Clarksville weekly chronicle. (Clarksville, Tenn.) 1873-1890, 1876-03-25
From the Columbia Herald and Mail.
OUR STATE DEBT.

uOup1 luC WlSuoM OF IOTcIng The QucS-
ton into the politics of the coming
campaign. The issue has been thrust
upon US by certain imprudent advo-
Gates OF partial or total reputation,
each eager to propose his own little
pet scheme, needless apparently or ig-
norant of the tremendous gravity of
the crisis he was helping to hasten.
A matter more important than any
other that can now occupy the atten-
ton of Tennesseeans, more likely if
ignorantly or Unexpectedly handled.
to prove fatal. not only to the present
unity of the Democratic party but to
the future prosperity of the State, de-
serves the careful and dispassionate
study of every good citizen. If the
facts | propose to lay before your read
ers, shall arouse the attention of 9TH
ers more competent to suggest meas
ures suita bic to the emergency, induce
any of my neighbors to lay aside minor
differences and join in hearty effort
for the good of the State. or elicit 9TH
er facts of value, the object of this
letter will be fully attained.
Everybody knows that we have
failed to meet the interest On our
State debt and that the State officers
hold out no hope Of meeting it at the
present rate of taxation. How and
why that debt was created may not be
so well known.
As far back as the year 1896, the
State of Tennessee began a system of
aid to internal improvements, issuing
her bonds in favor of various turn
pixies and railroads. No very large
amount was issued, however, until the
year 1852, when an act was passed
providing for the loan of bonds to
railroads for the purpose of ironing
and equipping them, the State being
secured by first mortgage of the
roads. This Act gave great impetus
to the building of railroads and at the
outbreak of the war in 1862, all now
in operation in the State with one or
two unimportant exceptious) were
completed and most were paying we'll.
The State debt was then about twenty
millions of dollars. The bonds loaned
by the State to the railroads were ia
ken by them at par, and were to be
paid back to the State in full. The
bonds sold by the State before the war
(as the Capitol bonds, &c.) ranged in
price from 93c. to 95c. on the dollar.
The close of the war found the
railroads in an insolvent condition.
Their roadbeds were in very bad or
der, their rollingstock was gone and
the companies were obliged either to
abandon them or go into debt to the
U. S. Government for the rollingstock
and iron necessary to operate them.
They chose the latter alternative, and
as their debts matured went before
the State Legislature (Radical) with
appeals for aid. 1t was granted in
bonds. One or two new companies
were organized, and also had bonds
voted them. Doubtless In the use of
these bonds ii. e., of the State credit
at the time, there was mismanagement
or extravaganza oocasIonally-in one
or two cases, actual dishonesty. After
their issue, the State debt amounted,
if [ remember, to forty-six million
dollars. Then came the failure to
meet the interest on our bonds-the
true history of which is very curious
and will be told in the proper place.
Then the disruption and downfall of
the Radical party, and the successful
effort by the incoming Conservatives
to reduce our debt to manageable
size. This was done by forcing the
solvent railroads to pay their indebt-
ednes to the State-and by selling the
insolvent railroads under her mort
gage-liens.
The overdue interest on the remain
ing debt, accumulated during and since
the war, was seen to be more than we
could hope to meet out of the current
revenues of the State, and all parties
seemed to acquiesce in the necessity
for the passage of the funding bill,
which took place in 1873. Under this
bill about Eve millions of past due in
terest was funded. After this was
done, the Comptroller in his report
estimated the total bonded debt of the
State on December Goth, 1874 at
little over twenty-one millions reduc-
ton of about twenty Eve millions in
six years. The State met her interest
due up to LIST January, 1875. Since
then none has been paid.
Of the ''old bonds" SO called Chose
issued before the war; about four mil
lions were for stock in banks and
turnpikes, for building the State Cap
itol, buying the Hermitage. &c.
Now we hear, every day, people
talking of the injustice of the State
having to pay dollar for dollar on her
bonds and interest on their face, when
she only got forty or fifty cents for
them. | venture the assertion that
the iStGte of Tennessee neuer SOtd one Of
her bonds for less than ninety cents
(goldl on the dollar The lowest
price of which find any trace is nine
ty=three cents. 1t is true that the
State loaned her bonds to railroads,
which sold them in some cases at low
figures. But these same railroads,
wherever solvent, have paid back to
the State, other bonds, and coupons to
the full amount of those loaned them,
and where insolvent have been taken
possession of by the State and sold for
whatever they would bring. by the
solvent ones the State loses nothing,
by the insolvent ones she suffers, just
as a private person suffers, who indor-
ses for bankrupt and has to pay the
note or rather to make the parallel
exact, who lends his own notes to
another and takes security that proves
worthless. The following statement
is not popular. A little thought will
show it to be true. The losses by fall
in value of Tennessee bonds have not
been primarily or chiefly either the
State or her citizens, but the holders
of the bonds. That much of the pres
ent cutlery against the bondhOlders is
raised by spectators who have formed
a ring for the purpose OF depressing
our State credit until they can get hold
Of the bonds, I believe 70 be s4soepti-
bic of nropf. These gentlemen have
no real idea of reputation. They
have tried the same game once before,
and made money by it then. They
think 1t can be done again, but they
are in danger of overreaching them
selves. The country is unprosperous
and ready to grasp almost any thing
that promises relief; mems minds are
unsettled by the recent developments
of fraud in high places; the founda-
tons of public morality and private
credit are yea kened and those W ho
sow for their own selfish aims the
wind of popular clamor, may reap
lwhat they least desiFe1 the whiFlwind
of reputation. / am trespassing on
your space. IF you will allow me, in
a future number I will give among
other facts those which seem to COM
pei belief in the existence of an organ
lied ring to depress the value OF our