Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-12-03
STATE FINANCES.
The scaling Process rs q Substitute
for che Finding Act -.

To the Union and American: t4 t.tI|
The people are deeply concerned in
contemplating their present financial
condition. Taxation is greatly enhanced
bv the interest on the bonded debt
of the State. The people OF Tennessee
will never repudiate a dollar of their
lust Indebtedness; but at the same time
those who reflect upon matters OF pub
lie eoncernment, cannot but feelhggrlev-
ed at the amount of that Indebtedness,
and many of them imagine that they
have GOOD reason for believing that the
debt is larger than, with good manage
ment, it should have been.
The funding law has been much
abused as the cause of the amount of
our present debt, but this is evidently
erroneous, from the fact that under
that law less than one-third OF the
bonded debt of the State was funded.
The debt upon which the State now
paws interest is not far from SO, 00O,-
900; but the opinion is entertained very
extensively that, to say the least, there
is an i5eqaity In large portion of that
debt. The most of our debt was incur
red under the internal improvement
laws of the State, and those laws In ex-
press terms prohibited the sale of the
bonds ISSUED in aid of works OF later
nal improvement for less than par.
The railroads violated this provision of
the law by selling the bonds for less
than par, thereby diminishing the in
terest of the State in the roads and in
creasing the interest which the people
have to pay.
The purchasers OF the bonds were
affected,with notice of this, as wellas all
other provisions of the law, and cannot
be protected upon the ground that they
were innocent purchasers. The bonds
have been sold at from 40 to so cents
inthe dollar, and we are paying from Ito
II per cent. interest on our public debt,
when, by law, we only bound ourselves
to pay 6 per cent. on the money derived
from the sale Of our bonds. Now, our
debt as it stands is less than 5 per
cent. of the entire wealth of the State,
and no Just thinker can, for a moment,
doubt our ability to pay it; but the
question recurs with emphasis, are we
morally or legally bond to pay the
face value of that debt? Is it not the
duty of our Legislature to devise some
plan by which the people can get credit
for sthe usury that unquestionably has
entered into and now constitutes part
Of our indebtedness?
The funding law was defective In
two particulars. In the first place, it
should have provided for the appoint
trent of commission to ascertain the
actual amount paid for the lands by
the holde-s, and that amount, with SIX
per cent interest, and no more than
that, should have beea authorized to be
funded. In the second place, the law
should have left the bondholder on an
equal footing with the other creditors
of the State, instead of making his
debt preferred debt, which was done,
as the law has been construed by the
constituted authorities of the State.
This was species of class legislation
which has contributed In marked de-
gree TO the unpopularity Of the law.
Is it not yet within the power of the
Legislature to appoint by law a COM
mission to scale the debt of the State
and relieve the people from the pay
ment of 80 much of it as they ought
not in law and conscience to pay?
Hsuch an adjustmentcould be made,
the financial question would be forever
settled, and no amount of manipula-
ton in future could cause it to produce
even ripple on the surface Of Tennes-
see politics.
Let our incoming Legislature address
itself to the consideration of this grave
question with hearty earnestness, for
it viii not down until it has been seri-
ously and patiently considered.
If any legal difficulties arise, our
courts are fully competent for their
solution. The consideration of the
difficult problem has already been too
long postponed. II. 7. r.