The Morristown gazette. [volume] (Morristown, Tenn.) 1867-1920, 1875-07-28
OUR JULY INTEREST.
Treasurer Morrow ON Tennes-
sees Default.

From the Union and American.
In view of the drift discussion
and publications regarding the
financial condition OF Tennessee, a
UNION AND AMERICAN reported was
deputized yesterday to obtain what
official information he could, bearing
upon the default in meeting the
July interest and the mooted inn
probability of our being able to meet
the January interest. The following
interview was had with State Treas
urer Morrow, drawing out the facts
and figures of the case and his views
thereon:
Reporter DR.. Morrow, you no.
tice that the newspapers in Tennes-
see are generally discussing the
failure to pay the July interest,
and that nearly all'deplore the de-
fault. You also observe that few
rather intimate that the rate of in.
terest should not have prevented
the borrowing of the money. We
would like to publish an authentic
/ account Of the unsuccessful nego-
tiations. if you would be so kind as
to give me tie facts.
Treasurer Morrow cannot un-
dertake to answer for any one hut
myself, and can say that had we
needed only the money to pay July
int crest and the next January in
terest could have been met, should
not have stopped to count the rate
of interest, nor would any of the
other officers. In December last,
/ when it became necessary to bor-
row for the January, 1875, interest,
we procured the money at cost to
the State of, say, 8 per cent, that be-
ing the best we could do, the inter-
est and commissions amounting to
between s and per cent. The off,
GERS felt that, in the absence of the
Legislature. a default must not be
allowed. When the Legislature met.
it did not take away the borrowing
power, but did what was equivalent,
it suspended the collection Of taxes
or eight months, and thus rendered
| it almost impossible to effect any
loans, as in New York for example,
loans are not easily made over four
months except on Government
bonds. It was the duty of the
Legislature to provide for the July
interest. Instead of doing so, they
deferred tax collections until No
vember. and threw a cloud over
the borrowing power-a clear ma.
jority of both houses being opposed
to this power to borrow.
Reporter How much would it
have been necessary to borrow?
Treasurer Morrow When July
came. there was absolutely no money
with which to pay interest. Ifloans
were effected, it was absolutely Ger
tain that we could not pay back the,
same under six TO nine months, and
of the money borrowed i'm January
for that instalment of interest 5000
900 remained unpaid, which with,
say 100000 borrowed for other
purposes, swelled our loan account
to $5OO.O00. We needed to provide
for the July. rs interest 100000.
making our loan account just 81, ,000-
900. Had the collection of the taxes
gone on as usual, it would have been
practicable to borrow even this large
sum, because at the close of each
month q portion of the money bor-
rowed could have been returned.
In this emergency, two of our home
capitalists offered the State $780,.
600 at ten per cent on such times rs
was desirable, and an effort was
made, without success in New York
to raise the additional 100000.
Reporter-What, then, were
determining reason why the money
was not borrowed?
Treasurer Morrow-This money
we could not promise to repay un-
der six to eight months, and this
fact, together with the doubt as TO
right OF the State Comptroller TO
use as collateral certain bonds i'm his
possession, defeated the loan. and
the default followed. Now ! ex-
press an opinion not heretofore
made public Damely-that had we bor-
rowed 100000 and paid the July
interest. the State could not, by
any manner of means, by co llections
or by loans. have paid the January.
1876, interest, and default at that
time was bond to occur. Then why
borrow I'm July. TO fail six months
later Still The effort to pay was
made. I was opposed to q repetition
OF the high rate paid in January.
1875. because saw that q default
was inevitable in January. 1876, and
hence there was no good sense I'm
borrowing in July. especially at a
high rate.
Reporter In case the July loan
had been effected, on what c0nsid.
Grafton would you have based the
prediction that default in january,
'76. was inevitable?
Treasurer Morrow win give
you the figures. rs we have made
careful and perfectly reliable calcu.
lations on thls very point