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


incurred az VIII mako tho accumulated debt
30 large that there will be an indispositiuu to
touch Il, that non action will lead to tiual'
refusal to pay. / earnestly hope that this will
not be the case, but feel it my duty TO stlgs
gest the danger. 1t would be best for all par
ties 10 look the difficulties squarely in the face,
and make full and tiual settlement, by con-
Vertiug all tho outstanding issues into a con,
solidated debt, upon which the interest would
be paid without failure. In my opinion the
creditors would bc willing to accept such an
issue in satisfaction OF their claims provided
too great loss should not be inflicted upon
them; and certainly, in view of the cousttu-
tional obligations, as well as regards the
honor and good nalne and tho material
interests of the State, the General Assembly
should meet them half way. II {" *
When such final adjustment shall be made, il
will no doubt be supported by the good mon
Of all parties, and will be acquiesced in by
the people,
PLAN OF ADJUSTMENT.
It is a well established principle OF political
economy that an individual having money to
invest will make an Investment in that class
of securities" which offers the best guarantee
of safety-securities which will not only pay
premium upon the money invested, but which
may be disposed OF, without loss whenever
change OF investment is desircd--in other
words marketable security.
The value of State security depends
largely upon the confidence of the purchaser
in the good faith of the State but more
especially upou the means which the State
places III the hands of every holder of her
bonds, to compel the punctual payment of
the interest as it accrues, and the principal ut
maturity. The State is sovereign and cannot
be sued; but when she enters into a contract
with an individual, through her agents, and
directs said agents to perform certain duties
in ftlHllment of TINT contract, such individual
can compel the agents of the State TO execute
the will of the State as expressed in such
contract.
Thus, in three. e.fourths of the States, when
ever tho financial officers arc authorized to
create debts by the issue of State obligations,
the machinery for the punctual payment OF
the interest and principal is provided as
part OF the contract; and every individual
who accepts such obligations in exchange for
the moneys hc advances, receives n remedy
of which the obligations themselves are the
evidcnce-lor every neglect of duty in the
premises on the part of the agents of tile
State. Such an obligation offers tile best
investment that could possibly be made, inas-
much as the holder thereof has lien upon
the entire property of the citizens OF the
State.
How is it with the bonded debt OF this
State
The first class includes all those bonds, lori
ginaiy issued,) OF the five classes enumerat-
ed in this decision Of the Supreme Court upon
the Morton, Bliss and Company mandamus
case amounting to S3,549,OOo.
The second class includes all those bonds
and stocks whose only guarantee for the pay
ment of principal and interest is the good faith
of the State. This class comprises the old
bonds and stocks Except Blue Ridge bonds.)
the bonds for funding past due interest and
Z PRINCIPAL, and funding bills Bank of the State
and amounts to $4,5I3,5OS.35.
The third class are those for which M pro-
Uision has been made for the payment of
and includes the Blue Ridge bonds, uhe ab.
sence of tile guarantee in this instance being
probably an oversght,) and tho conversion
bonds issued directly by sale or hypothecalion
This class aggregates $6,965, 900.
This concludes the history of the character
OF our bonds. Let us now enquire their pres
ent market value.
Our january and July bonds" old and
new, which comprise the entire amount eX-
cept 50, $4,000 of "Aprils and Octobers," +" arc
quoted ut fifteen cents. The latter, being Il
portion OF those recently before the courts are
quoted at twenty cents.
Now tits evident, from the arguments pre-
viously advanced. that the State is unable TO
pay the interest upon tho debt as it stands
ana tnat ~ ~ 10 the interest ot every bond
holder that the debt be reduced in volume TO
reasonable limit, SO that tho payment of
interest may be resumed. IT, when the hold
era of our bonds and stocksagr To surrender
Them for a new and consolidated bond or
stock, the State agrees as "A part of the
contract (of which such bond or stock
itself would be the eyldelce) to provide for
the payment of the annually accriling interest
and for the extingusliment annually of n por-
tion of tile principal until the whole shall be
thus redeemed il, in pursuance OF such agree
ment, abe instructs her agents (whoever may
represent her. fiom tho date OF tie CONTRACT
until the debt il entirely eXtinguished) to levy
and collect annually taxes sufficient 10 nay
said interest and retire portion of the said
principal--if size instructs her agents as
aforesaid to disburse the funds so collected to
the purposes aforesaid, and if embezzlement or
diversions OF said funds be made felony pun
ishablo as the constitution directs, it is evident
that ii would be 20 the best interest Of tile
bondholder to accept willingly such II compro-
mise. For IL these remedies be placed in the
hands of every bondholder il is evident ,hat
while his new bond would represent upon lis
face sum equal only TO two-tliirds or one.haIf
the face value Of his old bond the market
value OF tho new bond would undoubtedly be
from one-thrd to one-half greater than the
present value of the old.
For instance, it. So, 900 Of old bonds worth
l5 cents on the dollar, or $3.50, be exchanged
for $4,000 in new bonds wo!ti al lsast 40
cents on tho dollar, or $500, the holder will
have made "a clear gain upon the actual value
OF bis bond of $3.50; and agaiD, il So, 900 in
old bonds worth % conts lon the tollnP or