Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-07-03
FEDERAL MAINrENANCE OF STATE
CREDTT

out to a member Of Boss Shepherd S
District Ring, has an editorial on State
Indebtedness, with particular reference
to the debt Of Tennessee and her fail
ure to pay her July interest. From
that editorial we make the following
extract:
Elk. Secretary McCulloeh IN his fnan-
cial letters. recently written in Europe,
and published largely in America, at
tributes the decline in United States
securities mainly to the neglect of
State authorities and railroad compa-
mics to meet promptly their financial
| engagements with European capital
lists. But SO far as the Federal Gov
eminent is concerned, the public should
not fail to consider the very great diff
ference there is between the delinquen.
cy Of a railroad company and that of
State. Those who buy railroad
bonds understand that they have be-
come an interested party IN a purely
business transaction, with which the
United States Government has no
more connection than the President
himself or the Queen of England.
But when a European capitalist ad-
vances money upon the bonds
of one Of the States of the American
Union, lie reasonably feels that his Sc
| curities are as good as those Of the
Federal government And so they
ought to be. State discredit is Federal
discredit; and if a State Legislaturehas
so little regard for the credit of the
State that it deliberately adjourned
sine die without making provision for
the prompt payment of the interest on
its lords held abroad, does it not seem
reasonable that the Federal govern.
ment should Immediately take cogni-
zance of the fact Its own credit and
honor are at stake. 1t is, morally, the
indOrser Of the bonds issued by States,
as States are Of the bonds and securi-
ties put upon the markets, at home or
abroad, by county and municipal au-
/ thOrities. In this our organic laws are
| probably defective, as they now stand.
States may have heavy pecuniaTy obi
cations and .srepudiate them, AID the
Federal government stands aloof. But
| it cannot avoid theconsequences as they
affect the market value of its own bonds,
its public credit and Its honor. To
avoid this the United States govern
ment should be put legally in a con-
ditiOn to meet promptly the obliga-
TINS Of any State that defaults, and
collects the amount of the defalcation
from the State by direct personal taxa
ton on the ratio Of a property basis
In no other way can the national
credit be protected at home, and
especially abroad, against the conse-
| guences Of State discredits. The debts
of the Southern States are, most of
them, too large; but, If properly man
/ aged, with a patriotic and resolute
| spirit, there Is no one Of them beyond
| the easy control OF the States. The
people IN those STATES profess to be
| terribly alarmed at a TAX Of a few mills
on the dollar, or a few cents on a hun
dred dollars. Their taxes are trihing
compared with those paid by the peo-
pie in many Of the Northern States.
Yet we hear of Reputation nowhere
but IN the South; aud for the sake Of
| their own credit and the credit of the
Federal Government aud the people Of
the Union, we hope that the thought
Of Reputation viii no longer be en-
tertained IN any State that claims
the remotest pTetension to integrity
and honor.
The UNION AND AMERICAN has ever
been an emphatic, uneqUivocal advocate
Of sustaining the credit Of the State
State credit Is like a woman'z honor; It
should be above suspicion. Such las
been our doctrine IN the past; such is
en- finn belief to day. But We cannot
endorse-ray, lot even tolerate-the
views presented by the Chronicle, as
quoted above; for we abhor consolida-
ton, Capitalization, Casarism, in
any shape CT form. Follow
out this principle Of Fedora.
interference, and the States would
Immediately lose everything but their
boundary lines; and it might not be
long before even the latter would be OF
liberated. The petty governments with
which France and Germany play at
battledoor and shuttlecock would en-
Joy absolute independence compared
with the States Of our
Union whenever the Chronicles method
of sustaining State credit is
adopted. No more Of It on this side Of
the Atlantic; We have had enough to
last a century. 1t was Federal inter
ference in the affairs Of the Southern
States that piled up their indebtedness
millions upon millions, and ground
their people into the dust beneath the
heel Of the carpet-bagger.:: Their situa-
ton Is still desperate, but the Chron-
icIe's plan would place 1t beyond all
hope. 1t is not a case where the hair
OF the dog can cure the bite.