The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1872-02-01
9itl,mond G|ispattl1,
fr1rr-pg,Ay FEBRUARY !, 1877
The Funding ACT.

wa have read an argument written u
,-oyo TIM, the funding act of 1870 is uncon'
s,jtrtional. The only point In it which We
shau notice now is the one made upon I'll"
following provision of the State Constitution,
which the writer quotes:
9TH. unt0nded debt shall not Do fIndeo
or redeemed OF value exceeding that e'Iao'
lshcd by law at tho time said debt WIS COZ
.ractcl."
TIC writer or,its the conclusion CT the sec
ten. which Is as follows:
rSor shall any discrimination hereafter ~
: made in paying the interest on et'tc ron. ~
which shall give higher act'iai 'a.e .r
bonds held in foreign countries owe, '''
same c,,ss Of bonds held i'll this country
The first prohibition refers to those per
SOUS who did not fund under iiic ac' oi LOW
r,o Convention that framed the Constitution
li1 ;,s work In 1868. Tie Legislature has Il
,,.,.c,,, RIGHT TO read the section rs follows:
"yhc landed debt may be refunded or re-
dec,1cd Mt q value exceeding that establishe,,
TX law at the time said debt was contracted.
Even if it could be made to appear that
The prohibition quoted by our author affects
:nY part Of the public debt, it could on'!
t3ucA that part OF it which was not funded
under tn. act of 1865. OF course we do not
admit that any Of the debt has been iandcu
or redeemed at value greater than thai
established BY law when it was created.
So here we have the Convention expressly
acknowledging the validity Of the funding
1T e 1906, which compounded the lnteres!
,,.,,p The State Debt UP to that time. 1hc
sqna Convention proceeded to provide tAat
,,,o da,, Of the State-inc!uding, of course,
HAT part Of it alluded to in the section above
cu,tli-should be paid, and that the Legs
1,+rrc should create sinking fund, which,
shonld he continued until it was so paid. The
,,co,,,e themselves ratified at the ballot-boX
the Constitution containing these provisions.
The people, then, as well as the courts snd
the Convention, have passed upon tho ques-
ton. 1t is the Constitution itself that re-
ourcs that the debt shall be paid.
The fact that the Convention did not for
lid the compromising OF interest upon the
nrr,lYdcd debt, when the members Ene"
tirt it had Lecn compounded upon the
funded debt is proof, almost conclusive, that
,,at body did not into the Constitution pu;
any provision which, properly construed,
prohibits the compromising of interest when
tic State is unable to pay its coupons at ma
1ui'ity.
As to what this language may mean
namely, that "the uniundcd debt shall no!
hc funded or redeemed at value exceeding
that established by law at the time said debt
was contracted I've confess TINT we arc Ill
doubt. We presume that the Convention
meant that the rate Of interest should not b
Increased. The section first provides that
thc rate Of interest shall not be increased, and
then that interest shall not be paid in Ell
rorc. Either would have increased the valuc
OF the uufundcd bonds. Ii it does not meal
this, it conveys no meaning to US. But thls
Is ;iu,natcrial. Let it mean what 1t may, Il
a!rord5 no good ground for those to stapo
upoa who would repudiatc the just debts q
,hn Sinte