Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1878-07-18
Gov. Purter's Letter.
A History of the State Debt
How 1t was Created.
Its Present Status-HOw
1t May be Met.
EXECUTIVE OFFICE. NASHVILLE, June % 1878.
W. 2. Harrington, Esq, Edit

W. T. Harrington, Esq, Edit
or Carthage Herald:
Dear Sir-Your letter is re-
ceived. The inquiries you make
cover wide field, but | will en-
deavor to answer them with0ut
entering into too many details.
THE GERM OF THE STATE DEBT.
During the administration of
Gov. Wm. Carroll the Lcgisla-
ture Of the State passed an act,
authorizing the issuance of five
hundred 5 per cent. bonds, of one
thousand dollars each, in pay
ment Of the stock TO which the
State subscribed in the Union
Bank of Tenn. The bonds were
issued in January, 1888, and de-
livered 10 the bank and consti-
tuted the first assurance of bonds
by the State. The business of
this bank was successfully con-
Quoted, and, during its existence
paid in cash, to the State, upon
the original subscription, divi-
dends amounting to seUe9a ham
dred and thirty thousand DOL
lars. One hundred and twenty
five of these bonds are still un-
paid. In the Legislature of
1856 a plan of internal i'm
provements was inaugurated by
the passage of an act providing
for a general system. The pas
sage Of this act was recommen-
ed in a report of great power by
a committee Of which Meredith
P. Gentry, A. o. p. Nicholson,
Robertson Topp and others were
members. This act provided
that, whenever the railroad and
turnpike companies. then incor-
porated, should furnish evidence
to the Governor, that two-thirds
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 thousand dollars,
to mature in twenty-five years.
Two hundred and forty-six of
these bonds were issued-onc
hundred and nine to the La
grange & Memphis railroad;
sixty-six to the Nashville, Muir
freesboro & Shelbyville Turn
pike Company; thirty-one &c
the Gallatin Turnpike Company
and forty to the Lebanon and
Nashville Turnpike Company
More than one-third Of tins issu-
ance of bonds are unpaid. The
canvass of 1887 developed :
powerful sentiment in favor of
further State aid TO works of in.
ternal improvements. Gov. Can.
non, in his message oflhat year
referring to the aid already
granted, spoke Of its ''salutary'
influence upon the country, rec.
commended an extension III tht
system, with additional STATE
aid. At the session Of 1878
the Legislature passed the &C
to establish
A STATE BANK,
to raise a fund for internal i'm
provements, and to aid in the es
tablishment OF a system of ed
ucation. Two and a half mil
, lions of dollars, in 6 per cent
thirty-year bonds Of one thou
: sand dollars were issued to tn
e bank. One million Of the bond
r were sold at par for cash. Th
remainder were held until tn
passage Of the act in 1910, whe
they were returned to the Comp
troller and cancelled. Gov. Cal
S terwards PresidenD Polk recon
I. mended to the Legislature tn
sale Of this two millions and
: half of bonds and suggeste
!. that if they could not be sol
E. within the United States at pa
. . that they be converted int
e sterling bonds, with intere'
payable in Europe. The mono
d q derived 10y the bank from th
k, sale of bonds constituted a pa
e. e; of its capital stock from whic
Is the State received nearly tw
I'd millions of dollars as dividend
At Thirty Of the bonds issued
p the banks were renewed, und,
e. the act of 1873, and one hul
dred and eighty-one others {
A them are outstanding and unpai
IS TURNPIKE ROADS.
r. There was issued one millit
j. one hundred and eighty-eig
ns es thousand dollars in five per Gel
thirty-year bonds, under the a
its of 1873, to the Franklin
o Nashville, Columbia 81 Pula
o XII, and to about seventy 9th
turnpike companies in payne
of one-half of the capital stoc
to which the State was nc
authorized to subscribe. I'll
amount, added to that issu
under the act of 1866; and
d. the thirty-two thousand dolla