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

proceed against A. for BIS share, not
withstanding the surrender of the old
obligation, and the substitution of q new
/ agreement between A. and G.?
Il think, therefore, that may dismiss
these idle assertions as calculated to de-
ceive none but the most ignorant.
Inow return to the narrative of events
connected with the funding bill.
After the law embodying the PROPOSE
tions above recited had been promulged.
it became grave question with the
bondhOlders, whether they would accent
or reject the terms offered. On this
matter there was much diversity of
opinion. Some, promptly accepted and
surrendered their old bonds, and re-
ceived new bonds and certificates. 9th
ers hesitated, while guardians, execu-
tors. and trustees, who held bonds in f.
duciary capacities were unwilling to
take the responsibility Of funding until
they could get the authority of the courts
to do so.
The general result, however, was, that
500, ,237 OILS Of the old debt was funded,
with tax-receivable coupons.
The Auditor of Public Accounts, in
his report of 1876, page 4, states the debt
as follows:
ConsOi debt with tax-receivable
Registered bonds and cetificates
Offractions, which may be con-
verted into such bOnds-...-.... 1897 4l5.SO
Amount funded and refunded in
bonds not consol bonds with
Held by Literary fund I'42S245.S
Held by Sinking fund....-.......... 80
Total debt. ...:..... sa5.o0l, Sass
But deducting what is due Lite
rary and Sinking funds............ 6,4l50l7.O5
There remains due from Com
mOnWeath SO fS9. .326.3
Those who accepted the provisions of
the funding bill, and converted their
bonds into "consols with tax-receivable
coupons" were, mainly, those who were
most vigilant, who lived in the United
States, and were, therefore, the first to
get information as to the terms of the
law; while those who did not accept
were foreigners, who lived in remote
countries, or .fiduciaries, representing
widows and orphans, who had to await
the DEGREES of court, before making the
change in the form of their investments.
Within year after the passage of the
Funding bill. little over twenty mill
lions of the debt of Virginia was con-
verted into bonds, the coupons on which
were receivable in payment of taxes and
other dues to the Commonwealth. Be
fore the other creditors cOuldavail them
selves of the provisions of the law and
convert their bonds into "consol bonds"
the Legislature re-assemhed, and, in
hot haste, passed a bill. which purperted
to repeal, and was intended to repeal,
the entire Funding bill. But the cred
xr,l,a h., 81
of the law and complied with its terms
receiving new ones for two-thirds of the
original amount. contended that the
tender of terus by the State, and the
acceptance of and compliance with those
terms by the creditors, constituted a
contract between the parties, and that
under the provisions of the Constitution
of the United States it was not compe-
tent for a subsequent Legislature "to
impair the obligation of the contract"
Judicial proceedings were instituted
to decide the question, and the Supreme
Court of Virginia adjudged that in all
cases in which the propositions contain
ed in the Funding bill had been accept
ed by the creditors, that was valid le-
gal contract between the parties, which
a subsequent Legislature could not an
nul, and, therefore, that the bonds
which had been issued under the Fund
ing bill, with tax receivable coupons at
tached, were valid and legal obligations.
But the Court further and very properly
decided, that in cases where the offer
in the Funding bill had not
been accepted by the creditors, there
was no subsisting contract. 1t was a.
mere offer, which was revocable at any
time before acceptance, and, therefore,
that while it was not competent for the
Legislature to impair the obligation of
a contract that had already been entered
into, it was entirely legitimate for it to
decline to enter into any more contracts
of similar character.
The effect of the legislation on the
subject has been to create a very singu-
lar, and in my Judgment inequitable,
between the creditors
All the obligations of the State were for
money borrowed for public objects, and
should stand on equal ground in law
But here we have twenty millions of
debt, the holders of which can lawfully
collect their interest by presenting the
coupons in payment of taxes and other
dues to the State, while the holders of
the remaining ten millions of debt can
not collect dollar! Is this Just and
right? Nay, is it consistent with those
principles of integrity and fair dealing
which should govern the policy of
great State?
have seen this injustice commented
on, in some quarters, as if the creditors
were responsible for it. But such is not
the fact. 1t was occasioned by the vac
illating course of the Legislature, and
on it rests the responsibility. 1t is much
to be regretted that any such invidious
discrimination should exist, and last
Winter, when the association of bank
ers were seeking to effect fair adjust
ment of the liabilities of the Southern
States, the President of.the commission
wrote to me that this discrimination be-
tween the different classes of creditors
was an insurmountable obstacle in the
path of adjustment. The question now
presents itself, whether fair dealing does
not require that all the creditors of the
State shall be placed on the same foot
ing?
Having thus reviewed the origin and
history of our debt-when, how, and
for what purposes it was created; the
vast advantages which it has secured to
the people of the State, advantages
which they are now enjoying and which
are increasing every year; and having
explained the history of the legislation
which has been had in relation to it pri-
or to 1873, I will now proceed to State
what l, as one of your representatives,
have sought to do in regard to it, during
the last four sessions Of the General AS
sembly.
In the Fall of 1873, without any solic-
itation on my part, and, indeed, with
me, was nominated and elected to the
House of Delegates. In conversation
with gentlemen from various parts of
the county, I learned that I had been
elected with special reference to the
financial difficulties of the State. When
the House met, 1 was designated as
chairman of the committee of Finance.
This devolved on me the duty of looking
closely into the liabilities and resources
of the State. The result of the investi-
cation was by no means encouraging.
It showed that the annual expenditure,
including current expenses of the gov
ernmept, the cost of public schools, and
the interest on the funded portion of the
public debt at six per cent, and the un-
funded portion at four per cent. exceed
ed the resources of the State by about
| of ~ t. l.