Union and American. [volume] (Greeneville, Tenn.) 1875-1877, 1875-12-23
our STATE INpRBTRDNEss.

J EXECUTIVE 0FFrcE. nashville,
TENSEssEE. Dec. 10, 1575.-James
Morton, Esq, New York, Sir
Your communication, conveying an
article from the New York Times,
is received, The January interest
on the debt OF the State of Tonnes
see will not be paid, and all that
can now be promised is that so
soon as the requisite amount of
money is paid into the treasury it
will be applied to the payment of
the interest due the first of July
last. Before this can be done,
however, there is a balance of two
hundred and fifty five thousand
dollars, borrowed by the State, to
pay the interest due January, 1875,
and an outstanding warrant &C
count Of four hundred and twenty
five thousand dollars to be provi-
ded for.
An effort was made to borrow
the money to pay the last July
interest. l believed then that it
was unfortunate for the State that
the negotiation failed; now l am
thoroughly satisfied that the fail
urc was q fortunate circumstance
both for the State and for the
holders of her securities, for the
reason that the January interest,
due In 4 few days, could not be
paid without resorting to another
loan, and to undertake to carry an
additional loan account of fifteen
hundred thousand dollars, with an
empty Treasury, would be ut the
sacrifice of whatever of credit is
ieIt 10 the State. The executive
officers of the State have hereto
fore resolved to look TO the re-
sources of the State for the pay
ment or the interest or the public
debt, and not to 4. further loan.
The article enclosed by yourself
assumes that the resources derived
from taxable property, amounting
to $30O,O00,0 900 was dedicated to
the payment of the interest on the
State debt, and that 1.-The Legisla-
ture had provided Treasury war
rants to pay the floating debt"
Neither assumption is true. A
tax of four mills was levied by the
State To pay all expenses, and sui
sequently the Legislature provided
for the issuance Of treasury war
rants, receivable III payment for all
dues to the State, limited to $780,
600 at a time To be issued for
current expenses only. And be
of the alleged poverty of the
people, resulting from n general
failure of the crops for the year
1874, the collection ofthe revenues
with which it was expected TO meet
tie last July interest, was suspen-
dcd until the 18th day of Novem-
Der, 1875. Since that date has
been paid into the State Treasury
the sum of %$I5l,l67, 26, of which
amount ST., G90,24 was in Comp
troller's warrants, $l0.6I6 IN Old
issue of Bank of Tennessee, the
balance of sos, 90l.02 in currency.
The writer Of the article enclosed
is in error rs to the expectation of
realizing large collections from the
$4,000 of arrearages reported to
the last Legislature. From a care
full investigation of the, subject it
is found that this sum covers COM
missions not yet allowed, insolven-
cies and land sales not yet report
ed, judgments and debts in suit in
favor of the State, where principal
and sureties are insolvent, and
represents a very small sum of col
lectable revenue.
This statement covers all of your
inquiries except the One in refer
ence to a Reputation of the State
debt; and l do not hesitate to say
that there is not a man in the State
with the slightest claim to respec-
liability who favors such a PROPOSE
ton: but | do believe that there are
many good and wise men in Ten
nessee who believe that the bonds
of the State carry too high q rate
of interest, and hold that it would
be to the interest Of the holders
themselves to consent to such a re-
duction of the rate of interest as
would be acceptable to the tax pay
err; this proposition cannot come
from the State, but | have inforIna
ton that induces the belief that
the large holders of Tennessee
bonds will accept a reduced rate Of
interest, if they a be satisfied
that permanent provision will be
made to pay with promptness the
rate agreed upon, and that all hold
ers of our securities consent to this
reduction. Unless such an arrange
ment is consummated, the shrink
age i'll values in the State will com
pei the next Legislature TO raise
the rate of taxation from four to
six mills on the hundred dollars,
and in any event. 1 am confident
that a sinking fund of some amount
will be provided by the next legis-
iature. Tor the gradual extinguish-
ment of the State debt.
l have the honor to be your ODE
dent servant, JAS. D.. PORTER.