Public ledger. [volume] (Memphis, Tenn.) 1865-1893, 1879-04-14
GEORGIA's CURRENCY BONDS"
Four Per Cents to Refund Seven Per
cents---SuCCess Of the New Scheme
---Fears that the Funding Epi-
demiC win Spread.

Washington Special to New York Herald.l
The State of Georgia has begun
curious refunding operation of its
own. The legislature authorized last
December the issue of coupon bonds
Of the denominations of FIVE and ten
dollars, bearing four per cent. interest
and having six years to run, to be sold
at par, the proceeds to be used in re-
deeming outstanding seven and eight
per cent. bonds falling due. Some of
these bonds have been sent here.
They took at first sight somewhat like
greenbacks. Each five dollar note has
i've coupons attached to it, which bear
the inscription The State of Geor-
gla, due the bearer twenty cents, Jan
uary |, the series running from 1880
to 1885. The face of the bill cites the
authority of the act of the legisla-
ture, and makes the bill redeemable
at the State treasury at Atlanta on the
LIST of January, 1885, or sooner, at the
pleasure of the State, and the coupons
payable at Athens, Atlanta, Augusta,
Columbus, Macon, Savannah, Rome,
Americus, Albany or LaGrange. Sen
ator Gordon says that the entire pur-
pose Of these four per cent. bearing
notes is to refund the present seven
per cent, bonds of the State which
are falling due. 1t seems to be re-
garded by Georgians as popular loan,
and they say it is quite successful and
that the sO-called bonds are selling as
fast as the State treasurer needs to sell
them to take up the old bonds. 1t is
said that a decision of the treasury
department relieves them from tax
under the banking law, and that their
form and purpose will take them out
of the category of bills of credit, ("
which the constitution forbids the
State to issue.
1t appears that the success, so far,
of this experiment has attracted at
tention in several other Southern
States, and that the example of Geor-
gia is likely to have followers. But
unless the bonds of State are largely
held by its citizens and residents,
which is believed to be the case in
Georgia, such device could scarcely
succeed for bondholders in other
States and abroad would have no use
tor these treasury notes, and the act
prescribes that they shall be sold or
exchanged at par The new bonds, so
called, are not payable for dues to or
by the State, and, of course, are not a
legal tender for private debts {;
and while they are in a shape
which makes them convenient as
a circulatingmedium or currency, their
effect, it would seem, can hardly be
more than to make it temptingly con
venient for holders of Georgia securi
ties to spend their money. A citizen
Of Georgia who owns thousand dollar
seven or eight per cent. Georgia bond
may sell it or borrow on it, but if he
exchanges it for two hundred of these
new four per cent. e-dollar bonds he
can more easily spend it for drinks, -
and that seems to be about all there is
of it.
In 1867 Alabama issued certif-
Gates, which were notes of small
denominations receivable for ell dues
to the State. These we're, of course,
bills of credit, and the comptroller of
the currency called attention at the
time to this fact, and to the decision
of the Supreme Court in the case of
BriScoe VS.. the Bank of Kentucky,
that note of circulation " issued by
a State, involving the faith of the
State and designed to circulate as
money on the credit of the State in
the ordinary course Of business, " is a
bill of credit in the sense of the con-
stitution, and that other decisions of
the Court have settled that certif
Gates issued by a State in sums not
exceeding $40 nor less than fifty cents,
receivable in payment of taxes, the
faith and credit of the country being
pledged for their redemption, are bills
Of credit within the prohibition OF
the constitution. " But it is not be-
lieved that these Georgia " bonds y
come under this prohibition, for they
are not made receivable for taxes OF
other dues. They bear interest, and
they are in all respects bonds, except
in shape, size and denomination.