The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1874-11-17
TzE DEBT on VIRGINIA.
PROPOSITION FROM
BRITISH BONDHOLDERs.
SCHEME FOR RETIRING THE PRESENT.
DEBT.

4
SCHEME FOR RETIRING THE PRESENT
Mr.. John j. Mackinnon, representing the
American Bond-Funding and Banking Asso-
citation (imited) OF London, was In Rich.
mond during the past week or ten days. he
came to consult with Governor Kemper,
Treasurer Hunter, and some of the leading
hnanciers Of the city, in regard to the debt
Eof Virginia. His Association is accredited
for fair dealing and capacity to execute what
ever they undertake by Duncan, Sherman Il
Co., Of New York. Among its members
and stockholders are many Of the largest
capitalists of Great tBrtain-sucb men as the
Rothschilds, Barings, aud Gilliatts.
They propose to fund the entire debt of
the southern States, and have already opened
negotiations with several Governors. The
matter will be brought before the LegisIa-
tures Of those States at the sessions to be
held this winter. In reference to the debt
of Virginia, which amounts to about $50.
600, 900, exclusive Of past-due and unpaid
interest and the one-third allotted to West
Virginia as her fair share Of the ante beltun1
Indebtedness, Mr.. Mackinnon offered to fund
it in bonds running ten years and bearing
four per cent. interest in gold, or in bonds
running twenty years bearing five per cent.
interest in gold-the principal and interest
to be paid only in London. The Associa.
tion prescrbes as one Of the conditions OF
the contract it proposes to make with the
State that the money to pay the principal
and interest of the new funded debt shall be
derived from fixed portion of the revenue
to be inyiolably set apart for that purpose.
To accomplish that end, they furnish copies
of such acts as it will be necessary for the
General Assembly to pass to insure the de-
sired sscceSs.
The scheme, it is said, was drawn up by
eminent counsel in England and America.
It's authors believe it is amply sufficient to
secure the payment. Of interest apd principal
as they fall due. Itprovides that the Auditor
shall every year levy such direct tax on the
property of the State as will be sufficient to
pay the interest and raise q sinking fund.
The money raised by this taxation is to be
kept separate from all other funds OF the
State, and is to be sacredly appropriated to
the designated object. In case the Auditor
refuses or neglects to raise this tax, according
to the plan, any bondbolder is to have the
right to apply TO the courts for mdndansus
to compel him to do so; and the courts are to
be armed with the power to make the Audi
tor execute his duties under the contract.
The new bonds are to be delivered by the
State Treasurer to the Association as fast as
the Association or their agents are ready to
exchange therefor the outstanding bonds in
sums not less than 100000. The Associa-
tion are represented to own or control at least
Sis, 100000 Of the present bonds of the State.
They believe they will have no difficulty IN
selling the new bonds at higher price than
"consols" now command in the markets
of the country, and thus will be able
to retire the present six per cent. debt OF
Virginia and replace it with the proposed
debt bearing four per cent. interest for ten
years, or five per cent. interest for twenty
years. The whole funding process is prac-
tically to be carried on through this British
association. The Association, it is expected,
will be reimbursed for its risk, trouble, and
expense, by the enhanced value of the new
bonds over and above the present outstand-
ing bonds. The new bonds, they calculate,
will have such value as will justify those
who own "consoIs" in exchanging them
therefor. In that way the taX-receiyable
coupons, now constant source OF Irritation
and trouble to the State, would nearly all be
Withdrawn from circulation.
Mr.. Mackinnon left Richmond for the
South Yesterday. 1t was generally thought
in financial circles, where the matter has
been discussed for week, that some under
standing bad been arrived at between the
Governor and him. It was, however, be-
lieved that the Governor would not consent
to recommend to the General Assembly to
embark in the scheme unless it could ar
range to have the bonds run for thirty
years and yet bear no greater interest than
four per cent.
Within the past week or two the bonds OF
Virginia and of North Carolina have made
a decided advance in the markets of the
Union. This, men of information say, Is
owing to the prospect Of q satisfactory ed.
justment of the debts Of the two States as
suggested by this American Funding and
Banking Association of London.