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

touch Il, that non action will lead to liuai
refusal to pay. / earnestly hope that this will
not be the case, but feel it my duty to sug-.
gest the danger, II would be best for all par
ties TO look the difficulties squarely in the face,
and make full and tinal settlement, by con-
vertiug all the outstanding issues into Il coil
solidated debt, upon which the interest WOULD
DO paid without failure. IN my opinion the
creditors would bo willing TO accept such an
issue i'll satisfaction OF their claims, provided
too great a loss should not be inflicted upon
them; and certainly, in view of the coustitu-
tional obligations, as well as regards the
honor and good name and tho material
interests of the State, the General Assembly
should meet them half way. Il + +"
When such final adjustment shall be made it
will no doubt be supported by the good men
of all parties, aud will be acquiesccd in by
the people
PLAN OF ADJUSTMENT.
1t 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 oilers the best guarantee
of safety-securitics wh;ch will not only pay
premium upon the money invested, but which
may be disposed of, without loss, whenever n
change Of investment is desircd-in other
words a marketable security.
Tho value of State security depends
largely upon the confidence OF the purchaser
in the good faith of the State, but more
especially upon tho means which tho State
places Ill the hands of every holder OF her
bonds, to compel tho punctual payment Of
the interest az it accrues, and the principal ut
maturity. The State is sovereign and cannot
be sued; but when shn cutters into contract
with an individual, through her agents, and
directs said agents to perform certain duties
in fulillment of that contract, such individual
AZ. .I.
the will of the State as expressed in such
contract.
Thus, in three.fourths of the States, when
ever tho financial officers are authorized to
create debts by the issue Of State obligations.
the machinery for the punctual payment Of
tho interest aud principal is provided as n
part of the contract; and every individual
who accepts such Obligations in exchange for
tho moneys he advances receives remedy
of which the obligations themselves are the
evidcnce--lor every neglect Of duty in tho
premises on the part of the agents of the
State. Such an obligation offers the best
investment that could possibly be MADE, mas
much as the holder thereof has lien upon
tho entire property of the citizens OF the
State.
How is it with the bonded debt OF this
State
Our debt may be divided into three classes
The first class includes all those bonds Tori
ginally issged,) OF the five classes enumerat-
ed in the decision of the Supreme Court upon
the Morton, Bliss and Company mandamus
case, amounting TO S3,5i9,000.
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 bouds,)
the bonds for funding past due interest and
principal, and funding bills Bank of the State,
and amounts to $4,5l3, ,5O3.35.
The third class are those for which no pro.
Uision has been made for the payment OF
and includes the Blue Ridge bonds, (the alb.
sence of the guarantee in this instance being
probably an oversight) and tho conversion
bonds issued directly by sale or hypothecalon
This class aggregates &c. 900
This concludes the his DRY 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 at fifteen cents. The latter, being II
portion OF those recently lerore 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 ths interest upon tho debt rs it stands.
and that it ~ 10 the interest oil every bC j.
holder That the debt lie reduced in volume to
reasonable limit, so that tile 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 (of which such bond or stock
itself would be the evldelce) to provide for
the payment Of the annually accriling interest
rnrt
tion OF the principal until the whole shall be
thus redeemed; il, in pursuance of such agree
ment, she inatructs her agents (whoever may
represent her fiom the date of tie contract
until the debt is entirely eXtinguished) to levy
and collect annually taxes sufficient TO pay
said interest and retire portion of tile said
principal--if she instructs her agents as
aforesaid to disburse the funds so collected to
the purposes aforesaid aud If embezzlement or
diversion OF said funds be made felony, pun
ishablo as the 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 be placed n the
hands of every bondholder it is evident that
while his new bond would represent upon lis
face sum equal only TO two.thirds or one.lnlf
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, If $4,000 of old bonds worth
Id cents on the dollar, or $780, be exchanged
for $4,000 in new bonds worth al least 40
cents ON the dollar, or $500, the holder will
have made clear gain upon the actual value
Of his bond Of $780, and again, il $4,000 in
old bonds worth % cents on the dollar, or
$500, be exchanged for $4,000 in new bonds
worth at least 40 cents on the dollar, or
$500, tue holder will have made clear gair.
upon tho actual value of his bond OF SlIO