The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1874-03-12
[For the Dispatch.1
The Stale Debt.

/
[For the Dispatch.I
The Stale Debt.
In the Warrenton linden of the 2Sth ultimo
| there is an interesting letter from the Hon.
James V. Brooke upon the subject of the
State debt. He discusses the question with
genuine interest for the welfare of the State,
and makes suggestion which is certainly a
good one. ,,..
He supposes that there is no probability
| that the Federal Government will assume the
debts of the States-at least not no,c-but
| thinks it might be willing to aid the embar-
rassed States by the loan Of Its superior
credit. He suggests that the thirty-tWo mil
lion per cent. bonds, or Indebtedness OF the
State, could be taken in with sixteen million
of Governments per cent. bonds, and IN that
way reduce the State debt to one half its pre-
sent amount.
such an arrangement would be of immense
benefit to the State, out beg to suggest an
other which would be still more advantage
GUS.
Instead of compromising the debt in
amount or principal, let the compromise EN-
brace only the interest.
Instead of asking Government loan of
S16. Oo0, 900 six per cent. bonds to be ex-
changed for State bonds at fifty per cent. ask
for 3d., 900, 900 of three per cent. bonds with
thirty-four years to run to be exchanged for
| State bonds, bond for bond. A three per
cent. Government bond would no doubt sell
for seventy cents, perhaps more, and would
| be readily accepted by the creditors of the
State.
Let the State obligate itself to pay to the
General Government interest upon the loan
of bonds at the rate of four per cent. per an
| mum to the maturity of the bonds. In other
| words, while the Government will pay but
three per cent. on thirty-two millions,--sa
$500, 900 per annum-the State will pay into
the Treasury of the United States four per
cent, or say 81 $50, 900 per annum.
This excess of one per cent. per annum
| for thirty.four years, il regularly invested at
six per cent. interest, will pay at maturity
| the thirty-tWo millions of bonds at their par
value.
The financial result of this proposition, if
carried into effect, will be that at the end of
tbirty-four years the Government, by regu-
lar investments, will have taken up all the
| bonds, and the State itself be released from
debt.
Since the Inauguration of the credit sys-
tenn schemes for the payment of debts-or
perhaps it would be more nearly correct to
say schemes to avoid the payment of debts
have been numerous, ingenious, and gene
rally impracticable.
Now, it is important to know if these sug-
gestions are as practicable as plausible.
While the method proposed of providing
a sinking fund has no claim to originality,
and the whole plan might be disapproved
| BY the Government, il certainly seems to be
worth the consideration Of our Legislature.
1t may be said that while in theory sink
| ing funds always extinguish public indebt-
edness, yet in practice they never do. This
is because the execution Is generally in toe
hands of the debtor whose needs require
| other applications of the sinking fund. II
Is here proposed not to take up the Govern
ment bonds ourselves, but to pay annually
| the requisite amount into the United States
Treasury, to be applied by the Government
itself. No doubt it would be advantageous
to the State to apply the sinking fund be-
cause the bonds could be bought under par,
Government.
! firm. She needs help, and she needs 1t now.
From inability to provide for her annual In
terest she Is year by year adding to debt
already heavy and grieyous to be borne. It
behooVes her to act and to act promptly.
Whatever may be done should be done not
next year nor by the next Assembly, but
this year, no,o and by the present Assembly.
| No doubt members feel that if the con.
tinuatlon Of the four per cent. payment was all !,
they were required to provide they would
cheerfully and promptly make the pro-
vision. Now the plan proposed requires
no more, and If =" figures do not err"
the provision for four per cent. will not only
pay the annual interest, but in thirty four
years 1t will extinguish the debt. venture
therefore to suggest that our General As.
| sembly shall at once consider and pass such
acts as will bring the matter before the Con
/ greSs OF the United States. Let the bill af.
ford ample pledges OF our faith with abun.
dant guarantees which we cannot abrogate
If we would. Let it embrace pledge
against any increase Of Indebtedness, an ir.
repealable tax (irrepealable because con.
tract with the General GOVERNMENT SUI
6.ient to provide the annual interest and the
sinking fund, and 10 be applied to no other
purpose. In short, make it SO full and so
complete as to place our disposition anG
ability to pay beyond all peradyenture.
| With such bill upon the statute books
let the Legislature appoint q committee q
delegates selected from the Assembly or tht
State at large, or from beth, to 60 10 Wash
lington and submit the matter 10 the authorl
II ties, executive and legislative. It Is no
meant to approve lobbying; indeed, thos'
i who lobby corruptly and for covert end
!, deserve punishment IS enemies OF Societ,
and or public morals. But there Is NOTHING
10 the plan proposed to be ashamed OF, AK
no eonceaiment necessary. ,g esEsY.t
u The ostensible aud real objects OF tho bill
are one and the same thing, patent upon i
I face, sought openly and above board In 81
half of an honest but overburdened people
. at the hands OF u strong, wealthy and po"
erfnl Government It'll fair. open trans
. action. requiring neither money nos seerilef