Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1877-06-19

for the whole OF it. The division of tn
State into two States, could, in go wis
affect the rights of the creditors, thoug
it might affect their remedies. 1t wa
like the dissolution of partnership
Both partners remained as firmly boun
for the debts of the partnership, after tn
dissolution, as they had been before.
i Having ascertained the amount of tn
debt, and being unable to pay the inter
est. the Legislature provided, as ever,
railroad company, and every individua
debtor in the State provided, that new
bonds should be given for the arrearage
of interest, which they were unable t,
pay.
Being unwilling that the State of Vir
ginia should continue jointly bound
with West Virginia, for the whole debt
the Legislature, provided by law, for tn
appointment of three Commissioners, t,
ascertain and settle with West Virginia
what proportion of the debt should bt
assumed by West Virginia. and wha
proportion by Virginia. Three Com
missioners, viz: Mr.. John Janney, o
Loudoun, Mr.. William Martin, of Hen
ry, and myself, were elected by the Leg
islature to make this settlement. The
State of West Virginia, however, declin.
ed to appoint commissioners to meet and
confer with US, and thus tie plan OF
settlement failed. A subsequent effort
to effect settlement by other Commits
sicners, was made, but it also failed.
In 1871, the Legislature being still un.
willing that Virginia should remain
bound for the whole debt of the old State
determined, if possible, to sever the
liabilities of the two States. This OF
course, could not be done, except with
the consent of the holders of the bonds
of the old State. 1t was, therefore, de.
termined to make an effort to secure
their consent, by offering to them terms,
which it was hoped would prove accept
able. This led to the passage of what is
commonly known as the Funding Bill.
do not feel called on to. express any
opinion in regard to the merits or de-
merits of that bill, because was not a
member Of the Legislature which passed
it. But will say that have generally
found that those who were most clamor-
GUS in denouncing it, were most ignorant
of its objects, its principles and its pro-
visions. No one contends that bill was
perfect. 1t, doubtless, was defective in
some particulars. And it IS altogether
probable that if our Legislators had for
| gotten that they represented proud spirit
ed Virginians, and had humbled them
selves before her creditors, and with
bowed heads and bated breath, appealed
to their charity, more favorable terms
might have been obtained.
| The theory of that bill was this: At
the time OF its passage, the debt, by the
accumulation of interest, amounted, in
round numbers, to forty-five millions of
dollars. For the whole of this amount,
as have already stated. and as our court
of appeals has decided the State of Vir-
ginia was bound, jointly and severally
with the State of West Virginia. A
large part of this debt was then due,
and the bonds for the residue, were
rapidly approaching maturity. This
condition of things presented knotty
problem for solution. Virginia might
have assumed the whole debt, and
brought suit against West Virginia in
the Supreme Court of the United States,
(which is, by the constitution clothed
with Jurisdiction in suits brought by one
State against another) to recover her
fair proportion of the debt But this
was a tedious, expensive, and disagree
able proceeding. Hence the Legislature
declined to adopt it, and in lieu of it, de
termMed to submit proposition to the
creditors, which, it was hoped, would
lead to more prompt and satisfactory
adjustment.
The whole debt, as l have already
stated. WAS forty five millions of dollars
In the formation of the State of West
Virginia, the old Stat of Virginia was
deprived of about one-third of her terri
tory ,-oDe third of her rpopulation,- land
One-third of her taxable values. Assum-
ing either or all of these elements, COM
bined, as the basis of fapportionment, it
was considered by the Legislature, that
the fair share of the old debt, which
West Virginia should assume, was, one
third and that Virginia should become
responsible for the remaining two thirds.
In other words it was thought just that
West Virginia should assume fifteen
millions, of the debt, and Virginia the
remaining thirty millions.
Following out this idea, the Legisla
ture passed a solemn act, by which it
proposed to the creditors to surrender
their old bonds, which bound both states,
and accept new bonds of the State of
Virginia payable in 81 years for two
thirds of the original debt and certifi-
cate for the other third, for the payment
of which the creditors were to look to
West Virginia. It was also stipulated,
in the proposition, that if West Virgin
ia should, at any time, pay every thing
to Virginia, on account of her share Of
the joint debt, Virginia would faithful
ly account for and pay it over to the
creditors.
To make this proposition more accept.
able to the creditors, the Legislature
pledged the faith of the State for the
punctual payment of the interest on the
new bonds semi-annually, and by way
of collateral security, agreed that the
matured coupons for interest on these
bonds, should be receivable in payment
of all taxes and dues to the Common
wealth.
Some ignorant people maintain, that
this proposition was tainted with repu-
diation and others affirm, that the State
of Virginia, notwithstanding the &C
ceptance of the proposition, and the sur
render of the old bonds, is still liable for
the share of the debt due from West
| Virginia.
Both of these assumption are idle de
lusions-Virginia did not seek to repu-
diate or get rid of, any part of the debt,
for which she was equitably responsible.
She simply submitted a proposition to
her creditors, which they were at perfect
liberty, to accept or decline, as they
might think best. If they declined,
there was an end of the matter. If they
accepted, it became compact between
them; new bargain which annulled
the old obligations, and substituted new
ones for it.
The Joint obligation of the two States
arose out of the old bonds issued before
the war; and when the holders of these
bonds voluntarily surrendered them
and took new obligations, in lieu O.
them, by which Virginia bound hersel
to nav two-thirds. of the original debt
and give a certificate, which was mer'
evidence of the amount due from Yves
Virginia, the old bonds, were annulled
and thereafter had no validity.
The case may be illustrated by a fa-
miliar example: Suppose A. and B. ar
partners in business; A. owning two
thirds, and B. one-third. The firm owe
a debt of three thousand dollars to C.
which is evidenced by note of the part
nership. A dissolution takes place, an,
A. takes two-thirds of the assets, and B
the remaining third A., however, re
tanning the partnership books. 1t
obvious, that, Notwithstanding the dis
solution, both partners are responsible