question, which does not distinguish
between West Viginia's liability to Virginia
and her liability to the creditors. These seem
to us to rest distinctly on different bases.
Virginia arbitrarily assumes that we are
bound to her for third of the debt because
we have (about) a third Of the taxable pro-
perty Of the original State which made the
debt, which property the creditors have a
right to look to rs their security. So far rs
the creditors are concerned, it seems to us
true that West Virginia is liable to share Of
the debt proportionate to the share OF taxa
BILE assets which she withdrew from the old
State. And we presume either State, in case
the other failed to pay its share in part or
whole. would bc liable to the creditors for
that deficiency.
The question we have to deal with just
now is not our liability to the creditors, but
how the burden of that liability shall be adj
illsted between the two States. That, we
take it, is to be a question of simple equity,
and each is to account to the other for the
share of the joint property that fell to it
upon the dissolution Of the partnership and
to abide by other equitable features of the
Joint business. When the two partners have
agreed between themselves how much OF the
obligation to the creditors each will pay, the
right of the creditors to hold both States Is
still unimmired. II one State should prove
unable to pay the share that Its oDhSa-
tons to the other State require it to pay,
the other State, and not the creditors,
must be the sufferer by that bankruptcy.
Let us say, by way of Illustration, that
our partner, upon settlement, owes us rs
much as half the whole debt OF the firm,
and discharges the debt to us by undertaking
to pay the whole joint obligation. But un-
til he docs pay, the creditors may hold both
responsible, unless they release lis anu ac-
ccpt our partners individual liability. That
is precisely what the creditors have been do
ing under the Virginia funding act. They
have given up some thirty millions of their
claims against the old firm, and taken Viz
gnia's individual notes for it. This in no.
wise affects the equitable settlement that
must be made between this State and Virgil
mia, but it releases West Virginia from all
liability to the creditors for so much Of the
debt as is funded by Virginia. So fur
as that is concerned, if Virginia fails
to pay, the creditors can never come
on us. The indications are that two-thirds
of the debt will thus be funded; so that if
Virginia should fail altogether tic creditors
could never claim more than third from
West Virginia. The latest proposition at
Richmond is to repudate that third fatty,
and only pay over such part Of it IS West
Virginia may pay Virginia upon settlement
In that event it seems to us West Virginia
would be bound to see that the creditors did
not suffer by the dishonesty Of our partner,
and would be liable to them for whatever
Virginia repudiated, that being the cost Of
our unfortunate connection with State
capable of repudintinS its just Obligations
WheeIino IuteLtcenceT