Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-12-03
OUR PRESENT STATE DEBT.

from H. 7. R., on the State debt, fund
ing, ETC., with a view 10 noting a few
facts notyet generally understood, after
all the discussion to which the matter
has been subjected. The ''inequity"
complained of by our correspondent,
applies to very small proportion Of
the debt. The Brownlow bonds, still
remaining out, which were the only
class sold for 40 or so cents, are few
and far between. These doubtful
issues were the first to seek their re-
deemer, and the most of them havelong
since been Cancelled. The way their
retirement was brought about was this:
Originally, any given railroad could
hquidate its debt to the State only in
such bonds as were issued to that par
ticular road. This restriction was
abolished by an act of the Legislature
authorizing any railroad to. pay its
debts IN any series of bonds, no matter
to whom issued. BrownlOw bonds
always ranged lower In the market,
and, of course, the railroads took ad-
vantage of their cheapness. In this
way, the bulk of these ''forty cent"
bonds were Cancelled, the opera
ton being most active during
the Senter administration. As
consequence, the old ante bellum bonds
remained outstanding, and to-day, with
the accumulated interest, constitute the
great bulk of our burden. Thus the
bonds to which any scheme of scaling
could be applied are almost con-
fined to anti-war issues, which
we believe are generally conceded
to have been sold at fair prices. We
are aware that some degree of fraud
has been charged, even in connection
with these old bonds. 1t has been said
that, In some instances, contractors and
iron-makers, while taking them at par,
charged a fraction more for labor or
iron than they would have done if paid
in cash. At the worst, this did not
amount to more than cent or two on
the dollar. When it comes to such
matters of twenty years, it does seem
that we might let bygones be bygones.
Certainly thechance for remedying the
matter atthis late day, after allthe yicis-
situdes of CIVIL war, without operating
injustice to innocent parties is very
slender.
Our correspondent suggests that the
funding law should have provided a
commission ''to ascertain the actual
amount paid for the bonds by the hold
ers, and that amount with six per cent.
interest, and no more, should be fund.
ed" He asks if it is not still in the
power of the Legislature to organize
such commission. Various consider
ations come in play here. Suppose, for
instance, the present holder should de-
clare the bond cost him nothing, that
he found it, or it was present from his
father-would the commission proposed
above be expected to allow him exactly
nothing with six per cent. on nothing
added? The promise of tine State to
pay six per cent. on the face value of
the bond is plain and unmistakable.
Unless the six per cent. was determined
by the face value, it would be an IN
comprehensive promise. The duty of
the officers issuing the bond is TO see
that the Site gets value received.
Once thrown on the market, Tennes-
see bond is liable to the same ups and
downs as those of the United States
and of all European nations have ex-
perienced. British consols are to-day
only 92a93, while French rentes are
down to 81, and Italian bonds are
somewhere IN the thirties.
Another consideration is, that Ten
nessee capitalist can invest his money
at 10 per cent. interest, drawing $50
per annum on 5000. A six per cent
Tennessee bond for $1,000 will bring
him in only the same amount, $50 year