The Daily state journal. [volume] (Alexandria, Va.) 1868-1874, 1873-02-17
EXECUTIVE CHAMBERS, I
RICHMOND, February IL. 1873. [


RICHMOND, February II, 1873.
Geatlemen Of the Senate and House of Delegates /:
The unsettled condition of our own state
finances and the want of certain statistical
information deferred me from laying before
you, in my last annual message, some sug-
gestions upon subject of the highest
Importance to the whole country, and espe-
cially to the people of Virginia. And while
the causes for that delay have not been en-
tirely removed, yet the magnitude of the
questions involved and the growing necessi-
ty for their early solution render a longer
postponement of their consideration both
unwise and impoltic.
The present condition of the country and
of public sentiment .justifies the opinion,
that the opportune moment has arrived
when the real merits of the subject to which
| refer may be candidly and impartialy
discussed and wise and patriotic conclu.
sions reached.
This subject embodies two propositions,
distinct in character, but harmonious in the
results sought to be obtained. They are,
first, the assumption and payment by the
United States government of all the present
legal Indebtedness of the several states |;
and, second, to prevent the recurrence of q
necessity for similar action hereafter, the
solemn agreement by and between the states
to abstain from contracting any debts in
the future except such as may be found
necessary to the legitimate and effective
execution of their governmental functions,
or, as may be required by sudden and
great emergencies.
The former of these propositions must
be accomplished by an act of Congress,
while the latter can be achieved only
through an amendment to the Federal Com
stitution, which will require the concur
renee of three-fourths of all these states. I
am aware that grave objections may be
urged to both of these propositions, but the
immense advantages which would accrue
from their adoption appear to me to far out
weigh them in Importance. They may be
opposed because of the great inequality in
the amount of the debts of the sew
eral states and the consequent unequal
distribution of benefits and burthens
which might flow from their adop-
ton. But this difference is more
apparent than real, especially if the pres
ent market value of state securities be
taken as the basis of computation. And
further, while some of the states owe large
debts and others comparatively little or
nothing, yet, when the amount which each
state contributes to the Federal revenues
and the great impetus which relief from q
large proportion of state taxation would give
to commerce, manufactures and produc-
ton of all kinds, and everywhere through
out the country, are taken into considera-
ton, it will be found that this objection
dwindles to little importance. And these
considerations, to some extent, apply to
another and more potent objection
which may be raised, viz: the in
crease of the national debt which
the assumption of the state debt would
| cause and the deleterious effect upon our
national credit which might be thereby
produced.
Let us examine this objection carefully,
and ascertain if it has any substantial
| foundation. The debts Of the several states
reckoned at par at the beginning of the
present year, and the amount of the sink
ing fund or assets available for the reduc.
ton of the principal, as ascertained from
their executives or chief financial officers,
were as follows:
| Here follows detailed statement Of
the debts of the several states.l
| Iioh olotOliChe appears IIlal
the total Indebtedness of all the states,
after deducting the assets which should
be applied to their liquidation, amounts
to the sum of $292 ,l95, $50 40. And
this sum would be further reduced by
several millions if that portion of the
debt of North Carolina, and some othe
states, claimed to have been fraudulently
contracted. be thrown out of the calcula.
ton. But to be entirely safe, take as a
round sum s30o,0O0,OO0 Counting all
bonds, fraudulent as well as the unques-
toned, at par, for I propose to answer
this objection even in its most question.
able form.) as the total of state indebt.
edness, and we have the utmost
possible increase of the national debt
which the assumption of the state
debt by the general government would
cause. This sum, at five per centum inter.
est, the rate at which the government is
now funding its public debt, would an.
nually require 100000 to meet the
accruing interest thereon, and to this extent
and no more, would the burthens of the
federal treasury be increased.
But could this comparatively small sun
cause any embarrassment or necessitats
any increase of Federal taxation. or effec