Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1879-03-11
PARIS, March 4. 1879.

PARIS, March 4. 1879.
Colonel ]. B. Lamb:
DEAR SIR-It is not true that the condi-
ton Of the State of Tennessee is desperate.
Other States of the Union have, at different
periods Of their history, sustained greater dit
fculties, have suffered more financial blum
ders and Encouragement, and have regalned
the prosperity natural to State that is faith
full to its obligation. An adherence to the
policy of nen-action means sacrifice OF our
best interests. | cannot believe that the peO-
| pie of Tennessee mean to submit to it, or that
they will longer be intimidated, or beguiled
into silence, when their good name IS the
stake. | will answer your questions with the
utmost brevlty. 'How are we to pay cur
public debt, and how does the condition OF
| Tennessee compare with that of other States
that have been similarly burdened, and that
have subsequently paid or adjusted their
| debts?" To the first question l answer that
no financial wisdom can devise an easy way
of paying debt; and, of course, 1T Is well
understood that the debt of the State, If ever
settled, must be paid by the Taxpayers, our
creditors Will tighten the burden with an
abatement that brings the debt within our
control, and all that legislative wisdom can
now do, to make the burden still lighter, Is
to distribute its payment through a series ct
years, and t. provide that all the property OF
the State, liable to taxation, shall be uncov-
cred and made to bear part OF 1T. 10 the
next question | submit
STATEMENT OF THE DEBT OF MARYLAND.
This State began the issue of bonds in
1927; in most cases to pay subscription to
stock taken by it in various public works.
Up to 1858, bonds to the amount of $1,7l9,00
were authorized; up to and including 1888,
| SIS, 500, 600 more were authorized. Ia 1886
and 1887, S., 786, 667 were authorized, and
In 1888, $3,125, 600 more, making a total Of
SIC, 130,667. In l841 the State made default
in the payment Of interest, and continued In
default (some portion OF 1t continuing to be
paid) until January l, 1913, when 1t resumed
on all its Indebtedness. The act providing
for resumption was passed in February, 1S47.
At the time of resumption the overdue inter-
| est amounted to the sum OF 81, ,O53. This
was funded into six per cent. bonds, payable
at the pleasure Of the State. AT the time of
the default the amount of bonds outstanding
was as follows:
On account Of the Baltimore and Ohio
On account of the Chesapeake and 80
On account Of the Baltimore and sus- 49,
Quehana railroad. Observation-Disclosures. 2,1S3,O00
On account tof the Tidewater canal. 100000
Miscellaneous. 9l4,6I2
Total SI5,O95, 342
The interest on the bonds averaged nearly
| So per cent. The funding of the overdue
interest increased the total Indebtedness of
the State to something near Fl6,OOO,O 600. OF
the investments, that in the Baltimore and
Ohio railroad proved, In the end, to be good.
Something may in the end be realized from
the Baltimore and Susquebanna railroad,
and from the tidewater canal nothing, how
ever, for d considerable period. The current
charges for interest In 1913, the year the
State resumed, equalled S26, $50. They were
not much less for several succeeding years.
In addition to the payments of the interest,
the State paid off, from the proceeds of tax
alton, nearly $l,00O,000 Of It's funding PER
cent. bonds within a period of nearly three
years from 1913. Since 1S4S the State has
promptly met the interest charges and the
principal OF its bonds as it fell due. 1t did
not ask its creditors to make any other con-
cession than to fund their interest coupons
into per cent. bonds. At one time the
bonds sold at very low figures. The State,
including the interest accounts. lost con-
slderably more than two thirds of all its
investments in its public works. That on
the Chesapeake and Ohio canal, which was
represented by stock, was wholly lost. Large
losses were made on all the enterprises the
State attempted to aid but the Baltimore and
Ohio. For time the stock taken in this
was unproductiVe, the State in the meantime
paying interest on its bonds issued therefor.
OF the whole amount invested by the state
in this road, 1t received about $3,OO0,O00 of
the bonds of the company on which the lat
ter paid interest. From the time of the adj
justnent, no State has had higher credit or
more prosperous career than Maryland. The
settlement reflected the highest credit on
the State. Population of the State IN 1880,
equalled 400 in 1910, 583, 600; popula-
ii0u IN 1870, 7S0,894, little more than half
of that of Tennessee. | give also statement
in relation to
THE PUBLIC DEBT OF PENNSYLVANIA.
In 1926 the State of Pennsylvania entered
upon the cont truction of an extensive system
of public works, which were steadily prose-
cuted till February l, 1912, when the State
became embarrassed and suspended the pay
ment of interest on her public debt. This
amounted, at the time, to S37 ,066, 743; of
this sum $50, l73, 764 was tor public works.
The rate of interest on the Indebtedness of
the State averaged FIVE per cent, the
amount to be paid equaling about 81 $4,000
annually. The debt first authorized was
100000, in 1926, for the Pennsylvania ca
nal. From that date the increase of the
debt averaged over $2.000,000 annually.
February l, 1915. At that time her debt
amounted to $40, 1886, 1893, of which $4,441,-
800 was fer overdue interest, which was fund
ed into a short SIX per cent. bond. The
amount of interest to be paid annually ex-
ceeded $4,000. 900, nearly the whole OF 4
Which, llGu 10 Do IdlSGu CdAdLlOD; GDG puO-
lie works producing revenue not much ex-
ceedIag the cost OF their maintenance. The
revenue Of the main line from PHILADELPHIA
to Plttsburg, made up of the Columbia rail |
road, the canal, and the railroad over the |
mountains, from 1885 to 1874 inclusive q ne
Rod covering that during which the State was |
IN default, was 81, 574 ,995. The average net |
income for the ten years equaled $249, 720. |
This is all that the State had to show for its |
immense outlay, the other works, taken to-
gether, not paying the cost of their mainte- |
nance. So soon as the uses and value of |
railways were seen, the State, although she |
was owing over SAC, 900, 900, on account of |
her public works, chiefly canals, freely and |
wisely granted charters to railroads which |
were to sU Sersede and render the former al
most entirely valueless. Finding her works
a burden, and herself incapable of their
management, the State, IN l843, virtually
gave away the Beaver and Franklin canals |
and their laterals, turning these over to a pri-
vate company, on the condition of their COM
pletion and maintenance. These works cost
the State in addition to interest 81, 533 29I.
They have long since been abandoned by the
private company to which they were turned
over. In 1857 the State sold the main line
from Philadelphia to Pittsburg to the PENN
sylvania railroad company for the sum of
$500, GOO. payable in the bonds of the lat
ter. La 1858 the State sold to the Sunburv
and Erie-now the Philadelphia and Erie.
railroad company, the Delaware and the
North and West Branch canals with their
lateraIs for s., 500, coo, payable in the bonds
of the company. By this act the State dis
charged herself fully from her public works.
after having spent the principal sum of about
$40, 600, 600, and far larger sum In interest |
The total amount received On their sale was
81 900 900, for which the State, in PRINCIPAL
and interest, had paid probably 100000 600.
The incidental advantages resulting from the
construction of the Stale canals was verv
slight, as they were speedily superseded by
railroads and abandoned The only conces.
sion the State ever asked from her creditors