Whig and tribune. [volume] (Jackson, Tenn.) 1870-1877, 1873-04-05
THE PROTEST. AGAINST THE
FUNDING BILL.

- nv - 4eAAN8A
FUNDING BILL.
why Eight senators Opposed the
Bill Which the Ring has Fast
ened on the People.
r lrty Years Interest EiIheut He
duoIng the Public Debt.
The following protest was read in
the Tennessee Senate Monday:
Mr.. Smithson, on behalf OF him
self and Messrs. Morgan, Melton,
Warren, Snipes, Hamilton, Lacey
and MeKenna presented the follow
ing protest, which was read by the
clerk:
Protest against the passage OF Senate bill
No. 2l1, entitled 'tAn act to fund the past
due bonds and coupons Of the State and
sustain the credit thereof"
The undersigned Senators, in ex-
ercise OF their constitutional right,
present this, their protest, against
the passage of Senate bill No. 211,
entitled "An act to fund the past
due bonds and coupons of the State
and sustain the credit thereof
Said bill in substance provides
that all past due bonds and coupons
of the State shall be funded in State
bonds bearing interest at six per
cent per annum.
The past due bonds aud coupons
amount to $5, ,2S6, ,654. This sum
does not now bear interest, there
being no interest upon interest,"
Nor Rnuln II hnaV. in
less the State expressly agrees to pay
it. Said bill proposes to put said
sum of $5, ,266, ,654 at interest. The
annual interest thereon viii be about
$317, 100. The bill proposes to pay
this sum annually for forty years.
At the rate of $317, 200 90 for for
ty years the people will pay above
SIS, ,216, 900 90 interest and still owe
the SIS, ,286, ,654 90 now proposed to
be funded. The interest that viii
be paid on interest, under this bill,
/ in forty years, will nearly pay the
bonded debt of the State.
| Under this bill the taxes will be
so high that the people cannot bear
any additional tax for asinking fund
and the tax of $1,242, 900 annually to
pay merely the interest on the'State
debt, becomes perpetual in addition
to the tax necessary to pay the cur
rent expenses of the State govern
ment.
| On the contrary is an annual sink
ing fund of $S17, 200 were raised and
applied to the payment of the past
/ due bonds and coupons, the whole
past due debt would be paid in lit
/ tie over sixteen years, and after the
/ payment of the past due debt, could
| be applied to the reduction of the
1 principal of the remaining debt.
This is what the undersigned de-
sired to do. They favored and
would have voted for the passage of
the Senate bill introduced by Sena-
tor Smithson in lieu of said Senate
bill No. 211 on the 4th of March,
1873, entitled "An act to provide a
sinking fund and pay the past due
bonds and coupons" But it was
the intention of all the undersigned
to amend said bill in lieu so as to
provide an annual sinking fund of
$S17 200, instead of $500, 600 In ad-
dition 10 the passage of bill pro-
viding for sinking fund the un-
dersigned would have provided for
the payment of future interest on
the outstanding debt which could
have been done with precisely the
same money required under said
bill No. 211, for the sinking fund we
desired was just the annual interest
on the past due debt funded by said
bill No. 211.
In the opinion of the undersigned,
funding. will not permanently and
ultimately improve the State credit,
but will require heavy taxes to pay
the interest on the public debt, with
out reducing it in the least, and
probably ruin the State credit in
the end.
They do not think it just to take
from the people thirteen millions of
interest upon interest, and at the
maturity of the bonds leave them
with S., ,2S6, ,654 of interest still hang
ing over them.
Instead of funding the past due
debt, the undersigned propose to
let it stand, and to provide an annu-
al sinking fund of at least $317 200
with which to pay it of. BY this
means the whole past due debt
could be paid of in few years, in
stead of paying $517, 200 annually
for forty years and leaving it still
hanging over the people at the ma
turity Of the bonds.
If q sinking fEnd of $317 200 had
been adopted, the tax necessary to
raise it would have been precisely
the same as that necessary to pay
the annual interest on the debt pro-
posed to be funded. Under the
funding bill, the annual interest on
the past due debt viii be $317, 200,
and the interest on the outstanding
debt will be about 1925, 200. If an
annual sinking fund of $317, 200
were applied to the payment of the
past due debt until it is paid of,
and then to the principal of the
outstanding debt, and the further
: sum of $925,O00 (now necessary to
pay the future interest on the out
standing debit were also raised and
applied to such interest, so far as
necessary, and the surplus there
J of remaining after paying the
interest on the outstanding debt
were also applied to the redue-
: tion of the principal, the en-
tire State debt would be paid of at
par in thirty-nine years with pre-
cisely the same money necessary to
pay the interest under the funding
I >
200 would, after payment of the
past due debt constantly reduce the
7 amount on which interest would
! have to be paid, thus permitting a
t part of the $925, 900 (nOw necessary
; to pay interst) TO be applied to the
; reduction of the principal as sink
! ing fund. That is TO say, if the
: same sum of money, which is neces-
] sary to pay merely the interest on
I the State debt under the funding
5 bill were raised ann Hally, and SS17, ;,
{ 600 applied to the sast due debt un.
, til it is hquidated, and then to ths
reduction of the principal of the
outstanding debt; and the surplus
I of the 1926, 600 remaining after the
e payment of the interest due on the
r outstanding debt as reduced by the
: sinking fund of S5I7 200 were alsC
4 applied as a sinking fund; the en-
: tire State debt could be paid off a
S par in thirty-nine years, with pre-
q cisely the same sum That will bl
e paid in interest under the fundin,
: bill. We have demonstrated thii
d by actual calculation. 1t is clea
o that under the funding bill the peo
}; pie will, in thirty-nine years pa
4 enough money in interest to pay OF
! the whole debt, principal and inter
i est, if properly applied, and tina
: they will still owe above twenty
!" one millions at the end of fort,
1t would therefore be far bette