Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-06-10
TILLMAN'S 1905.
What He Has 10 Say i'm Reply 10 the
Union and Americans Criticisms
An Elaborate Exposition Of his FL
nancial Plan.

What He Has 20 Say i'm Reply 10 the
Union and Americans Criticisms
An Elaborate Exposition Of his FL
nanciaI Plan.
To the Union and American:
SHELBYvILLE, June q, 1S74.-I thank
ven for the notice recently giyer my views
in regard TO the management Of our State
debt. and regret with you that your space
forbade publishing of my article in full.
Though your condemnation might have
been more elaborate and emphatic, it would
have given no ofiense to me, for if the plan
/ propose is inherently dishonest and un-
inst TO our creditors. under our surround
inos and circumstances. / would abandon
it when shown to be so by you or by any
Others.
agree with you that no just debt should
he compounded or repudiated if the debtor
can pay it, though some of it might have
been unwisely CONTRACTED. But you are
aware that the people are greatly embar-
raised. Many much greater than l are
contending that they cannot bear the i'll
creased taxation necessary to prevent in
creased Indebtedness of the State, and are
moposing plans as much at variance with
our literal and legal obligations as the plan
Ipropose, and, as L conceive, less in the in
tereSt of the taxpayers, and not more just
10 the bondhOlders.
e We may all be wrong, andkou right, in
holding that the people can and will i'm
pose Sufficient taxes upon themselves, and
paw them, TO meet promptly the semi-an-
nual interest on the State debt, and defray
the usual and ordinary expenses Of the
State government. Ifa majority are with YOU
the minority should of course cheerfully sub
init, and pay their quota if it carries their
homes under the tax-gatherer'S hammer. But
| do not believe they can and will do so un-
der the gradual contraction of currency
that has been going on, to say nothing of
the gloomy crop prospects that now depress
the farmer, who ultimately pays everything
and feeds everybody. Hence, l think some
compounding with creditors, suspension,
or, as a last resort, reputation, is near at
hand.
In your criticism of my plan, ] am glad
10 believe You comprehend the general out
lines, notwithstanding the imperfect print
ing of my article in the Sbelbyrilie Com
mercidI. / see YOU have made calculations
and do not deny that, though l propose to
allow $50 interest instead of q, debt OF
twenty-five millions would be liquidated
with a great saving to the taxpayers, under
NV plan of combining principal and inter
est payments. instead of under the present
plan of interest payment alone. propose
TO paw 7-30 interest for two reasons: One,
as a consideration to bondholders to eX-
change the present bonds for the new Sc
ries which l propose; another, because it is
a rate easily counted, being just two cents
a day on the hundred dollars.
You object to my plan, because, you say,
10
.llv increased at an accelerating ratio" and
that ''the present law proposes a steady
burden. not 20 be increased till the State
develops strength to bear it and decrease
the urincipal." Now, would not the STATE
be more likely to develop strength by Staff
ing with light burden than with heavy
one? You would have her hObble on, v it'll
a load of over two millions annually, and
look for development, while l would have
her start off with, say half that much, and
see development corresponding to and JUS
tifying an annual increase of State revenue
to the amount of seEenty-five or a hundred
thousand dollars, thus meeting the annual
increase of interest accruing under my
plan.
You say that by starting off on my plan,
and commencing with paying million
and its Interest annually, We would, an
thirteen wears from now, have to pay two
millions. This is so; but / submit that We
could start off with paying a million and
increase IT annually Seventy-three thou
sand dollars. and be better able to pay two
millions thirteen years hence, than we
would be TO do it and pay steadily one mil
lion five hundred thousand annually from
now until then. And then, when we had
done IL under my plan, We would have
thirteen millions OF the principal of our
debt extinguished, while under yours,
there would not have been a dime of the
principal paid.
You say the suppOSitiOn that men who
need money badly would give handsome
prenlium, s'for bonds, the interest pay
ments on which are to be postponed for in
definite years, is simplicity itself" This
might be so, if those holding the present
bonds felt perfectly assured that they would
get their interest semi-annually for forty
wears. and at the end thereof the principal;
but suppose they did not feel well assured
of all this, but should be assured that they
could get a definite amount of principal
and interest, not in ".indefiuite years" but
in definite years, where would the '-sim-
plicity" come in, if they did not at least eN-
change at par
Nv plan does not admit of any exchange
of the proposed new for the present or old
bonds below par, and it is probable that
only a few millions first falling due would
bring a premium, but if only the first mil
lion falling due brought a premium, and
only five millions We're offered every five
wears, there would be five millions in TWEEN
ty-five yielding a premium. But even
without any premium. less than fifty mil
lions of dollars would, under my plan, ex-
1inolish a debt of twenty-five millions
bearing $50 interest, while it will take
fhirfy-seyen millions and a half to pay, un-
der the present plan, the interest alone on
the same amount, in the same time, to
wit: twenty-five years, making saving OF
a half million year TO the taxpayers.
Permit me TO make a brief illustration
that | NAV be properly understood. and the
defects of my plan, if defective, thoroughly
exposed. Suppose that, in a time of great
general prosperity "a bOrrows of B twenty.
five hundred dollars at 6 per cent, and eX'
ecutes twenty-five notes, each for one hun
dred dollars. interest TO be paid annually
and the principal at the expiration Of TWEEN
tv-five wears. \ invests the money in good
rich lands, is industrious, works and al
work about him; but food or fire destroy:
his fencing and crops and browns or burns
some of the live stock he had hired or PAID
for with the money he had borrowed, anC
upon him alone now devolves the labor OF
making a support for the family, and meet
inc the annual interest OF one hundred
and fifty dollars on the twenty
five hundred borrowed Of B. Now sup
pose he saws to B, that he does not see how
he is ever to pay the annual Interest anC