Knoxville weekly chronicle. [volume] (Knoxville, Tenn.) 1870-1875, 1874-07-29
OUR STATE FINANCES.
The Last Plan Considered ana Ex-
posed


Burch's proposition to establish State
Bank has stirred up other financial
charlatans. Among them are several
anonymous writers in the Nashville
Republican Banner, suggesting that
! the State "call in all the bonds of the
State forthwith, and the interest to
cease Immediately, and then let the
| State issue in lieu of these bonds nom
| interest bearing State Treasury notes,
dollar for dollar, of various denomina-
| tons, say ones, twos, fives, tens, TWEEN
| ties, tifties, hundreds, which notes shall
| be receivable at par for all State, county
and corporation taxes, and for all
| licenses, privileges" etc. viii the
authors of these communications eS-
plain hOtU the State can "cdH in her
| 6ondS3
The bonded debt of the State, after
| the funding process shall be completed,
will aggregate from S25, 600, 600 to $780,
| 0O0, 600. Do the authors of the COM
munications referred to propose to issue
and put in circulation from S25 100000
to $50 900, 600 Of state Treasury notes?
If so, hour, tUhen and by 1Chonl are these
notes to be redeemed? What would
they be worth in comparison with
national currency, and to what extent
would such volume of deprecated
currency demoralize our people and
disturb our commercial relations with
the other States?
Do these gentlemen know that their
proposition conflicts with that clause
| of the Federal Constitution, which in
hibits States from emitting bills of
credit" and that under the authority
of the case of Craig Us. the State Of
Missouri, 4 Peters, 40, decided by the
Supreme Court of the United States
| in 1880, all contracts based on such IL
| legal issues, would be void? What,
| then, is to give these notes credit as
| circulating medium? Their receiva-
| bility in payment of taxes. But if re-
| ceived in payment of taxes and re-is-
sued again, the volume of currency
would remain with all the evils Incl
dent to a superabundance of depreci-
ated paper money. If received in pay
ment of taxes and not applied to the
payment of salaries, ETC., how is the
current expenses of the State to be met
and provided for? Isn't it time for
political quacks to cease their efforts
to enlighten other people on subjects
| they don't themselves understand?
! President Madison took very differ
ent view Of this subject from our mod
ern solons. In the 44th No. of the
FederGlist, defending the clause in the
| Federal Constitution forbidding States
from emitting bills of credit, he
says: This prohibition must give
pleasure to every citizen in proportion
to his love of justice, and his knowl-
edge of the true spring of public pros
perity. The loss which America has
81 ri, no
pestilent effects of paper money on the
necessary confidence between man and
man on the necessary confidence in
the public counsels on the industry
and morals of the people; on the
character of Republican government,
constitutes an enormous debt against
the States chargeable with this unad-
vised measure, which must long res
main unsatistied or rather an accu-
mutation of guilt which can be eX-
pected no otherwise than by volunta-
ry sacrifice on the altar Of justice OF
! the power which has been the instru-
, ment of it.n
Commenting on this part of our ma
J tional Constitution, Judge Story says
1.-The evils attendant upon the issue
: of paper money by the States after the
peace of 1888, here spoken Of, are
/ equally applicable, and perhaps apply
with even increased force to the paper
. issues of the States anG
, the Union during the Revolu
t tionary war. Public, as vel
as private credit was utterly Frustrated
! The fortunes of many individuals were
} destroyed and those Of all persons
t were greatly impaired by the rapid anC
unparalleled depreciation of the papel
2 currency during this period. In truth
9 the history of the paper currency
! which during the revolution, was issueC
+ by Congress alone, is full of melan
choly instruction. TIT
, depreciation was a natural, and indeed
! necessary consequence of the fact
Q that there lUds no fund TO redeem them
t / Congress endeavored to give them ad
r ditional credit by declaring that they
ought to be tender in payment of al
Y private and public debts, aud that I
1 refusal to receive the tender ought Il
, be an extinguishment of the debt, ant
f recommended the States TO pass such
tender laws. They went even further
g and thought proper to declare tina
: whoever should refuse TO receive thi!
t paper in exchange for any property
as gold and siiUer, should be deemed
I On enemy TO the liberties Of the United
e States. This crime of violence anC
: terror, so far from aiding the circula
? ton Of the paper, led on to still farthel
depreciation
The idea Of dlsembarrassing the
, State by any such exped!ent is al
, hallucination, and the proposition Il
} incapable OF practical application. W.
} have been burdened by dishonest anC
: incompetent officials, aud the only re,
lief which 1t is possible for the people
! Of Tennessee To obtain must come
through productive industry, well di
r rected, enlightened legislation, econo
: my in the administration OF publ,
e affairs, and the advancement Of thu
. best and ablest men Of the State L
public positions, and l ought, perhaps
4 A =