Knoxville Whig and chronicle. [volume] (Knoxville, Tenn.) 1875-1882, 1875-12-22
OUR STATE INDEBTEDNESS.
An Opcu Le,,cr from GOV. Porter.

ENECrurIvE OFFICE, NASHVILLE,
TENN, Dee lj, lS75.-James Morton,
| Esq., New Nprk-Sir: Your commu-
| uic,tlu., covering article from the
New York Times, is received. The
| January interest on tue debt Of the
| Sute OF Tennessee will not be paid,
AMI al that cau now be promised is
! that ~ -ouu Hs the requisite amount Of
money l. paid into the treasury il will
| be applied To the payment of the in
terest du, the first of July last. Be
| fore tnls eau 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,
| 1915, and All outstanding warrant ac-
count of four hundred and twenty
five thousand dollars to be provided
| Sor.
An effort was made to borrow the
money to pay last July interest. be-
| lieved then that it was unfortunate for
| the State that the negotiation failed !;
now ! am thoroughly satisfied that the
failure was fortunate circumstance,
both for the State and for the holders
of her securities, for the reason that
| the January interest, due in a few
days, could not be paid without resort
ing to another loan, and to undertake
to carry an additional loan account of
| fifteen hundred thousand dollars, with
an empty Treasury, would simply be
at the sacrifice of whatever of credit is
| left the State. The executive officers
OF the State have therefore resolved TO
| look to the resources of the State for
| the payment Of the interest On the
! public debt, and not Co n further loan.
The article enclosed by yourself as
| sumes that the resources derived from
taxable property, amounting TO $500, =
uOO,OOO was dedicated to the payment
Of the interest ON the State debt,
and that " the Legislature had pro-
vided Treasury warrants to pay the
floating ugbt.h Neither assumption is
true, a tax of four mills was levied
by the State To pay all expenses, and
subsequently the Legislature provided
for the issuance of treasury waTrants,
receivable i'm payment for all dues to
the State, limited to $500, 600 at time
to be issued for current expenses only
And because of the alleged poverty o.
the people, resulting from a general
failure of the crops for the year 1874
the collection Of the revenues with
I which it was expected to meet the last
July interest, was suspended until the
10Th day of November, 1875. Since
that date there has been paid into the
State Treasury the sum of $l5l, ,lG7. 90
of which amount S7l 500 24 was in
! Comptroller's warrants, Sl0,576 in old
issue of Bank Of Tennessee, the balance
of S6S, ,90l02 in currency. The writer
of the article enclosed, is in error as tC
the expectation Of realizing large col
lections from the S770, 600 of arrearages
reported TO the last Legislature. From
a careful investigation of the subject
it is found that this sum covers com
missions not yet allowed, insolvencie'
and land sales not yet reported, iudg
ments and debts in suit in favor of the
State, where principal and sureties are
insOlvent, and represents a very small
sum Of collectable revenue.
This statement covers all Of your in.
quiries except the one in reference to 6
reputation of the State debt; and l dc
not hesitate to say that there Is not {
man in the State with the slightest
claim to pectability who favors such
a proposition, but l do believe that
there are many good and wise men in
| Tennessee who believe that the bonds
Of the State carry too high a rate Of in
terest, and hold that it would be to the
interest of the holders themselves to
| consent to such q reduction of the
rate of interest as would be acceptable
to the tax payer. This proposition can
not come from the State, but / have in.
| formation that induces the belief that
| the large holders of Tennessee bonds
will accept reduced rate of interest, il
| they can be satisfied that permanent
provision will be made to pay with
promptness the rate agreed upon, and
| that all holders of our securities con-
sent to this reduction. Unless such an
arrangement is consummated, the
shrinkage in values in the State will
compel the next Legislature to raise
| the rate of taxation from
| four to six mills on the one hundred
dollars, and in any event / am conf
dent that sinking fund of some
amount will be provided by the next
Legislature for the gradual extinguish-
ment of the State debt.
| have the honor to be your obedient
| servant, JAS. ID. PORTER.
Fram Washington college.