New-York tribune., 1879-08-30
Nv.
FLORIDA.

The "recognized" debt OF Florida IN 1890 was
e22I 900 besides contin gent liabilities account
of railroads amounting TO several millions more
The "uurecognized" debt, amounting to $3.9OO,OoO
principal with arroarages of interest amounting 10
five or six millions more. was contracted py tne
Territory Of Florida, between 1888 and 1889 VI
this debt 81 90 900 had been incurred for frontier
defence against the Seminoles. $3,0O0.ooO lot
banks S4OO 900 for life insurance and trust COM
pany and 100000 for banks and railroads. Inis
debt has never been recognized or provided for by
the State and that fact has seriously affected tho
credit ard prosperity of Florida. The destruction
of railroads during the war threw upon the State
burden Of about 81. 900 900 on account Of contin-
gent liabilities assumed in behalf of the companies
In 1855 the total debt, exclusive of debt OF
$500, 900 contracted in aid Of the Rebellion
amounted to 81 $40, 900. In 1858 it had increased
TO 81. .556,000.
Under an act passed by the Legislature in 1870,
eight per cent bonds to the amount Of $4,OOO,OOO
were loaned to a railroad company, and tho hrs'
mortgage bonds Of the company accepted as secur-
ity 1t was asserted that these bonds were mproyl-
IDENTIFY issued by the Governor, and that they were
disposed of by agents OF the railroad company at
heavy discount. large amount OF them passed
into tho possession of foreign capitalists. The bonds
appear to hnye been issued according to law, but
the law was said to be bad one. and it has since
been decided by the Florida Supreme Court to be
unconstitutional. II there were fraud and improvi-
dence in the issue OF the bonds, still majority OF
the owners, year afterward. could have known
nothing of either No interest appears to have been
paid on these bonds by the railroad company after
January l, 1872 and the State has refused to re-
cognize ITS responsibility by paying interest The
arrearaQes of interest would thus amount January
l, 1879, to $2,24O.O 900.
Whatever may be said Of the wisdom OF the rail-
road policy OF Florida, it is to be remembered that
that polct was initiated in 1888, and that it was
continued in modified form after reconstruction
took place. in response to the almost unanimous de-
mand Of both political parties 1t was asserted too.
with show OF reason, by the Governor in his mes
sage for 1871, that the modified policy adopted by
the Republicans was relief to the State which had
paid out on account Of railroads in land grants and
interest, about So 800 900 before the For this
investment the State had nothing to show except a
bonded indebtedness OF 81, 100000.
Whatever may be said about the improvident
issue of bonds after the war; 1t is certain that those
bonds bear on their face the promise of Florida to
pay. The present holders Of them were guilty OF
no fraud. They bought the bonds because the faith
of the State OF Florida was pledged for their pay
ment. The State has successfully defended its
claim to lien on the railroads. as trustee for the
bondholders, and there Is shadowy prospect that
they may In some distant future recover some part
of their investment. But capitalists especially In
Europe viii hereafter be very shy of Floridas prom
ises to pay.
(1rticIes on the debts Of the remaining SoutherH
States ,pH olIoW rapidly IN subsequent Issues Of THE
TRIBUNE.J