The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1873-10-22
repud dtat!ons n name, thai s.,ch delay will lo

( yepud dlat!ons IN name thai guch DELAY will lo
ss,tnolrred az will make the accumulated debt
4 90 large that there will be an indisposition to
touch It; that non action will lead to final
! feflsal to pay. ] earnestly hope that this will
not DO the case, but1 feel It my duty to sug.
} gest the danger It would be best for all par
ties 10 look the difficulties sqnarely in the face,
and make full and tiunl settlement. by con.
vertihg ali tho outstanding issues into con-
solidated debt, upon which the interest would
be paid without fuilure. In my opinion the
creditors would be willing to accept such nm
issue III satisfaction of tieir claims, provided
I too great a loss Should not be inflicted upon
them and Ger ta,nly, in view Of the constitu-
tional obligations, as we'll as regards the
honor and good name and the material
/ tntorosts OF the State. tile General Assembly
ahould meet tlien half way. u
When such ;dual adjustment shall he made, it
Will no doubt DO supported by the good men
OF all parties, and will he acquesccd in by
hspeopio." M
s,,;l ;i';ifi & PLAN OF ADJUSTMENT.
It is6 well established principle of political
economY tliat an indiyidunl having money to
invest will make all Investment in TINT class
of securities" which oHaEs Tie best guarantee
Of safety-securities wlil4h will not only pay
may be disposed Of, without loss, whenever
change Of investment is dcsired--in other
words marketable security
Tho value of IL State security depends
largely upon the confidence Of the purchaser
in the good faith of tho State, but more
especially upon tho means Which the Stats
places III tho hands Of every holder Of her
bonds. to compel tho punctual payment of
tho interest as 1t accries, and tho principal ut
maturity. The Stale is sovereign and caui,ot
Z be- sued; but when she enters into Il contract
with 'nn individual, through her agents, and
directs said agents TO perform certain duties
in fulillnient Of. that contract, such individual
caii compel the agents Of The State to execute
theSwill Of tho Stuto as expressed in such
contract.
3 Thus, In tliree.fourtls Of tie Suites, when
ever tho tinnnclal officers arc authorized to
croate debts by the issue of State obligations
ths'macllncry for tile pnnctual payment of
tho interest; aud principal is provided rs n
part of lthe contract; and every individual
who accepts such obligations in exchange for
Fthe moneys lie advances, receives remedy
of which tile obligations themselves are the
evidence-for every neglect Of duty in tho
premises OH tho part Of the agents Of the
State. Such an obligation offers tho best
S investment that could possibly be made, inas-
mulch as tile holder thereof l,ns II lieu upon
the entire property of the citizens OF the
State,
How is, it with the bonded debt OF this
State 2 R5t ttr
i Our dobt may be divided into three clnsses
The first class includes all those bonds, Tori
ginally issued,) OF the five Glasses e,l,,mcral-
ed In tile decision Of the Supreme Court upon
tho Morton. Bliss and Company n,nndamus
case, amounting to So, 3,549,0O0.
The second class includes all tl,osc bonds
and stocks whose only guarantee for the pny-
ment of principal dnd interest Is the yood faith
rrA 81 Gk-s~ zl.,-
bonds and stocks, Except Blue Ridge bonds J
the bonds for funding past duo interest and
priacipai. aud funding bills Bank Of tic State
and amounts to S4,5l3, ,503.a5
The third class arc tiuse for which ni> p,o
vision las been made for the payment OF
interest or principal Ly guarantee or otlcr,cise
and includes tho Blue Ridgc bonds, (tle nb.
sence Of the guarantee in this instance bung
s probably aq oyersight.) und the conversion
bonds issued directly by sale or hypolhccaLioI,
This class aggregates SO, ,965, 900.
This concludes the his ory Of the character
Of our bonds Let ns now enquire their pres
nt'n,arket value.
Our January and July bonds" old aud
new, which comprise the entire amount cx-
cept 81, 5000 of "Aprils and Octobcrs," are
quoted mt tilteen cents. The latter, being II
portion OF those recently before the courts, nrc
quoted at twctty-tlrce cents
Now il is evident, from the arguments pre-
viOusly advanced. that tho State ~ unable 10
pay tho intercst upon the debt as il stands
and that it is u the interest of every hond-
holdor that tho debt lie reduced in volume 10
reasonable limit, so TINT the payment of
interest may be resumed. If, when the hold
ers Of our bonds aud stocks agree to surrender
them for new and consolidated bond or
stock, tho State agrees as part Of The
contract (of winch such bond or stock
itself would he the ev,de:,cc) to provide for
the payment OF the anl,ally nccr,,ing interest
and for tho oxtinRuisllmenL annually of II pur-
tion of tho principal until tho whole shall be
thus redeemed; il, in pursuance of such agree
memt, al,o instrucls her agents (wloevcr may
represent her from tho dato of tho contract
until the debt is entirely cxtinguished) to levy
and collect annually taxes sufficient to l,y
said Interest nnd retro ii portion of the said
principal-if aho instructs her agents rs
aforesaid to dislurse the funds so collected to
the purposes aforesaid, and if umbezzlcmeu, or
diversion OF said funds be made IL felony, pun.
ishnblo nS the constitution directs it is evident
that it would he to the best interest OF the
bondholder to accept willingly s,,cl, compro-
mise. For if these remedies no placed in the
hands of every bondholder il is evident that
willis his new bond would represent upon is
(ace sum equal only to lwo-tllirds or onc-l,rIf
the 1ncc value of his old bond the market
value Of the new bond wonld undoubtedly be
from one.tird to onchnlf greater tllau the
present value Of tho old.
For instance, il $4,000 of old bonds wortl,
Is cents on the dollar or $3.50, he exchanged
for $4,000 in now bonds worth at imst 40
cents on the dollar, or $500, tho holder will
have made clear gain upon tho actual value
Of his bond OF $3.50; and ngain, ii So, 900 in
old bonds worth % cents on tho dollar or
5000, bu exchanged for So, 900 in new bonds
worth at least 40 cents OH the dolinr OF
$500, the loder will have made II clear g:.ir.