Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1878-06-30
Writes an Open Letter Reviewing the
Growth Of the State Debt, Stating
the Origin and Reasons for the
Several Issues OF Bonds.
Rise and Progress OF the Internal I'M
pr0vement Fever, Ont OF which the
Heavy Load of State Indebt-
edness Sprung.
Amount of the State Debt on the First
of January, 1873, S23,212, 6O6-
What we Must do to be Saved
Defense OF his Policy.
Special to the Memphis Appeal. ]

Special to the Memphis Appeal
NASHVILLE, June Ex-Governor Porter to
day gave to the public the following open let
ter on State finances:
EXECUTIVE OFFICE
NASHVILLE, TENN, June go, 1873.
w. +. Harrington, Esq, Editor of the Carthag
DEAR SIR-Your letter is received. Tn
inquiries you make cover wide field, but
will endeavor to answer them without enter
ing into too many details.
| During the administration of Governo
| William Carroll the legislature of the Stat
| passed an act authorizing the issuance of fv
hundred Ave per cent. bonds of one Thousand
dollars each In payment of the stock to which
the State subscribed IN the Union bank o
| tennessee. The bonds were issued In Janu
airy, 1888, and delivered to the bank, ant
! constituted the first issuance of bonds by tn
State. The business of the bank was sue
cessfully conducted, and during its existence
paid In cash to the State, upon this orlgina
! subscription, dividends amounting to sere'
| hundred and thirty thousand dollars. On
hundred and twenty-five of these bonds ar
| still unpaid.
IN THE LEGISLATURE OF 1856
plan of internal improvements was inau
gurated by the passage of an act providing to
a general system. The passage of this &C
! was recommended, In a report of grea
power, by a committee of which Meredith P
Gentry, A. o. P. Nicholson, Robertson TopE
| and others were members. The act provided
that whenever the railroad and turnpike
companies, then Incorporated, should furnish
evidence to the governor that two-thlrds Of
the stock necessary for their construction was
| secured by private. subscription, he should
subscribe for the remaining third of the stock
| for the State, for which the State was to issue
five and 'a-quarter per cent bonds of one
1Ala -
1 ty-fve years. Two hundred and forty
| SIX of these bonds were Issued-one hundred
! and nine to the Lagrange and Memphis rail-
! road, sixty-six to the Nashville, Murfrees-
. boro and Shelbyville turnpike COM
pany, thirty-one to the Gallatin
/ turnpike company, and forty to
the Lebanon and Nashville turnpike company.
are unpaid. The canvass of 1887 developed
a powerful popular sentiment In favor of fur
| Their State aid to- works of internal improve
ment. Governor Cannon, In his message of
that year, referring to the aid already grant,
ed, spoke of its ''salutary" influence upon
the country, recommended an extension of
the system, with additional State aid. At
this session of 1878 the legislature passed
the act to establish State bank, to raise a
fund for internal improvements, and to aid
in the establishment of a system of education.
Two and half million dollars in six per cent.
were issued to the bank; one million of the
bonds were sold at par for cash; the remain
der were held until the passage of the act of
1910, when they were returned to the comp
troller and cancelled. Governor, afterward
President Polk, recommended to the legisa-
ture the sale of this one million and half of
bonds, and suggested that, if they could not
be sold in the United States at par, they be
converted into sterling bonds, with the inter-
est payable IN Europe. The money derived
by the bank from this sale of bonds consti-
tuted a part OF its capital stock, from which
the State received nearly two million dol
lars as dividends. Thirty of the bonds
issued to the bank were renewed under the
act of 1873, and one hundred and eighty-one
others of them are outstanding and unpaid.
There was issued $1,188, 900 IN five per
cent. thirty-year bonds under the act Of
1878, to the Franklin and Nashville, Co.
lumbia and Pulaski, and to about seventy
other turnpike companies, In payment OF one
half of the capital stock to which the State
amount, added to that issued under the act
of 1856, and to the $4,000 issued under
the acts of 1852 and 1854 to the Carthage
and Rome, Carthage and Huntsville, and
Carthage, Alexandra and Red Sulphur turn
pike companies, amount to 81 .434, 900 grant
ed to turnpike companies, $685., 1000 of which
has been cancelled. The balance is unpaid.
Mr.. Polk, in his message to sthe legislature
in October, 1889, urged "a vigorous prosecu-
ton of judicious system of internal i'm
provements. 1t was during his term. and |
that of Governor Jones, that the bulk of the |
turnpike bonds were issued. Governor Neill |
S. Brown, in his message to the legis-
lature of 1847, characterized the issuance
of bonds under the act of 1878 as |
'tindiscriminate. Two years before that, |
Governor James G. Jones, referring to the |
same subject, said: 81 am gratifed to know,
that in reference to the Importance of maxi |
ing ample and certain provisions to meet all |
liabilities as State, there is but one senti-
ment among our constituents. They do not |
stop to inquire into the wisdom of the origi-
nal measures out of which their Indebtedness
has grown, but require that the credit Of the
State shall be maintained. Governor Neil
s. Brown, in his message referred to, recon-
mended additional State aid to the Hiwassee
railroad and to other similar works. Cover
nor VIM Trousdale, in his message of 1849,
advised the grant of additional State aid,
and gave utterance to this sentiment, so con-
sistent with his exalted character: ''We are
bound by the highest obligations to preserve
the credit of the State invlolate and unfair
And in his message of October,
1851, he foreshadowed the system of internal
afterward adopted by the
State, by recommending that the companies
should prepare the roads for rails and Tx
lures, and then call upon the State for
aid," and to the roads that promised
good results, ''let the State loan her credit In
State bonds, payable at distant day, say
fifty years or less, drawing an interest OF six
per cent, payable semi-annually at some con-
Venient point Governor VIM. B. Camp
bell made the same recommendation, and his
successor, Governor Andrew Johnson, said In
MS message of December, 1858, that sit
should be the great and primary object of the
general assembly to bind the State together,
TNb,a 70 Shnlh hxr,- dc orr th
i'm provements, which would accomplish the
great end of making US one and the same
people," Under
THE ACT OF 1850
5hree hundred and fifty thousand dollars, in
six per cent. bonds, were issued to the East
Tennessee and Georgia railroad. The able
report made by Messrs. Nicholson, Gentry
and others, in 1866, first gave form to the
prevailing and growing opinion IN favor OF
commercial facilities. This senti-
nent continued to grow until
It was developed by the passage of the
act of 1872, providing for system OF gen.
eral internal improvements. This measure
was supported by the press, by public opin-
on, and by the leading Democrats and Wings
IF that day. Under its provisions and amend
nents the principal part of our railroad in
tebtedness was created.
The State issued for the erection of the CAP
tol 1856, 900 in bonds; about onethird of
his amount is unpaid. To the agricultural
bureau, in 1856, $4,000; one-third of this
has been cancelled. In 1856 the State
ssued $4,000 in bonds for the purchase of
he Hermitage; $4,000 of this amount has
oeen cancelled. i
AMOUNT OF THE STATE DEBT.
The debt of the State on the first of JAM
larry, 1873, amounted to $23, 212, sos. This
includes the bonded debt not due, the bonded
lebt past due, five full installments of inter-
,st, and balances of several installments not .
presented, amounting to $40, coo. The greater
part of this debt was incurred prior to 1861,
md a very large majority of the bonds were
ssued by Governor Andrew johnson and
Governor Isham &. Harris. The following
able exhibits the amount issued since the
ate war between the States, the amount can
,eled and the amount now outstanding:
81 g l z = =