Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-02-21
Col. A. S, CALYAR.
Hts Scheme OF Financial SaIvatIOn.
To the Union and American;

! Dy what suppose were lnccntrOYeraDli
facts, that it would take sixty eight cent
on the 500 Of property to pay current ex
penses and the interest on the public debt
1 shall not renew the argument on that sub
ject until some one contrOveTts the fact.
stated by me. Still, L propose in this com
munication, before discussing a plan fo
the relief Of the people, to group a few
facts.
The total receipts for the Two years 1875
and 1874, as shown BY the Comptroller:
report, were S3,G1S, 1882; the total dis
/ bursements were S3,290,I5S.41. The dis
busements only include one six months
interest, S170, 545.0J; add three other IN
stallments and we have for two years, max
| ing the disbursements Of the last two years
the criterion, S2,60l, 1883 as the fund
1 necessary to pay current expenses and the
| whole Of the interest on the public debt.
! This gives for each year to be raised
$3.50, S96.76. This is strengthened by the
| report Of the Comptroller, Jan. l, 1873,
| showing that in the fifteen months previous
/ to that time, although the payment of in
! terest on the State debt was only So, 367. 81.
the disbursements were 3, ,S5S.
| To raise, from all sources, S, 290,1 5S. Il,
the Treasurer had, as shown by the report
LIST January, 1873, S1,6S6,542.Ug In back
taxes. That is, the neR Comptroller came
IN the 1st Of January, 1873, with uncol-
iected taxes for this amount, and he leaves
/ mcOlected taxes lst January, 1915, as
shown in the report Of g, S2S, 81, nd
BY his own showing he owes a debt of
u ,O35,54O.49, leaving after paying his
debls, S192, 1928. Looking 10 the fact
That these deiinquencies run through
many years, it would be safe to say that, if
the tax-list lst January, 1915, paws the debt
made, it will do well.
Il is understood the money was borrow
ed to pay the January interest, bit it does
not appear IN the report, as the report was
made 18th December, 1874, and the inter
est was not due until LIST January. It will
take all the taxes which can be collected
up to April or May to pay back the Dor
roWed mOney-if it was bOrToWed-which
could be asceTtained by enquiring Of the
States fiscal agent.
The purpose of this communication is
not to renew at length the discussion ofthe
question as TO the amount needed and the
ability OF the people to meet it, but to suc-
geSt a relief measure. 1t will be mere
suggestion, trusting to the Legislature to
devise the plan.
Ii being the duty of government to pro-
vide the people medium Of exchange, and
to see that no general calamity cones upon
the country for want Of such medium,
take it for granted that the Legislature is
alive to our deplordbIe condition. use
the word deplorabIe with full apprecia-
ton CT its strength. What can be done?
Under Federal legislation we can have no
relief fhrourh hanl-irrv fa.iTsffoe
Can the State issue treasury nOtes9 This
depends on the question whether they are
"billS Of credit This question Is within
narrow limits. A "bill of credit"
by the early decisions Of the Su-
preme Court Of the United States.
meant something issued BY the State
designed TO circulate as money containing
pledge Of the State to redeem it a. some
future day with money. Mr.. Madison,
after these decisions were made, gave his
view, saying that the meaning was that
only such paper as was made 4 legal tender
could be held to be q bin Of credit. And
IN later decisions the Supreme Court held
that notes issued by bank owned entirely
by State, and even with pledge that the
State would redeem them, were not bills Of
credit.
This leaves the question in much doubt
whether treasury notes issued by a State,
with promise to pay, or redeem them,
can be issued. Certainly they cannot be
issued, if the State undertak es TO compel
people TO take them.
Then what can be done to give the peO-
pie some relief? I answer, nothing would
be safe, unless by legislation, capitalists
can be induced, voluntarily, TO help the
people in the payment of taxes.
The plan l would fall on would be short
and simple. Pass a law entitled "a act
to create a sinking fund, and 20 induce cap
italiSts TO aid in giving the people Of Ten
nesSee peCuniary relief"
To do this l would make a State Board,
composed of the Governor, Secretary of
State, Comptroller and Treasurer, with
power 10 issue certificates Of paid-up
taxes, with which to buyin State bonds.
would limit the amount to 100000, |
and provide that they should be a credit |
on taxes in favor Of whoever might return
them to the Treasurer through collecting
officers; and l would receive three-fOurths
Of all the taxes in them. I would give the
Board the power to make contracts for the
purchase Of State bonds with these certif- /
Gates.
What would be the effect? Holders Of
Tennessee bonds, seeing the inability Of
the people to pay their whole debt,
ard being unable to realize more than
from thirty to fOrty-iye cents on /
their bonds in the market Cfor if the Legs !
latUre fails to provide the money to meet /
the July interest bonds viii 90 to thirty 1
cents) would come forward and gladly take 1
these certificates, estimating their bonds at I
seventy Gems perhaps less. Why would |
they take them at seventy CentS2 Because /
their neighbOrs who have TO pay taxes /
would take them from them at par. thereby /
getting good time by paying interest.
This plan makes il the interest Of the /
State TO make the exchange. because Il gets l
100000 Of bonds in for s., 100000 as /
ard changes its debt from an 1
interest to a nOn-interest bearing debt, and |
makes it the interest Of the bOndholder to 4
10 it, because he gets In private Obliga- |
ions, well secured by mortgage or other /
" Use, nearly one hundred per cent over the |
market value Of his bonds, and it makes /
Il the interest Of the taxpayers to /
take them because they get time, at a mod I.
crate rate Of interest. ratt eT than havetheiT /
lands sold for taxes with heavy penalties. /
And lastly, and as an important feature, /
hOUEh an incident. Of creating a sinking
fund and giving time 20 unfortunate debt /
1rs, you provide the people for two years
with a medium Of exchange by which they 1
will be enabled to make crops.
This plan will put ten thousand men in 1
he State a. work. aiding the people in 1
making crops and getting relief from a
DeCuuiaTy distress 50 general that IL has
reached every cabin in the State.
A striking feature about it is. tia. while |
.he people are being aided and made cheer
ul and willing 10 pay taxes, an actual and 4
JOHgfdc sinking fund is created, which in
ZEN or twelve years, if continued, will ex-
-ingUisl the public debt Heavy burdens
and vet no release from debt, will soon so
lepress a people that they become reckless.
Holders Of bonds where the debt is bur
lensOme ought to understand this. Let |
he bonds be cauceIled'when taken Ia; also
he certificates Of paid up taxes. If it is
10 be continued let new certificates be is
sued.
Virginia is seeking relief by issuing
Sj,O0O,OJ0 Of Treasury notes convertible
into four per cent. bonds; but Mr.. Hunter,
who originated it, admits the difficulty un-
der the Constitution prohibiting bills of
credit; but he thinks by making them con-
-ertlble into bonds the difficulty may be
wooded. But under his bill the object is