The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1874-03-19
The State Debt.

[For the Dispatchl
In your issue of yesterday I find COM
munication from gentleman who signs
himself Southerner," ia which he does me
the honor of noticing with commentator
an article which published some weeks
since upon the subject of the State debt. |
wrote it with no view of claiming credit for
originality, or perfection in the plan sug-
gested. but with the hope that there was
enough of merit in it to attract some atten-
ton and lead to similar effort on the part Of
others. I am therefore grati6ed that your
correspondent has subjected it to careful
scrutiny, and that its general features meet
his appreciation. He suggests, however,
some notifications that may be of advantage
in the practical operation Of the scheme, and
which are we'll worthy of consideration.
Instead of diminishing the principal OF the
State debt he proposes that the reduction
shall be in the rate of interest. In other
words, that S32000,000 of United States
Three per cent. securities be exchanged for
the S32 900, 900 of sic per cent. State bonds
that the State shall pay to the United States
interest for the loan at the rate Of four per
cent, the extra one per cent. to be treated as
sinkingf fund, which in thirty-four years
would pay the principal and leave the Slate
free from debt. The proposition Suggested
was for the loan of SIG, 100000 of Govern
ment securities bearing six per cent, to be
exchanged for State bonds at the rate of one
FOR two. This would be certainly the better
Of the two so far as the taxpayer is con-
cerned, since it would require asinkng-fund
OF only 100000 to pay the principal OF
$4,000, 900 in thirty.four years, while the
Dian of Southerner would require sink
ing.fund of $4,000, being 100000 per an
mum more than the other. But on the other
hand. he forcibly argues that the modifca-
tion he suggests would tend to increase the
value of the security received By the creditor
and insure his acceptance. Of course this
is an important point to be gained, and if the
payment of four per cent. interest for thirty
four years can be made to effect discharge
of the debt, principal and interest, it would
be "a consummation most deyOutly to be
wished"
The criticism of "Southerner upon the
practical operation Of sinklng.funds, as CON-
pared with the theory on which they are
founded, is fully sustained by experience.
How far the plan he suggests may be held 10
ce a compliance with the mandate OF the
Constitution is matter for consideration.
There may be no reason why the United
States might not be made the agency through
which the one per cent. per annum OF sink
,ng-fund shall be managed by investment,
&c. The State might 90 it as well, II 1t
would.
The details of such a scheme as has been
suggested, or such notifications as further
consideration may suggest, are matters OF
minor importance. The main question is
this: Will any scheme at all be attempted to
mitigate the burden Of the public debt? Or,
shall our Legislature labor on from year to
year in the VAIN effort TO meet its demands
without increasing the burdens of the peo-
Pile? Bills may be devised to pay four per
cent. of interest, but the other two per cent.
are left 10 swell the debt, with no provision
for its payment either il thirty.four years or
thirty -four hundred.
In such condition Of things any scheme
of relief which i, not absurd upon its face is
worthy Of attention.. I" 1t can't be done,"
may excuse non-action in the judgment OF
those who deem their own conclusions in
fallible, but it is not accepted as sufficient
answer by others who believe I" at can De
DONE" These latter land there are many OF
them) demand the test of an experiment. a
failure can bring with it no diShonor. Sue
cess would be invaluable. -.
The proper mode OF conducting such
negotiation as would become necessary has
been set forth by Southerner." Itpossesses
advantages over the customary mode OF in
accommodation between the State and
Federal Government which must be appa-
rent to every one upon moments rehec-
ton. .--..-..-....----.-.--.
Excuse my trespassing so far on your
space. My object in commencing this COM
munication was merely to express my appre-
citation of the clear and forcible manner in
which your Richmond correspondent has
handled the subject, in the general features
of which we agree. Yours,
JAMES Y. BROOKE.
Warrenton, March IA, 1874.