The daily phoenix. [volume] (Columbia, S.C.) 1865-1878, 1873-10-22


In slaae ,the people realized tlleir truc con.
dilion, but not before thcy lad boon burdollc,l
Will, doliC Of $l4,000,000, be*ideR, tho In.
tcrsst which Ind been ncCumuatiug Io, siX
years. Tile State then made cpmprotiise
with ller bopdholders, in which SLID ugreed to
transfer her titlo to tho Wabash sand Eric
Canal in liquidation of oue.hnlf Of her debt
and to issue certificates Of stock, bearing five
pcr cont. interest after 854, for the other half
Tho Legislature solemnly pledged tho faith
and funds of the State for tile punctuul pay.
mcnt OF tile interest and principal; aud
afterYsrds solemnly set npnrt NIL tho revenues
Of tile State derived from taxation for general
State pnrposos after tho defrlying of tho
ordinary Expenses OF the government to the
| paymentp pf tho interest and liouidatiop OF
the principal of the debt This compromise
and contract was afterwards confirmed by tho
people at the ratification oil tho s.Ncw Con-
sttnton Of 1850" gW
Even tho old creditors Of the Stutu who
| were not directly interested in these schemes
| and held mono of these questionable bonds
camo forward ,ctliayiy to relieve tho STATIC of
the foul stain OF repudinliou, and made
sacritlces OF their pecuniary interests which
| made tho compromise possible.
And now, by tho faithful performance of
tho terms of tlis compromise, her credit has
been completely restored, and stands npon
perfectly secure bnsis; and without opprcs-
s'vo taxation her debt is being very rapidly
extnguishcd.
The history Of tho fluances Of tho Stale Of
Michigan furnishes another illustration of II
compron'ise effected between State and her
creditors. Tho compromise nude by tho
State of Indiana WINS made Mt tho suggestion
ot the honEoldcrs and with their hearty
assent nnd cooperation; that of the State of
Mchignn wns made without agreement,
which the bondhodcr was obliged to accept
or get nothing Her financial troubles began
ia is4o. Tho fever for issuing bonds to
build railroads aud canals rugged mt that time
as All epidemic throughout the entire West
Like prairie lire or Il swarm uf the dreaded
caterpillar passing over Il cotton plantation in
mo Ooiitj, lta appearance was 0s s,ltltiuii lis
mnrcli ns rapid, ls dcsoalion as complete
In 1887 aud 1873 Michigan issued ST, 400.
QUO TO build cnnnls and railroads. Tho Gov.
crnof made arrangements with u bnhkiny
company to uct as the ngcnts OF the Stute in
the negotiation OF the bonds. Tho cotnrany
negotiated portion OF them aud made tho
proper returns to tile State; tho nnncys weru
payable i'll installmonts. The Stnto was cnti-
tied to receive about $2.s57 ,O397G on tho
reniniiluor ol bonds IN hmuds of the con,pany.
when suddenly it collapsed, and it was dis.
covered that the Whole amount of bonds hnd
been iiypothccutcd or sold had passed into
tile llai'ds OF innocent parties, and wcro out
stand'nga charge against tho Stnte. The
Governor publicly called upon tho holders of
the bonds either to pay tho balance duo ui1n
tnem ny tic company nr surrender lhcintif5i
lave the amount they paid for them refunded.
Inc Legislature of l84l confirmed the action
OF the UoverLor and again demanded tho sur
render OF tho bonds upnn the terms before
mentioned. a portion OF tho enliro sum of
&c. 100000, amounting to $l,3S7.00O, were
not included in. the demand for tile reason
previously given.
The bondholders refused to accept the COM
promise and no further action w,,s tnkcn until
1916. at TINT time March. 1860 the Stnte
SOLD her rnilroads and received NJ part nav
sonio OF these part.mid bonds, scniing 4tbe
principal Mt tho rite Of S+O3.ss por $l 900 in
oohus and the interest ut the rate OF six per
cent on :S:s02.13 for enclI ST. 900 of said bonds
In ls05s the Legislature directed tho trea-
surer TO notify tho lInlders OF said bonds by
pubic advertisement, to surrender their bonds
within six months, as after tfnt time no in
-st would he paid. Tie six months cxpircd
August, 1858. and from That time tho bonds
have btcn adjusted ut tho rate Of S57S.57 for
ouch $1,000. There are still outstanding
1000, adjustable at $3l ,24278
Under the operation Of wise Legislation,
ample provision having been made for tho
pnyihett of i'iu Interest and exting,lishlncnt
OF the principal, by solenmly setting apurt Al
portion ot tho annunl rcvenue md the lcyyinp
ot specific annual tax for that purpose the
credit OF tho Stnte has been completely re-
stored; the resources of tho State IRE lnrgc
and annually increasing willis tho debt is
small, taxation light, and no OCCASION to make
it oppressive Tho auditor-gemcra in his re-.
port OF September, 1871, states that tho sink
ing ltlnd was large enough TO furnish tho
means of retleemimg all the hnnus outstanding
before their maturity. it the holders could ho
Induced to surrender them, and The Governor,
therefore, recommends tie repeal OF the acl
levying specific Ink for tnat purpose.
Ihe history of tho finances Of the STATE of
ILLINOIS is worthy Of especial notice in this
connection, AS in several respects she passed
| through similar experience TO our own. The
success which rewarded tul bun,l Of patriots
VINO combined to restore the credit OF the
Stntt' anu to lift the cloud Of suspicion of re.
puulaiion which rested heavily upon her,
| might well furnish lesson TO the citizens of
this State who have her best interest Mt heart.
The financial troubles of Illinois occurred
prior to the adoption of the constitution of
lS+S. She had neglected for long tno to
pay the interest upon her debt until tho prin.
clpal and ita interest accumnlntioms amounted
to the enormous sum ESQ considered at that
tImc,) OF $4,000, 900. Party leaders i'm.
peached tho validity Of tho debt, md recon.
ihendcd that the people refuse 10 provide for
lis payment willie the tax payers relieved
from taxation for one purpose, vigorously op.
posed paying any tnxes mt all The distress
ing condition of The finances is fifty portrayed
in the report of the auditor Of tho State of
December, 1870. Said ho: "To those who
cnl' remember the condition of the State of
limos III lS4', The treasury empty, the Gov.
erhor borrowing money upon lis own credit
t.crI,
on Inc business of the State her bankruptcy
Known and SnGercd mt all nycr ihn wnrii