The Orangeburg news. [volume] (Orangeburg, S.C.) 1867-1875, 1873-10-21


hditon. but not before tlley had hccp berdonee
{withEa debt ofsSl4 GOO, 900, besides ttlleiu,
tersst whicl, had been accumulating for six \
years.. The State then made coihpromisp
with her ooudhulders, IN which, she agreed 60
transfer her title to the Wabash and Erie
Canal in liquidation of onehalt Of her debt
and TO issue certificates of stock, bearing five
per cent. interest after 1854, for the otherIl9lE
The Legislature solemnlv pledged the tniths
aud funds OF tho State for the punctual pay
ment of the interest aud principals and
afterwards solcnuly set apart all the revenues
of the State derived from taxation for general
State purposes, after the defraying of the
ordinary expenses of the government, 10 the
payment of the interest and liquidation of
the principal OF the debt This compromise
| and contract was afterwards confirmed by the
people at the ratification of the New Con-
stitution of lS50.n
Even the old creditors of the State who
were not directly interested in these schemes
and held none of these questionable bonds
came forward 'vijhagiy To relieve the Stnte of
the foul stain of repudiatiou, and made
sacrifices OF their pecuniary interests which
made the compromise possible
And now, by the faithful performance of
the terms OF this compromise, her credit has
been completely restored, and stands upon
perfectly secure basis and without opprcs-
sive taxation her debt is being very rapidly
ex,inguished.
The history Of tie fiuances OF the State of
Michigan furnishes another illustration Of
compromise effected between State and her
creditors. Tho con promise made by tho
State OF Indiana was made at the suggestion
OF the hondhoders and with their hearty
assent and cooperation; that of the State Of
Michigan was made without agreement,
which the bondholder was obliged 10 accept
or get nothing Her financial troubles began
in 1870 The foyer for issuing bonds to
build railroads aud canals ragged at that time
as AN epidemic throughout the entire West.
Like Il prairie fire or swarm of tho dreaded
caterpillar passing over cotton plantation in
tic South, its appearance was as sudden. its
march us rapid, it's desolatiou MS complete.
In 1897 and 1898 Michigan issued S5,200,-
600 10 build canals and railroads The Gov
ernor made arrangements with banking
company To net as the agents of the State in
the negotiation OF the bonds. The company
negotiated portion of them and made the
proper returns TO the State tho moneys were
payable in installments. The State was enti-
tied 10 receive about S2,S57, ,O39.76 on the
remainder oil bonds in hands of tho company,
when suddenly ii collapsed, aud it was dis
covered that the whole amount of bonds had
been hypothecated or sold had passed into
the hands of innocent parties, and were ont
standing rs a charge against the State The
Governor publicly called upon tho holders of
the bonds either to pay tue balance duo upon
them by The company nr surrender them and
have the amount they paid for them refunded.
| The Legislature of lS4 confirmed the action
| Of the Governor and again demanded the sur
render OF The bonds upon the terms before
mentioned a portion of the entire sum of
$5,200000, amounting 10 Sl,3s7.00O, were
not included in the demand for the reason
| previously given.
The bondholders refused TO accept tile com
promise and no further action was taken until
lS46. At that time (March, 1866 the State
sold her railroads and received as part pay
T%%e q ii arffs Ge dSgsS per- sT @ n
bonds, and the interest at the rate of six per
| cent on S3o2f3 for each 81 900 of said bonds
In 1885, the Legislature directed tie tres.
snrcr 10 notify the holders of said bonds by
| public advertisement, To surrender their bonds
within six months, as after that lime no in
| ter st would be paid. The six months expired
August, 1865, and from that time the bonds
have been adjusted at the rate of S57s. 81 for
oach $1,000. There are still outstanding
$4,000 adjustable at $3l, ,2427s.
| Under the operation of wise legislation,
ample provision having been made for the
| payment OF UIe interest and exlinsuishment
of the principsl, by solemuy setting apart
| portion of the annual reveaue aud tile levying
OF n specific annual tax for that purpose e-tho
| credit ot the State has been completely re-
stored; tho resources OF the State are large
and annually increasing, while the debt is
| small, taxation light, aud no occasion To make
| II oppressive The auditor-gcncral in his re.
| port OF September, 1871 states that The sink
| ing fund was largo enough 10 furnish the
means of redeemng all the bonds outstanding
| before their maturity, if the holders could DO
| induced To surrender them, and tho Governor
therefore, recommends tie repeal of tho act
ievying specific tax for tnat purpose
| The history o: the finances OF the State OF
! Illinois is worthy Of especial notice in this
| connection, as in several respects she passed
through similar experience 10 our own The
| success which rewarded that band of patriots
who combined to restore the credit of the
| State and TO lift the cloud of suspicion Of ro-
! pnda;on which rested heavily upon her.
might well furnish lesson 10 the citizens OF
this State who have her best interest at heart
| The financial troubles Of Illinois occurred
prior to the adoption OF tho constitution of
| lS4s. She had neglected for long time to
! pay tho interest upon her debt until the prin-
cipal and it's interest accumulations amounted
to the enormous Fam (so considered at that
time,l of SlS,000,000. Party leaders i'm
peached the validity Of tho debt, and recon-
| monded that tile people refuse To provide for
It's payment while the tax payers relieved
from taxation for one purpose, vigorously OPP
posed paying any taxes at all. The distress
ing condition OF the finances is fuy portrayed
In the report OF the auditor OF tlg .S.ate OF
December, 1870 Said he: 'To those who
can remember the condition Of the State of
Illinois IN lS4T, the treasury empty, the Gov.
hfnR R.NN0F Fan.... n