Alexandria gazette. [volume] (Alexandria, D.C.) 1834-1974, 1874-03-28
STATE FINANCES.
MESSAGE OF GOVERNOR KEMPER
COMMONWEALTH OF VIRGINIA, !


GOVERNORS OFFICE.
RICHMOND, 9TH March, 1874
Gentlemen ofthe sennte and House Of lee
Thr financial condition of the State has been
and nlsrepresented 10 many
quarters 1t is to be regretted that, not only |
he ability, but the willingness OF the State to
carry present Indebtedness, has been discussed
and the opipious and purposes OF both the le-
gisIa,iye aud executive departments have been
subjected to Injurious miscOnstructlon among
SOME of our creditors. In transmitting to the
General Assembly the accompanying memorial
of the counsel OF foreign boDdholders, L take
OCCASION TO note prevailing errors, and to sub
nit some considerations Dearlug upon the solu-
tiuu of our fiuaucial difficulties.
Public opinion is believed TO have been mis-
led partly by erroneous representations OF our
condition abroad, aud parity by niscalcu atlols
and errors of the authorities of Virginia 10 tho
past. The act Of the goth Of March 1871 COM
moplv knowu as the funding act, unconditional
" uieoped The State to the regular and puDctu-
al uaymeut, thenceforward, Of full interest on
the debt which it provided to be newly funded
in the ame Of Virginia. This action appears
to have been taken without due calculation OF
the diminished resources ofthe State, and with
out needtul inquiry into the question OF her
ability to bear al this tune, the great burthcn
thus assumed Que of the consequences Is that
although the people are discontinued aud sui
tering under existing taxation, rendered very
grievuus to them by their Impoverished clrcum-
stances, yet the revenues of the State have not
enabled us to fulfill our new obligations Ine
practical operation of the funding act has prov.
ed equally unsatisfactory to both bebtor ano
creditor. No question or doubt OF the validity
of the act itself, and no lmpugnment OF the mo-
tives of lis authors, Is implied IN the decara-
ton that its passage was a surprise to our own
people; that it Was preclpltalely enacted with
out such previous communication aud under
slaudug between the Commonwealth and her
creditors, such discovery of the situation, such
disclosure of the impoverished and almost ruin.
cd condition of the State, as our own necessl.
ties, due respect for the creditor class and
established usage i'll like cases, lmperatlVcly do
handed. The result is that the ucW bonds de-
signed to pledge tile State to the payment OF 10
more than two-thrds of the original debt main
tain no higher market value than that repeated
" reached and even exceeded, prior to the
date of the funding act, by the old obligations
which represented the whole debt The re-
suit is, that while cur own people are more dis
satisfied than ever, the complaints OF creditors
are increased instead Of being quoted.
Important principles of huauce, as we'll as
the facts of the situation, seem to have been
lost sight of iu the passage of that act The
object of paramount Importance with public
creditors. 10 any adjustment of Indebtedness
such as ours, is to obtain perfect security tor
the principal sum agreed upon, and especially
for the regular and puDciual payment OF &C
cruing interest, in the best medium aud at the
most convenient places. Certainty aud pune
tuality Of payment arc OF greater Importance to
them than the amount to be paid. Inc hall
of debt perfectly secured, and accompanied
with unduublcd guarantees tor the punctual
payment of interest, is far more desirable to
the classes of capitalists, and has greater power
and value 10 financial circles, than the whole
debt iuadequateiy secured, and with uncer-
lainty, irreguiarty aud dlstrust attendldg stlp-
u!ated payments of interest.
Such is the disposition of the Indebtedness
Of Virginia, resulting from the funding act
and from subsequent legislation modifying or
be doubted if any other arrangement short OF
the horrible alternative of reputation, could
we'll be worse or less satisfactory to all parties
concerned A more uncertain, confused, and
ucongruOus arrangement could scarcely be
made with public Creditors The principal
sum of the debt to be assumed BY the funding
act, the interest pledged upon which is now
over due, is S50,47S, 14l.49, excluding the
amount assigned for settlement with West Vlr
gipia. The evidences of this debt proper be.
long to uany aud nultitorm classes, as follows:
/. Coupon bonds payable to bearer with cou-
pons receivable in payment of taxes.
=. Coupon bouds payable to order with tax
paying coupons.
5. Registered bonds convertible into coupon
bonds with tax-paylng coupons
/. Coupon bonds payable to bearer with cou-
pons not receivable Tor taxes.
5. Registered bonds not convertible into tax
paying coupon bonds.
6. Sterling debt funded.
!. Sterling debt not funded.
s. Sterling bonds not required TO be funded.
9. \ confused mass of old aud uutunded Ger
tifcates of debt, OF large amount, issued under
a long succession of acts Of Assembly, at differ
ent times, in divers forms and for various pur-
poses, and divisible into many classes, but in
respect to which important particulars cannot
to be stated because nowhere to be found 10
the public Offices and, finally, two distinct
classes of new fractional certificates of debt.
Not included in any of the foregoing classes.
are alleged unaSccrtained liabilities incurred by
the State as guarantor. These varied evidences
of debt have different values. The best Of
them usually rate in our own markets at about
ftty cents on the dollar Even to the most
favored of the numerous classes of creditors,
the present arrangement is full Of disadvant-
ages and difficulties. Holders of bonds, with
coupons due and receivable for taxes, find their
coupons heavily deprecated and incapable Of
being passed iato the hands of the tax-collec
tor except with expensive circuity and with
serious Inconvenience and loss. The means,
which some allege to be cffrctua for the further
obstructing or for preventing the future use of
such coupons iu payment of taxes, serve only
to show how inadequate and unwise arc the
securities hitherto devised for even the most
favored class of creditors, and how such in-
sufficient and precarious guarantees for interest
must expose US to increasing complaint and
distrus. as long as the present adjustment
sands uncorrected.
Let it not be supposed that any action cal
culatnd to further impair the value of tax nav