The Morristown gazette. [volume] (Morristown, Tenn.) 1867-1920, 1875-07-28
EXECUTIVE OFFICE,
Nashville. July IL.

NdSnftiCs OulJ 4As
SIR-In answer to your inquiry |
have to state that an effort was made
i'm good faith to borrow money to
meet the July interest on the State
debt. The people of the State ex-
pectel that the interest would be
paid if loan could be negotiated
on terms that were at all liberal.
The necessary amount of money
was offered to the Comptroller at
seven and a quarter per cent, per
anBum. but in making a loan of
100000 he was required to deposit
as collateral security the sum of
$850,000 in the bonds of the State.
He could not comply with this re-
quirement for the reason that he was
not provided with the securities de.
manded. It is true. as you suggest,
that the power to negotiate loan
has been granted to the Comp troller,
but he cannot exercise it, so long as
banks and bankers refuse to accept
his undertaking without a pledge of
other security,
There was some hesitation i'm
making the loan on the part of bank
ers on other grounds, bat it could
Lave been negotiated If the Comp
troller. backed as he is by the entire
revenues of the State, would be
ample security for any amount Dor.
rowed under authority of the Finan-
cial Board, but a different opinion
controlled the the action of the bank
ers of New York.
In answer to the other inquiry. I
have this to say: l do not believe
that the present General Assembly
would provide means to pay the
interest on the State debt, or en-
large the power of the Comptroller
of the Treasury to borrow money,
and cannot therefore see any good
result from an extra session of the
Legislature.
I have the honor to be. your
obedient servant, JAS. ID. PORTER.
Gen. Nj. j. Wright, Columbia,
Tenn.
From this it seems that there was
no trouble in securing the requisite
amount of money at a moderate rate
of interest, If the Comptroller had
been supplied with a collateral in
the bonds of the State. 1t will be
remembered that at the time the
efforts we're being made to borrow
in New York, a sensational rumor
obtained circulation here, and found
its way into print and over the wires
to the effect that the State authori.
ties meditated design to offer SIS
callaterals State bonds that had
already been called in. Whether
this was true or not. il was insisted
that this was the only bond collater-
al the State could have afforded, and
these could not be legally used, ex-
cept by an act of the General Assem-.
bly, legalizing them for the express
purpose. We know of no other way
in which the General Assembly
could proyide the Comptroller with
the securities demanded. The press
so far as it has given expression on
the subject Is almost unanimous
against the calling Of an extra ses-
sion of the Legislature. We confess
we cannot see what it could accom-
plish toward solution of the finan-
cial problem, as now presented. ex-
cept 70 legalize enough State bonds
already paid in. to be applied as col
lateral security for the loan, or levy
tax as high as sixty cents, and
provide for its early collection. to
meet the interest past due and to
mature in January. Whether or
not the people of the State approve
Of either. the fact will force itself
upon their action, that the public
expenditure must be kept within
the States revenue resoarces-ex-
penses must be materially reduced, or
revenue materially increased. No