Shenandoah herald. [volume] (Woodstock, Va.) 1865-1974, 1875-07-01
VIRGINIA FINANCES.

MeCulloch, published in the New \ ork
Tribune, is devoted to Virginia fnan-
ces. After promising that prior to
1861 the credit Of no one State in the
Union was better in England than that
Of Virginia, and she had ayalled her.
self of that credit to a liberal extent for
the construction Of public works, and
after speaking of the strong attach
ment felt to Virginia by the ruling
classes in England, Mr.. McCulloch says
that, as she was known to have suffered
severely by the late civil war, the Eng
lish bondhollers waited patiently for
a number of years for the resumption
Of interest payments. He then pro-
ceeds:
cat length, when forbearance SEEM
ed 20 longer a duty, cooperating with
other creditors, they asked that pay
ment should be no longer delayed, and
negotiations wele entered into between
the representatives Of the bondholders
and the representatives the State, which
resulted in the passage by the General
Assembly of what is known as the
funding act BY this act the officers OF
the State were authorized to issue new
bonds, the interest on which should
be receivable for taxes for two-thirds
of the principal and accrued interest
of the old one, and certificates for the
other third. These certificates repre-
sented what was regarded by the Gen
eral Assembly as the part of the State
debt which ought in justice to be as
sumed by West Virginia, which had
been carved out of the Old Dominion
soon after the commencement of the
war, but as the new State had declined
to acknowledge any obligation to as
sumo the payment Of any portion Of the
State debt, Oh the ground that no part
of the public works, for the construc-
ton of which the debt had been con-
tracted, was included within her boun~
daries, these certificates were consider
ed both by Virginia and the creditors
who were to receive them in satistae-
ton Of one third part of their claims as
being of but little value
"This compromise, although not re-
garded with favor by a majority of
English creditors, was nevertheless ac-
cepted by them as definite settleI
ment of their claims, and one which
under the circumstances was not dis
creditable to the State AS soon as the
provisions of the act and the ways and
means of proceeding under it were
understood, the work of forwarding
their bonds for conversion, although
it was attended with considerable
trouble and expense, was commenced
a d continued by the holders until tie
next session of the General Assembly,
when a considerable amount being in
transitu, some two-thirds only Of the
bonds having been funded, that part
Of the funding act which authorized
the issue of bonds, the coupons Of
which were to be receivable for taxes,
was promptly repealed, and funding
was virtually suspended. At the same
time the officers OF the State were pros
hibited from receiving in payment of
taxes the coupons which upon their
face were expressly made receivable for
taxes, nor were they SO received until
after the courts Of the State decided
that they were issued under contract
between the State and the bondholders
which the Legislature had no right to
rescind. The result is that the State
has two classes of Observation-Disclosures
instead of one, the larger class holding
bonds the coupons Of which are re-
celvable for taxes, but are not cashed
at the treasury, the smaller class hold
ing bonds the coupons of which ar e
not receivable for taxes, and on which
nothing is being paid. Of course all
parties are dissatisfied. The State is
dissatisfied because a part of her cred
itors stand on different footing from
the others. The holders of the tax re-
ceivable coupons are dissatisfied because
as the coupons which they hold are
only available to taxpayers, they are
compelled to part with them at a
heavy discount The holders of the
bonds the coupons of which are not re.
ceivable for taxes are not only dissatis-
fed, but they are indignant at the in
justice to which they are being sub.
jected in receiving nothing, While other
creditors, more active and vigilant,
perhaps, certainly more fortunate than
themselves, are being partially paid.
Virginia is in many important respects
one of the most inviting States in the
Union to the better class of English
emigrants, but this class will be re-
PEELED from her borders SO long as she
fails to make q satisfactory arrange.
ment with her dissatisfied creditors
Looking only to the question in a
pecnniary point of view, aside entirely
from the moral obligations which she
is under to her creditors. Virginia is
making capital mistake in permitting
her former good name to be thus tar
nished in the house of her friends
No State is in greater need of emigra-
ton and capital, and these will go to
her very slowly as long as she can be
justly charged with unfaithfl.lness to
ner engagements.