Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1875-07-15
STATE CREDIT.

S RGRNA1 - NaAo 0tnA0 lhoN nav
stood by the funding bill as it passed
and most notably among these the Knox
vile Press and Herald, the Nashvill,
Union and American aud the Memphil
Appeal, are sounding the alarm of repu
diation because the July interest was moi
paid. So long as the money could be
borrowed no matter, at what rate Of int
rest, these journals had no word of com
plant to utter. The Legislature which
passed the funding act of 1873 left the
rate of taxation at forty cents. The
State Democratic Convention, which mel
at Nashville in August, 1874, declared al
once in favor Of sustaining State credit
and against increasing the rate Of taxa
ton. The ninety-two Democrats elected
to the Legislature on that platform fol-
lowed the idea and refused to reduce the
rate of taxation, although constantly
appealed 10 for measures of relief, and
left the finances Of the State exactly
where the funders did, except to sus-
pend certain heavy penalties on delin-
quents for the years lS73'74 until next
fall. Collections are not suspended abb
solutely, as the unpaid taxes are bearing
6 per cent. interest all the while. The
men who advocated and passed the fund
ing act declared that forty cents would
be enough to meet the interest and cur
rent expenses. Their i%nsincerity or lack
of judgment is shown in decrying the
General Assembly that succeeded for not
doing that which they had said was I'M
necessary. What consistency What
logicl But the funding bill is fastened
on the people, and we do not know that
they a honorably escape the conse-
quences. The prospect Of SPLENDID
crops all over the State has produced a
hopeful feeling, and the people are will
ing to pay to the extent Of their ability.
They really pay fifty cents, for the State
school tax is ten cents. II is said that
the State owes two or three hundred
thousand dollars borrowed to pay the
interest last January. The current ex-
penses are not far from seven hundred
thousand dollars. With the resources
in sight it ispretty safe to say that after
meeting these claims there will
not be enough money collected this
year to pay all the July interest,
but it a be applied as far as it will 90.
II the State Comptroller had succeeded
IN borrowing the money, even at nine
per cent, we presume there would be
no cutlery. The bondholders would have
been appeased, and the people as usual
would have been saddled with an I'M
necessary burden. We understand that
Colonel Gaines could have borrowed the
money at six per cent. on good collat-
erals, but he only had State bonds paid
in by railroads, which bonds have here
tofore been received on Wall street, but
this time we're refused on the ground
that having been once paid in they
should have been cancelled. We are
not discussing this branch Of the subject,
but will remark that very few people
outside Of the State capital ever dreamed
until recently that the Finance Board
was in the habit Of hypotheeating bonds
collected from railroads to borrow money.
Such a policy if pursued would be more
likely to break down than to sustain the
State credit. There is some talk of call.
ing an extra session of the present Leg.
islature. We do not know the exact
object or what could be done. The
State Board Of Finance has all the au.
thority it ever had to borrow money
and the rate of taxation is already fxet
for this year beyond recall. If it is pro
posed as a remedy for present and an
ticipated deficits to increase the rate o
taxation next year, why let those WIT
are posted say so, and it will be in orde
to discuss that proposition with tn,
people.