Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-08-18
THAT THIRD SECTION.

THAT THIRD sECEAON.
The following is the third section of
the funding law, especially pointed out
for repeal by the County Convention of
Weakley:
Sec. 8. Be it further enacted. That
the faith. honor and credit of the State
of Tennessee is hereby pledged for the
payment of said bonds at maturity;
and for providing a sinking fund for
that purpose, and for the prompt pay
ment of interest on said bonds as well
as the interest on the registered bonds
hereinafter provided for, commencing
with the interest 10 fall due the lst day
of July, 1874.
And it is hereby made the duty of
the Treasurer of the State to set apart
for that exclusive purpose so much OF
the revenues as may be necessary to
paw the interest on said bonds, com
mencing with the interest that falls
due the 1st day Of July, 1874.
Provided, nevertheless, that coupons
of bonds owned or held in trust by ed
ucational institutions within this State
shall be paid and not funded-tbose
past due and those not yet due, as they
become due. And If those institutions
elect not t. fund their bonds, they shall
nevertheless be entitled to their inter
est at maturity;
And provided further, that prefer
ence shall be given TO the interest on
the school fund as provided by law.
We have divided it into paragraphs,
showing the -four distinct provisions 1t
contains.
The last two give a preference to the
cause Of education, and to educational
institutions that pinned their faith on
the credit of Tennessee. We prefer to
believe that our Weakley county friends
condemned these two provisos without
knowing they were part of the section
IN question.
The pledge of the States honor with
which the section opens applies to all
the obligations of tine State, old or new,
registered or funded. No new debt
has been created by funding. These
six thousand bonds have been issued at
par IN liquidation of old debts that
we're overdue, some of them fourteen
wears. The bulk of the contracts on
which these debts were based ante-date
the war, some of them being made as
far back as 1888. The honor of the
State was pledged long ago because
these contracts were made IN honOra-
bic times. Can we repudiate the new
promises, after we have cancelled with
them these old honest debts? Can we,
for instance, repudiate the debt con-
tracted to build our noble Statehouse?
That class of bonds matured in 1870,
and have been funded at par, minus
four years interest.
We presume, however, that the main
offence Of the third section quoted
above is the second paragraph as fol-
lows:
And it is hereby made the duty of
the Treasurer of the State To set apart
for that exclusive purpose so much OF
the revenues as may be necessary to
paw the interest on said bonds, COM
mcncing with the interest that falls due
the lst day of July, 1874.
This is like the appropriation clause
Of any other bill calling for money.
Interest cannot be paid without money,
and money cannot be paid out of the
State Treasury without authorization.
The words said bonds in tho above
apply to registered as well as funded.
To repeal this clause would look like a
direct divesting of the State Treasurer
Of power to pay a cent of interest on
any debt of the State-even the school
fund itself and the bonds in which the
endowments of home colleges are
locked up.
But this paragraph has been con-
strued to mean that the State interest
must be paid before State expenses.
! Certainly distinct preference Is given
To the REGISTERED school bond further
on. The one difference between this
and other appropriation bills is that
the phrase mot otherwise appropr1a-
ted does not appear. In other words
the interest is placed on a level with
current expenses and ahead OF casual
appropriations, like those for Lunatlc
Asylums in East and in West Tennes'
see. Possibly this was the intent OF
Of the Legislature. They certainly ex.
pected current expenses and interest to
be both paid after July /, 1874. And
they probably designed that these two
must be paid before launching into
other appropriations and expendi,
! lures. o..
Such being the practical effect as 1t
stands, let us consider its future bear
/ ings. If we propose to pay both ex'
penses and interest, it seems desirable
! that these should be first provided for
By So doing, extravagant appropna'
tiops in other directions, and the con-
traction of new debts, may be pre-
vented. In this degree the disputed
| clause is Of good effect and IN keeping
with the economic temper of the times
If. as the section stands, it bears the