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

incurred as VIII mako tho accumulated debt
no large that thero will be an indispositiou to
touch It, that non action will lead To iiual
refusal to pay. / earnestly hope that this will
not be the case but feel it my duty to sug-
gest the danger. 1t would be best for all par
ties TO look the difficulties squarely in the face,
and make full and final settlement by con-
vertiug all the outstanding issues into con-
solidatcd debt, upon which the interest would
be paid without failure. In my opinion tho
creditors would DC willing to accept such an
issue i'll satisfaction Of their claims, provided
too great loss should not be inflicted upon
them; and certainly, in view of the cousttu-
tional obligations, well regards the
honor and good name and tho material
interests of the State tile General Assembly
should meet them half way. 4 =
When such final adjustment shall be made, it
will no doubt be supported by the good mon
of all parties, and will be acquicsccd in By
the people"
PLAN OF ADJUSTMENT.
1t is 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 salety-securitcs which will not only pay
premium upon the money invested, but which
may be disposed of, without loss, Whenever a
change OF investment is desircd-n other
words marketable security
The value of n State security depends
largely upon the confidence OF the purchaser
in the good faith of the State, but more
especially upon tho means which the State
places III the hands or every holder OF her
bonds, to compel tho punctuul payment Of
the interest AZ it accrues, aud the principal ut
maturity. The State is sovereign and cannot
be sued; but when she enters into contract
with an individual, through her agents, and
directs said agents to perform certain duties
III fnltllment of that 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 .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 ms
part of the contract; and every individual
who accepts such Obligations in exchange for
tho moneys he advances, receives ii remedy
of which the obligations themselves are the
eviaaHce-lor every neglect of duty in the
premises on the part OF the agents of the
State. Such an obligation offers tie hes;
investment that could possibly be mHde mas
much the holder thereof has lien upon
the entire property OF the citizens oi the
State
How is it with the bonded debt OF this
State?
Our debt may be divided into three classes
ginaliy issued) OF the five classes enumerat-
ed in the decision of the Supreme Court upon
the Morton, Bliss and Company mandamus
case, amounting 10 Sa,hi9,000.
The second class includes all those bonds
and stocks whose only guarantee for the pay
ment of principal and interest is the good taM
of the State. This class comprises the old
bonds and stocks, Except Blue Ridge bonds.)
the bonds for funding past due interest and
principal and funding bills Bank of the State,
and amounts to S4,5l3,5O
The third class are those for which no pro.
rision has been made for the payment OF
and includes the Blue Ridge bonds, (the alb.
sence of the guarantee in this instance being
probably e.. ovcrsight) and tho conversion
bonds issued directly by sale or hypothccation.
This class aggregates SG,965,O00
This concludes the his ,ory 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, are
quoted ut fifteen cents. The latter, being II
portion OF those recently before the courts are
quoted at twenty-three cents.
Now it is evident from the arguments pre-
viousiy advanced. that the State is unable TO
pay the interest upon tho debt as it stands.
and that it is 10 tho interest OF every bond
reasonable limit, SO that the payment of
interest may be resumed If, when tho hold
ers of our bonds and stocks agree To surrender
them for n new and consolidated bond or
stock, the State agrees as part OF the
contract lor which such bond or stock
itself would DO the evldelce) 10 provide for
the payment of the annually nccruing interest
and for the extinguisliment annually of II por-
tion Of the principal until the whole shall he
thus redeemed; IL, in pursuance of such agree
ment, she instructs her agents (whoever may
represent her fiom the date oil the contract
until the debt is entirely eXtinguished) to levy
end collect annually taxes sufficient TO pay
said interest and retire q portion of the said
principal--if she nstructs her agents as
aforesaid to dsburse the funds so collected to
the purposes aforesaid, and if embezzleInent or
diversion OF said funds be made Al felony, pun
ishablo as tho constitution directs it is evident
that it would be to the best interest of the
bondholder to accept willingly such compro-
mise. For il these remedies he placed in the
hands of every bondholder it is evident that
while his new bond would represent aDOn its
face q SUN equal only TO twotlirds or one-lIalf
the face value of his old bond, the market
value Of the new bond would undoubtedly be
from one-third TO one-half greater than the
present value Of the old.
For instance, it. 5000 of old bonds worth
10 cents on the dollar, or $3.50. be exchanged
for $4,000 in new bonds worth al ieast 40
cents ON tho dollar, or $500, the holder will
have made u clear gain upon the actual value
Of his bond Of $3.50; and again, if So, 900 i'm
old bonds worth 23 cents on Tho dollar nr