The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1875-03-08
(For the Dispatch. J
. The State Debt.

rup PROPOSITION OF. THE AMERICAN BoHDFoHD
ING ASSOCIATION.
undertook to show in my communication
os Saturday that If the proposition OF t6is
comnany were accepted and executed Dy
them we should be able to pay the interest
IN tho debt as funded anew under its scheme
without adding 10 the present rate Oh TAXA
ton.
am satisfied that not one person In one
thousand in the State of Virginia understands
the present condition Of the State DEBT, the
absolute and memorable necessity whicn eX-
lists for some action in regard to it, or the
nroposition of this Bond. Funding ,Assocla-
lion. I shall therefore beg enough Of your
space to explain this whole matter, even at
the risk of seeming proliX, and though eH-
cite the contempt of the well.lutormed LOT
discoursing at such length on what ought TO
be as we'll understood by all as their Alpha
bet.
The two.thirds of the debt of the State OF
VIRGINIA which we acknowledge our llabill-
ty for amounts to S30.000.0 900. Or this, sZ0,'
600 900 have been funded under the provl'
sions of the much .talked-of funding Dill into
what are called consos. With coupons Tor IN
terest at the rate of six per cent. attached,
containing on their face contract that they
will be taken for all dues to THE State OF Viz
ginia. Our Supreme Court of Appeals has
decided that the Legislature cannot pass any
law impairing the obligation OF TINS con.
tract, and that the taxpayers IN the state OF
Virginia are entitled to pay their taxes with
these coupons instead OF money SO long as
they can be obtained. The consequence
of this is that for thirty.four years
the annual yield of these consol-cou'
no "a
Treasury for taxes. SO that before dollar
can be raised TO pay any expense Of the State
government, Governors salary, legislators
Der diem, school fund, or what not, tax
which will yield more than 100000 must
be laid. The repudiatng element of the
Legislature complains that the State cannot
stand such taxation as will raise enough
revenue to support the State government
nav ANYTHING TO the holders of the S1O.OO0,-
900 Of bonds not having these taX-receirable
coupons attached, after receiving annually
81 zoe, 900 Of the taxes into the Treasury in
the form OF these coupons. Therefore they
say that something must be done to get rid OF
this annual overflow of coupons, or else the
holders of the S10,0OO,000 of bonds cannot
be paid anything.
The proposition submitted by the Ameri-
can B0nd.Funding Association, if accepted
by the Legislature and executed by that
company, will rid the State Treasury OF this
annual influx Of these coupons, and will
effect q compromise between the State and
her creditors whereby she will make new
contract to pay four per cent. upon her debt
to all holders thereof instead of six per cent.
TO those who bold sc, 1000 600 of her bonds,
and nothing TO those who hold SlO,0OO,OOO
OF them.
The proposition, reduced to its simplest
form, is this That company asks the ate 10
direct her Treasurer TO deliver to 1t So,0OO,O0o
of new bonds Of the State Of Virginia, paya'
bile thirty wears after date, with interest at
the rate of four per cent. per annum, payable
in gold in London, when the said company
shall bring to the Treasurer S5,oOO,OO0 OF the
present consols, having tax'receiyaole cou-
pons attached, provided said bonds are
brought to the Treasurer on or before the lst
of January, 1876, and that the Treasurer Shall
issue SOC, 600 Of the same new bonds to the
company whenever thereafter il presents to
him 500 002 ofthe same eonsOlS, and 100000
Of the bouds without tax-receiYabe coupons
attached.
Now, bow can this work detriment to tie
State if accepted by her! II 1t be said that
the american Bond Funding Company will
never be able 10 effect this, what concern is
that Of the State3 Nothing is to be done
under it until the company brings $4,000
900 of tie coupon bonds 10 TIE Treasurer;
aud if those are hought and so more, the
State viii have exchanged So, O0e5OO0 OF bonds
bearing fair per cent. interest, s'ltoont tag
receivable coupons attached, for 81, DOC, Oa
OF bonds barring six ger cent. interest WITH
taX.receiyakSe coupons attached. ID anything
is ever done uuder the act, it must work to the
advantage of the State; if nothing is done
under it, she Emply stands in the sane con.
dtion that she was in betGce the proposition
was made. 1t 81 case in which she may
win, but cannot lose. But if the scheme
works out, and tie entire debt comes to he
funded in the new four per cent. bonds, the
erest on our entire debt-Sl 81 ,542 pre-
pium on gold and exchange added-with |
Little more than what we pay noW to two |
thirds of our credltors-vIz., the holders OF
the coupon bonds. Is it possible TO cayil
shout the eXpediency of this?
Some of the doubling Thomas school say
there must be something hidden from view
in proposition which il So fir upon its
face: there must be a cat 10 the meal-tub.
But there is nothing OF the sort. The trans
oItiO0 - no Sl"plC 40 uuJ oAAiA ~ |
business. Almost all our conso debt Is
held in England. These holders receive no |
interest, and in order to get anything from |
their bouds they have to send the coupons
over here and sell them as best they can to
The taxpayers. The insurance, the brokers'
commissions, and the trouble of etfec ing |
this make them willing to sell their bonds 10
the American Bond.Fundfng Company tor |
less than that company will be able to sell |
the new bonds bearing four per cent. gold
interest, which they can give assurance |
will be paid. The profit of the
Company consists in this
Inference. In order TO make the scheme
work the new bonds must be put upon the
european market backed BY pc Terful syn.
cate. If it is so placed it will be easy TO
eli them at more than what tue present con-
oil can be bought for. This is obviously the
Ian " dieh the Bond-Funding Company has
a view. Whether it will work or not time
lone can tell. But it is matter of no con.
equence to- The State Of Virginia whether it
forks or not. II it works, she puts in her
* receivable consols; if 1t fails, the Ameri.
IN Bond.FunGUg Company must foot the
'ss as best it can. (
Had this communication not been pro- i
acted 10 this too n eat length should have ,
sed TO go into 4 further discussion to show
lat the pie-ent rae oi taxation wiz be am /.