The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1873-10-22

years. Tlic State then made compromise
with her bopdholders, in which she ugrecd to
transfer her tito to tho Wabash und Eric
Cannl in liquidation Of ouc.half Of hor debt
and to issue certificates Of stock, bearing five
por cont interest aftcr 1884, for the other half
Tho Legislature solemnly pledged tho faith
| and funds OF tho State for the punc,la pay.
ment OF the interest aud principal; and
| afterwards solemnlv set apart MI the revenues
| of the State derived from taxation for general
Stnto purposes, after the defrayng of tho
ordinnry ordinary. Expenses Of tho government to the
the principal of the debt. This compromise
aud contract was afterwards confirmed by tho
people at the ratification OF tho New Con.
stitution Of 1850"
Even tho old creditors of the State who
wcre not directly interested in lilcso schemes
aud held none Of these questionable bonds
came forward 'ct'Iimyiy to relieve the STATIC of
the foul stain Of reputation, and ns,tlo
sacrifices Of their pccuniary interests which
niado tho compromise possible.
Aud now, hy tho faithful performance of
the terms of tliis compromise, her credit has
been completely restored, and stands upon
perfectly secure basis anu without orprcs-
Sve taxation her debt is being very rapidly
e~tingusl,cd.
The history of tho finances Of tho State of
| 4N"hfUM furnishes another illustration OF u
eo"Proi'iSe "iiccteu between Il State AMI her
creditors. Tho compromise nude bv tho
State vi Indiana was mndo at tho suggestion
oi tic hnn'hodcrs and with their hearty
assent and cooperation; that Of the State OF
Michigan was male without agreement
which tho bondhodcr was obliged to accept
or get nothing Her financial troubles began
in $40. Tho fever Tor issuing bonds to
build railroads and canals ragged mt that time
as an epidclnic throughout the entire West
Like prairie lire or swarm uf the drtutlrd
caterpillar passing over Il cotton plantation u
lhc South, its appearance WAS as sudden, its
march M rapid, its desoalum as complete.
In 1857 and 1878 Michigan issued S5.2O0-
600 TO build c.as and railroads. Tho Gov
erhor madu arrangements with n hnuku,r
company to net as the agents oil The State il,
tho negotiation OF the bonds The coln,uny
negotiated portion Of them and made tho
proper returns to the State; the moneys were
| payable i'll nstullmcnts. The State was cn,i.
tied To receive about S2S5I ,O3976 nn tho
remainder al bonds in hands of the company.
when suddenly it collapsed, aud it was dis
covered that the whole amount of hon,is had
bec'i hypolhcc'tcd or sold. had passed into
the hands OF Innocent parties, and were out
standing as charge against the State The
Governor publicly called upon tho holders of
the bonds either To pay tho balance due uI>ln
Them ny the company nr surrender tl,cln did
have the amount they paid for them refunded.
'fhc Legislature Of 1871 confirmed the action
OF The Governor and again demanded tho sur
render oi tho bonds upnn the terms before
mentioned. 4 portion Of tho cnliro sum OF
$780, 900, amounting To Sl,3s7 900, were
nut Included i'm the demand for the reason
previously given.
Tho bondholders refused to accept the com
promise and no further action WAS taken until
1916 at that time (Marcl,. 1860 the State
sold her railroads aud received ~ ,mrt nay
sono Of these part.lmid bonds, sc:,lluy tlle
principal ut the rate Of &4o3.sS rer $1,000 in
bonds, and the interest ut the rate Of six rer
cent on Sa02.1: for each S., 900 or said bonds.
In 1868, tho Legislature directed tho tren-
surer TO notify the holders OF S;, bonds. by
public advertisement, to surrender ti,cr bonds
within six months, ns after that time no in
ter-st would he pmid. The six months expired
August, 1855. and from that time The bonds
l'nvc bcem adjusted ut tho rate Of S57S57 for
oncll $1,000. There are still outstanding
$4,000 adjustable at $3l ,24278
Under the operation Of wise Legislation.
ample provision having been made for the
payment OF tho interest and cx,ing,lishncnL
| oi the principal, by snlennly setting apurt Al
portion ot the annunl revenue aud tie lcvying
| oi spuclic annual tax Tor that purIns,.-tlu
credit Of tho State has hren completely re-
stored; the resources OF tho State are large
ana annually increasing, while tho debt is
small. taxation light, and no occuSi,m to make
II oppressive. Tho auditor general in his re-
| port Of September, 1871, states that the sink
ing fand was large enough 10 furnish tic
means of rc,ccmilIg IL! the bonds outstanding
| before their maturity. il the holders could ho
| iliuuced To surrender them, niml the Governor
therefore, recommends Tie repeat of the nc,
levying II specific tax for tnai purpose
| The history OF the finances of The Stat, Of
Illinois is worthy Of especial notice IN this
connection, as i'll several respects sho passed
through IL similar experience 10 our own. The
SUCCESS which rewarded that bai,,l Of pa,riots
| VINO combined to restore tie credit of tho
State, and To lift the cloud Of suspicion Of re-
p'.ilaiion which rested heavily upon her,
might well furnish lesson TO the citizens Of
TINS State who have her best interest ut heart
| The financial troubles of Illinois occurred
prior to the adoption of the constitution of
lS43. She had neglected for long tmo to
| pay The interest upon her debt until the prin.
cipaI and its interest accumulatons amounted
To tho enormous SUM ESQ considered at that
tlmc) oi SlS000,000. Party leaders I'M
pcachcd the validity Of tho debt. and RECON-
mcn,lcd that the people refuse to provide for
lis payment while the tax payers relieved
from taxation ior one purpose, vigorously OPP
posed paying any taxes ut I'LL. The distress
| ing condition of the finances is i,ly portray ell
in The report of the auditor Of tho State Of
december, 1870. Said he "To those who
can remember the condition Of the State OF
limos i'll S4', the treasury empty, the Gov
ernor borrowing money upon his own credit
10 pay The postage on tho letters written
on tie business q" ii,c State, her bankruptcy
known and S,lccrcd ut all over the world
even her honesty Of purpose doubted, and
SOME oi her own snrS trying lo bring her to
Tie lmlanly OF reputation; the simple state
ihcnt "i these laclS requires 10 comment To
make them impressive. Who can moi see