The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1877-11-14
fFor the Dispatch.l

the truth in his heart; he that sWcaretn 10
his own heart and changeth not" Senator
Herndon very properly urges his late con-
stituents to keep the faith and observe the
conditions of the contract deliberately en-
tered into with our creditors in
what is known as the funding bill,
passed, as he shows, by majority
OF the Conseryatives-the true repre-
sentatiyes Of the people in the Legislature
OF 1871. Senator Herndon says that he
voted for this bill after mature reflection,
and says: Il thought from the light then
before me-and I still think-it was just,
fair, honorable, and wise settlement OF
yeXed question: good business transac-
ton for the State, and reasonable and fair
for the creditors" beg to differ with Mr..
Herndon as to its being a ,oise settlement Of a
uered question and q good business trans
action for the State. 1t undoubtedly was
an honorable settlement, and just and fair
for the creditors. 1t is binding on US, and
we will carry out its provisions il we are
honorable. But as q business transaction
it was unwise, as will cndcayor to show:
The Gcbt of the Old Dominion was OH July /.
1871
PRINCIPAL. 800. s3o.59S's37 70
Total ,7Os,112 %
The two States, formerly the contractors
of the debt as one people, were mutually
bound for the whole sum. The State bad
been divided by violence into two distinct
States, and there was no power to adIudi-
cate between them to secure settlement Of
the affairs OF the old State. The new peo-
pies felt bound to act sevcrally rs their in
tercstS and sense Of justice to their credl-
tors dictated. Our creditors realized this
fact, and expected each State to assume to
pay its just proportion OF our old debt. 1t
was obvious that Virginia, as the custodian
OF the assets, should first render IN account
OF her stewardship before settlement lust
to all parties could be had. In this partic-
ular Virginia failed to do her duty. She
should have applied the assets to the pay
mcnt OF past-due interest, and then have
proposed to assume two thirds Of the debt
remaiuing, as she held two thirds OF the
values in property on which the debt was
based. But no; she assumed two thirds OF
the principal and two thirds OF the past-due
interest and retained all assets in her hands
DIS her exclusive property. Thus far it was
an excellent business transaction, but it was
not honorable or just. Now, she had it in
her power to reduce the portion she had
assumed to pay 10 so small sum that no
inconvenience would have been felt in pay
ing full interest on the balance. But treas
rres of wickedness profit nothing" and the
advantage gained by the unjust appropria-
ton and conversion Of the assets OF the old
State to our separate use was lost in the
compounding OF interest on the interest we
had assumed to pay. ,....
The principal assumed by lis was .399,224 "a
The interest assumed by us was.... l0,073,5l6 70
Total assumed by MS was. ..$3O,47s,74l 53
Now, our creditors had no right to expect
us to create new debt OF an old debt and
include the accrued interest as principal.
They could only in justice ask that we pay
interest on the two thirds OF the principal
Of the old debt-which was really all OF the
debt on which we could have been asked to
pay interest-and to provide for the pay
ment OF the paSt-due interest as soon rs our
circumstances admitted. Does any reason
able person doubt that il new bonds had
been issued at thirty-four years, or bonds
bearing even date with the old bonds issued,
in like character, for two thirds OF the face
OF the old bonds, and the assets OF the
State sold and the proceeds applied to
the payment OF accrued interest, that to-day
we would have had no trouble in managing
the debt? But we have saeorn to our hurt.
Yet as honorable people let us keep faith
with our creditors. The funding bill was
unwlse also, and not good business settle
ment, in that it failed to secure the right to
the State to recall her six per cent bonds
whenever she had an opportunity to borrow
money at 4 lower rate. propose that we
ask our creditors to correct this error. We
do not 90 to them as beggars. We do not
propose to do anything by violence; but in
our embarrassment we, desiring to do our
best, ask them to accept bond that Will
yield them as much as those they now hold
are yielding-yes, more-and to grant us the
right to borrow money Of others to pay them
us money at lower rate. The consol
bonds have yielded for some time past about
four and four-ffths per cent. to the holders.
II five per cent. bond, redeemable after
five or ten years, to run thirty-four years,
was offered our creditors, think it would
be accepted by nine tenths of them-pro-
yided it contained ON the face Of the bond
solemn pledge that the legislation OH the
debt was final, and that 4 tax should be
levied sufficient to pay the interest prompt
" in the future; the coupons receivable
for taxes. This concession on the part OF
our creditors would save us nearly $500, 900
annually, and bring the annual deficit with
in manageable limits under the existing
taX-bill. -.
The revenue last year from all sources
While our expenses, Including full In
terest, amounted to.................. 1910, 900
Leaving deficit of. ..................s $4,000
Deduct from this criminal
charges that can be saved. 81 10000
Saving by biennial sessions. 10000
BY hiring convict labor....... 10000
By reduction Of interest to Ave ooo ooo
which leaves the deficit Of. ..........$ $4,000
TO which add the amount OF tax on cou-
pons now collected OF nonresident
holders ...''..''''...''.. o6iooS
fan iniuuitous thinsl and we haye.....$ 362,5O0
as the true deficit to be met. The "Moffett
punch % will cover that; or, il that law is
found to be bad, q whiskey-tax bill can be
framed to cover it, and our troubles are met
and overcome. Senator Herndon falls into
very singular error in the first part OF bis
address to his constituents, and one that is
calculated to do much harm. He says: "As
taxpayer don't want the funding bill
repealed or iuterfered with, and Twill tell
you the reason why: First, because /
save fourteen per cent. OF my ta1es by
buying the dishonored coupons; second,
because it saves to the taxpayers Of the
whole State by enabling them to pay their
taxes in the dishonored coupons about
S170,000; and third, because it enables the
State, by dishonoring her obligations, to
squeeze q tax OF S52,500 out OF the non-re-
sident bondholders."
The Senator surely must have known that
this state OF things must pass away when