Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1875-07-01
STATE DEBTS.
The Failure Of Tennessee 10 Pay the
July Interest on Her Debt-A Fed
eFaI-Iike Proposition.

The Memphis APPEAL (DemOcratlc)
says that the State legislature, which is
also Democratic, "failed to make any
reasonable arrangement TO provide for
the July and January interest" on the
State debt, and adds: "1f the State
should be discredited, as she will be, the
fault lies with the legislature" 1t is a
bad omen 10 see the legislators Of
great State so reckle 5sly careless about
the obligations and credit of the COM
monwealth over whose public affairs
they preside. In private business, no
AN OF integrity will allow his note to
goto protest, if 1T within his power to
ayr, it. But here is prosperous State
aoouI % become delinquent through the
sheeT C',-elessness or indifference of its
Legislators. The debt of Tennessee, if
we take H. consideration its popula-
tlOnI wealth nd resources, is 3 mere
OSgateiIe When C1mpared with that of
some other State sonth and north.
The latest and laTges Tenort of tho daht
of Tennessee, to which 70 have sccess.
is that for January l, 1870 when the
debt and liabilities were foTty-n i've mil
lion six hundred and lightweight thou
sand two,hundred and sixty-three dollars
and forty cents. And in evidence of the
ability of the State to meet its financial
obligations with ease, the Memphis AP-
PEAL says: GA tax Of forty cents will,
if continued few years on our increas-
ing taxable wealth, be sufficient to pro-
tect our State credit, pay the interest on
our debt, and eventually to pay the
principal of the debt" And yet, for
some unaccOuntsble and wholly incon-
ceivable reason, no provision is made by
the legislature to pay even the interest
on the debt as it natures. There are no
words in the English language strong
enough to censure sufficiently such an
abandonment of duty to the State and
the nation. We say the nation, for its
credit is suffering to-day from just
such cases of State delinquency.
More than one of the States whose
bonds were sold in Europe when
gold was at par with currency, now re-
fuse TO pay the interest on their bOndsin
anything but greenbacks, while the
holders Of the bonds are morally; if not
legally, entitled to payment in gold or
its equivalent. EX-Secretary M'Culloch
in his financial letters, recently written
in Europe, and published largely in
America, attributes the decline in
United States securities mainly to the
neglect OF State authorities and railroad
companies to meet promptly their finan-
cial engagements with European capt.
talists. But so far as the Federal govern
ment lie concerned, the public should not
fail to consider the very great difference
there is between the delinquency of a
railroad company and that OF State.
Those who buy railroad bonds UNDER
stand that they have become an inter-
ested party in a purely business trans
action, with which the United States
government has no more connection
than the President himself or the Queen
OF England. But when European cap
italist advances money upon the bonds
of one of the Sta tes Of the American IN
ion he reasonably feels that his securities
are as good as those OF the Federal gov
eminent. And so they ought to be.
State discredit is Federal discIedit; and
if State legislature has so little regard
for the credit Of the State that it delib.
erately adjourned sine die without MAX
ing provision for the prompt payment of
the interest on its bonds held abroad,
does it not seem reasonable that the |
Federal government should Immediately |
take cOgniZance Of the fact? Its own |
credit and honor ale at stake. 1t is, !
the indOr5er of the bonds issued |
by States, as States are Of the bonds and |
securities pat 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 pecunisry obli-
cations and Iepudiate them, and the |
Federal government stands aloof. But
II cannota avoid the consequences IS they
affect the market value OF its own bonds,
Its public credit and its honor, To avoid
this the United States government
should be put legally in a condi-
ton to meet promptly the obi
cations Of any State that defaults,
and collect the amount of the
1efalcatiOn from the State by direct
taxation on the ratio OF a
basis. In no other way can
1enational credit be protecte at home,
and especially abroad, against the con-
Of State discTedits. The debts
IF the southern States are, most of them,
90 large; but, if properly managed,
with patriotic and resOlute spirit, there
8 no one of them beyond the easy con-
Tol of the States. The people in those
States profess to be terribly alarmed at
/ tax OF few mills on the dollar, or a
ew cents on a hundred dollars. Their
axes are trifling compared with those
)aid by the people in many of the
States. Yet we hear of Tepu-
iiation nowhere but in the south; and
or the sake Of their own credit and the
redit, OF the Federal government and
he people Of the Union, we hope that
he thought Of reputation will no longer
e entertained in any State that claims
be remotest pretension Of integrity and
oDOF