The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1877-10-12
: I.na.orner al ..he paellc Dsbt.

un
wear to feel, the burden OF taxation quite as
oppressiyely as those who are so ieuu III
their complaints against II, to express MS
views upon the State-debt question, .G-
gethcr with some OF the reasons upon WHICH
those views are founded? In the first place.
then, am reSdiuster; but wish 10 3s-
fine nv position clearly and emphat'ci.iy
by stating that l am not forciDie Teau-
ulster. II the creditors OF the State OF II.
ginia will come forward voluntarily ana
offer to accept lower rate OF interest on
their bonds, or in any other manner
offer compromise which will oenent the
people OF Virginia, should hail such an
offer with delight, and should earnestly urge
its acceptance. | go further. l thlnR the
State Legislature, before any increase OF
taxes be made SHOULD such step De Iouna
necessary, should exhibit to the bondhoid-
ers the distressed financial condition OF our
peonle and ask for such an adjustment as
that above referred TO. believe that such
a request would be acceded to by the bond
holders, and that satisfactory readiust-
ment can be made; but should it not be ac-
coded to, am not in favor. OF any low
trickery or open dishonesty, each equally
unworthy OF great people. as means OF
avoiding our just obligations. As is well
known. the public debt OF. Virginia
NAV be divided into the funded and
unfunded debt. The funded debt is that
due the owners OF those bonds which were
issued undes. the funding bill to those ere
ditors OF the State who accepted the con-
tract offered 9y that bill. The bill provides
that the bonds issued under it sha! have
coupons attached, payable semi-annually at
the rate OF six per cent per annum, and that
these coupons must DO received by the stare
| in payment Of taxes. Now, these coupons,
being sold somewhat below par, are eagerly
purchased by taxpayers, and must be re-
ceived by the State in payment OF taxes.
| The owners OF the funded debt, therefore,
cannot be deprived OF interest on it so long Us
the funding bill stands, for its machinery is
such that it cannot be evaded except by
direct repeal of the act and this the Court
OF Appeals has decided to be impossible, be-
cause it would impair the obligation OF
contract, and thus be contrary to the United
States Constitution.
| Several indirect methods OF forcing re-
adjustment of the debt have indeed been
proposed; all of which seem to me as i'm
practicable, as they are certainly improper.
One forclble reddjuSter proposes that the
| funded bondholders be threatened with re-
pudiation of the principal when due unless
they accedc TO such terms as the State may
choose to dictate. Suppose the State were
to say, " You must he satiSfiedewith p per
| cent. interest on your bonds or else lose the
principal at malurity.' The bondholders
would then reason thus: I" 1t will be twenty
seven years before our bonds become due;
we are getting about Slj cents in the dollar
for our coupons-i. G., S1j-100 OF 6 per
cent: or about per cent. per annunl-on
our bonds. Thus in twenty years we Will get
back our principal sum, and have seven more
years for interest to run, even II we do
lose the principal ut the end OF that time.
Now, ii we succumh, to the threat Of rcpu-
diation from the STATE, and agree to accept
the >! per cent, at the end OF the twenty
seven wears we shall have received only G75
per cent. of our debt by the payments OF
interest, and as Il government which will
forcibly rc;idiust can hardly be above re-
pudiating, we may very gravely doubt
whether we shalt even then be paid our
principal We will, therefore, hold on to
the certainty OF 135 per cent, rather than
accept certainty of 61@ per cent. and
possibility of 100 per cent. more at the end
of the time" So that this method of forci-
BILE readiustment fails. ....t,
Another readjuster is very bold, and says:
..Let the mem bers Of the Legislature (Which
he supposes to entertain reputation views,
as the term OF Office OF each Supreme Court
Judge shall expire, fill the vacancy with one
whom they know to entertain like senti-
ments as their own, till majority OF that
sort occupy the bench, and then pass law
repeating the funding bill, which, unlike the
former attempt towards the same object,
will be sustained by the packed court
Without stopping to reflect upon the in
fanny of judicial tribunal packed by a
IN do M n
favor OF that party, the probable incom-
petence and legal ignorance of the Judges
who would stoop to be such tools, and the
consequent evils which their decisions upon
general subjects would entail upon the
country, let us remember that this Ques-
ton, being one involving clause Of the
United States Constitution, can be taken
on appeal to the Supreme Court OF the
United States, whose decision against.the
validity of the repeating law can hardly be
questioned. That decision, in accordance
with weli-established law, would be entered
as that Of the Court of Appeals OF Virginia,
to be respected and obeyed as such. So that
this scheme, too. must fall to the ground.
Still another has proposed to place such an
enormous tax on the coupons themselves as
will practically reduce their value to about
two-and-a-half per cent. annual interest OH
the bonds to which they are attached. But,
besides that such tax would be unconsti-
tutional, as not being uniform and being out
of all proportion TO taxes on other property,
it would be equally unconstitutional on an
other ground-viZ., because it would mate
rally impair the obligation Of contract;
for the contract contained in the funding
bill binds the State to pay its credi-
tors 6 per cent, and such tax
imposed by the State would reduce
the interest practically to only o per cent.
And since the question here involved is also
within the appellate jurisdiction OF the
United States Supreme Court, decision by
the State courts favorable to the tax could
avail nothing, for it would surely be re-
yersed by the Federal Court. Indeed, it
may be generally affirmed that there is no
indirect means of accomplishing this OBJ
iect which the law of the land and the
sense of justice of high-minded men forbid
to be directly attained. AS to the unfunded
debt, am compelled 10 admit that there is
no legal machinery which, like that which
protects the funded debt, secures it from
reputation and if the State OF Virginia
choose to disgrace herself by disowning
that debt she has the physical power to do
so. But even il the funding bill can by any
means, direct or indirect, be gotten rid OF,
il the outworks Of protection which legis-
lative art has thrown round those creditors
who chose to seek that protection be de-
stroyed, so that the funded and unfunded
creditors all stand upon the same footing,
still they can place themselves upon the
lofty citadel OF Honesty, and, secure from
the assaults OF all honorable men, set the
demagogues who attack them at defiance.
/ proceed now TO consider briefly a few OF