Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-03-20

my native State will creep tehind> her
sovereignty" TO avoid the just demands o
her creditors.
But, Mr.. Speaker, call attention now tC
another case in which the State is said to be
liable for interest on coupons. See Arents
VS.. the Commonwealth, 18th Grattan Re.
port, Supreme Colrt OF Appeals, Virginia
The city Of Wheeling issued bonds to the
Baltimore and Ohio railroad and the State
guaranteed the payment OF bonds and
coupons. The coupons sued on by Arents
had been stolen from the Second Auditors
office at Richmond. laV
The Court says: az therefore conclude
that these coupons are negotiable in
struments, payable at a day certain; name
ly, day mentioned in each, as the day
the interest called for by the coupon
is payable, through the holder,
was not bound to present them Oh that day,
SO as to save the liability of the city or of
the State, and this view is sustained by nu-
merous cases, which hold that in an action
upon coupon, the payment of which has
been refused, or for the payment of which
no provision is shown to have been made,
interest may be recovered from the time at
which it became due and payable, accord
ing to its face" Here We have unquestioD-
ably in an action against State, the same
rule declared against it that the superior
courts of Wisconsin, Pennsylvania,the Uni
ted States and Tennessee set up and de-
clare as operatives against corporations.
Where now is the distinction so finely
drawn between corporation and State? 1t
disappears like the morning mist before the
King of Day, in the presence of enlighten-
ed American jurisprudence.
Mr.. Speaker, the gentleman from
Shelby, (Mr. Mulverhill,) in oppos-
ing this bill, spoke warmly of
the danger of consolidation In this fund
ing proposition. / can see nothing like
consolidation in it; but, sir, the principle at
tempted to be set up here in argument by
the anti-funders, If hereafter settled as law,
would build up in Tennessee a more obi
Gus consolidation that ever known before.
They say the State is sovereign, and there
fore not liable as other creditors are admit
ted to be, to pay any interest on other peo-
pies, money that she has in possession and
is using. So lofty, so great, 80 mighty that
she need not stoop to pay debts due and
unpaid, nor any interest on such debts. That
her sovereignty lifts her above ordinary la
bility and authorizes her as matter oflegal
right to keep the property of creditors as
long as she wills SO to do, even in the face
of promise to pay at fixed day. The
bare idea of such a sovereignty is
to me political monstrosity
and would droop our heads in shame before
the governments of the world. Consolidas
tor, indeed! Tennessee with the purse,
the sword, aud all this power, stands afar
offrom her creditors clothed in sovereign
ty it is alleged. The creditor has no DOW
er; he is stripped of remedy; his money
is swallowed up in the State
Treasury; he asks for his debt
he can do no more-and gentlemen
here denounce him for it as a "bloated
bond-holder," co:ruptionist, ETC., etc. Is
this right? Is it just? Is it honest? Sir,
the State that pursues that policy will cover
itself with an inglorious immortality. The
true policy is to give the citizen the benefit
of the doubt, against the State. It is 80 in
criminal jurisprudence, and ought to, and
will be so held in cases like this.
Gentlemen say that by passing this bill
we increase the indebtedness of
the State about 100000. This ar
gument is rested upon the
presumption, already shown to be absurd,
that coupons bear no interest; and is,
therefore, fallacious. Now, sir, this bill
does not propose to pay any back interest
on these coupons, but to fund them at their
face value and to pay interest ON them
semi-annual,y hereafter; by this arrange
ment the bondholder loses the interest
already accrued on his coupons-to which
be is undoubtedly entitled, as we have al
ready shown land the State lessons her
debt to that extent. The interest due
from us on these coupons amounts to about
$5O0,0O0, and this sum this bill saves to
the State, if the creditor funds his coupons
under it; but it is said this cannot be true,
because, ii it was, the bondho,der would
not fund; and we are asked if the State
is to make OF save money by funding,
Why does the bondholder desire
il? We answer, for the same
reason that the English bondholder
changes bis five per cent securities to four
per cent, and finally his four to three aud
half per cent securities, because he is certain |
of prompt payment of interest and he pre-
fers less per cent with a certainty of |
prompt collections than larger per cent |
with doubt as to whether he will collect |
or not. So it was and is with the holders |
of United States bonds, so it is i'll all bust |
ness transactions. The value of the bonds |
Is to be increased as the State credit i'm.
proves, the interest is to be paid when due I
and it follows as a matter of course that the
bondholder is benefited although he may
lose and the State may gain largely in |
putting the finances in this condition,
Mr.. Speaker, the gentleman from Tip
ton (Mr. Cummings) makes a lengthy
speech against this bill and prints it for
general circulation, he comes forward as
the champion Of the opponents of this bill.
In his speech he proposes finance bill
Of bis own in lieu of this. Let US examine
a moment his policy. He proposes that the
Treasurer borrow not more than $4,000
OOO before January, 1875, that be issue
bonds therefor, with interest at per cent,
payable semi-annually, said bonds to run
rom ten to forty years. These bonds are
70 be issued to the most favorable bidder
after notice.
Now, sir, our bonds are worth in the
market, say eighty dollars on the one hun
tred. To raise the S20,000,000 would re-
Iuire S24,OOO,000 of bonds. The interest
IN these bonds for forty years at 5 per cent.
would be $4,000, 900, precisely the same
interest that would accrue on the $20,OOO.-
700 at 6per cent. for forty years. What
hen would be gained by this grand scheme?
Literally nothing. Why not fund as well?
Where is the difference? Refuse to
und-declare an intention to COM
nence payment, and then advertise,
IS he proposes, to raise S2O,OOO,OO0
IN State bonds, and who can say that our
bonds would bring US over sixty cents in
he dollar? Why sir, the gentleman pro-
'oses to hand over at once an extra 81
100000 to the "bloated bondholder," and
'fterward, for forty years, to pay him five
'er cent on it. We propose to pay him
Nothing now, but interest regularly hereaf-
er. Sir, would advise the bOndholder,
he be here, to rally to the support of the
Gentleman from Upton, if he desires to
promote his financial prosperity at the ex-
'ense OF the tax payer. His bill would give
o the bOndholder 81 100000 in advance and
j ,20O,OOO in the shape of interest annually
or forty years and then leave the people in
Iebt $24, OO0. 900. To maintain this pro-
'osed financial reform tax of at least 40
ents on the hundred dollars would be ne
essary to pay interest on the bonder's debt
lone. His bill would require S1,z0O,0O0,
While the bill now pending would only re-
uire $3l7, 200 per anuum for interest, diff !
erence against his proposed policy in dol