Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-01-19

public creditors.
But, in fact, all of this debt except $751;, |
10000 was the debt of the two delinquent
railroad companies, and as other roads with
equal debt and less business facilities con-
tinued to pay their interest, 1t Is obvious
the delinquency was but partial and tenn
porary.
The debt recited cemprehends the entire
liability ofthe State existing at the tune,
both primary and secondary, except con-
tingent liability as endorser upon the bonds
of certain railroad companies, amounting TO-
1920, 100000.
1t appears, therefore, that when the war
beran. The public debt was not only no
burden upon the tax payers, but, on the
contrary, the investments made by the
State contributed largely TO alleviate the
burden of taxation for the ordinary pur-
poses of government.
: The credit of the State had been so
cautiously extended to the railroad cempa-
MES that the possibility of loss was remote
The internal improvement act OF l05I-2,
with its subsequent amendments, not only
provided abundant indemnity for the State,
if faithfully adhered to, but it made the
perpetration of fraud upon the State impos-
sibie. The cost of the railroads of the State
was estimated to be from twenty-slx to
twenty seven thousand dollars per mile.
The law limited the amount for which the
State could become surety for the company
to about Sll 100000 per mile for all purpo,-
ses.with a lien upon the whole property ana
its usufruct for its indemnity. Nor was ald
in anv case to be extended until the road
was so far completed as to insure compile
ton bv the application of the amount guar
anteed by the State, and to the end that the
road. when completed, should be OF such
value as to afford unquestionable lndemnl-
tv to the State and protection to the TAX
navers. the sale of a,bond under Its par value
was prohibited, and the actual aPpilca-
tiop of the whole proceeds of the bonds to
the sole purpose prescribed by law was d.
rectlv enioined. By positive provision OF
the law the power to issue bonds, with when
the Governor was clothed, was made condl-
tionaI. and those conditions were
LIST. That there was stock subscribed sutfl-
cient in amount and solvency to grade and
bridge the whole road.
ID. That given number of miles were
completed.
Sd. That there was no other lien upon
| the road.
4th. That the bonds were to be excLu-
sively applied to the purposes prescribed.
! 9Th. That the bonds were not to be sold
for less than their par value.
| The law prescribed that all of these pre-
cedent conditions should be made to appear
TO the Governor by the afhdavits OF certain
officers of the Company, by q resolution OF
the Board of Directors, and by the atfidaVlts
of an Engineer and Commissioner, each
appointed bv the State. When all of these
conditions were shown to exist in the mode
prescribed bv law, then, and not till then
did the Governor have power to issue the
bonds. To protect the taxpayers against
fraud and negligence, the original Aci
prescribed that its limitations and condl'
tons should be notice to al.
The geographical position of TENNESSEE
made her soil the theatre of active military
operations from the beginning to-the close
Of the war. The blight of war which tel
upon Tennessee is without parallel in mod
ern times. For years her Courts were closed
her laws abrogated; her people LETT wlthou
protection; the arts of peace abandoned
and her accumulated wealth, banking cap
ital and currency nnihilated-hcenset
murder, arson, robbery and pillage hlled tn
land with terroE, want and suffering. Tn
general Government seized and approprl
= ated to its use the crops and stock OF tn
non-combatant citizens without compensa-
ton, Itoccupied and used all the prOpert
BELONGING to the State, and all upon whlcl
! it had lien for the security of public cred
itors. 1t made the State Capitol mllItar
: fortress. 1t converted the Asylum and Uni
versitv bulldogs into military hospitals AM
barracks. and wsntonly destroying part @
, them. it seriously damaged them all. |
filled the Penitentiary with It's prisoners
1t DESTROYED the turnpike and plank road
in It's military use. 1t stripped the branc
, railroads of their iron, and appropriated
I to its own use. 1t operated the main line
= of railroads from the beginning OF 1862
the close of 1865, and appropriated all c
; the profits. 1t took from the State tn
r banking power which had been so prOfta
bic to it, and bestowed it upon It's ow
bondholder.
With a debt to provide for at the close
the war, and every source of revenue de
l stroyed save that of a direct tax upon tn
I impoverished citizens of the State, the stu
). alton was perplexing, but by no means de-
perate.
: The annual interest for which the tax
payer had to provide upon the State del
t proper, for bonds loaned the Agriculture
e Bureau and turnpike and plank road com
panies was $2ll ,456.00. The coin asset
of the Bank of Tennessee converted int
National bonds yielded an annual intereS
} of $40, 1925, which reduced the amount
: be raised by taxation to $l66,324.75. l
n addition to this indebtedness the State ha
= issued bonds to eight railroads, which ulti
n mately proved insolvent, amounting to 81
428, 10000. Ali of these roads which Ina
l. not been stripped of their iron, were wort
e the amount of the bonds issued them, 6
e the iron was low when purchased, and ha
II largely enhanced in price. If these roaC
a had then been sold. and the proceeds turne
over to the holders of the bonds issued I
d them, with the claim on the Governmel
't for the iron appropriated, it is clear TIL
these bonds could have been thus fully pal
e But if it be assumed that the insolvel
Of roads were worth no more than one half Il
debt, the annual interest for which the ia.
l. payers would have been required to mai
1t provision, would not have exceeded $500
10000, an amount which they could hay
IS met without serious difficulty.
IS All of the balance of the public deb
e was the primary debt of solvent companie
e then and now able to meet it.
st But, unfortunately, with the return
peace, the Government Of Tennessee W;
n not restored to the tax payers. The fir