Fayetteville observer. [volume] (Fayetteville, Tenn.) 1850-1966, 1879-01-23

solvent railroad companies to buy
postwar bonds and deliver them
% the State, and for every bond
delivered 10 have The taxpayers
lGssume one OF theirs.
Attic beginning Of the session
| Of 1863 70a bill was introduced
upon, this subject and it passed
the House. Ia the. Senate there
was an andunanimous report
rejecting la,bill, and by Il .deci-
ded vote the Senate concurred in
the report. subsequently. by
some means, the bill became a.
law. But the bill that passed
was not at all that was desired
Although there had been no in
yestigation, it was believed that
the postwar bonds had been le-
| gally issued and sod, and fraud
ulently used, and therefore the
act restricted the right of ex-
change to bonds legally issued"
The postwar bonds, by reason
OF their infirmities, were greatly
I deprecated, and although there
were two grave questions in the
way Of the solvent railroad COM
PAM $, yet the speculation was so
Itemptng,they determined to take
the chances. TIE first difficulty
was that the act restricted the
right OF exchang re to bonds de
gllly issue l." The other difficult
ty was that the holders Of the
bonds issued to the several sol
: vent reals lad q lien upon all the
property and. its uPufn,ict cf the
respective roads for the payment
of the bonds, AMI it was doubt
full whether the State could defeat
their lien by legislation. The
first question the solvent railroad
C )mpa1;es determined to deci lie
for themselves; and they decided
that all the bonds were illegally
issued" and tlie report of the
rComp!roll4r shows they bought
and paid in the m }st objection
able bonds first, as they were the
cheapest, and this was done in
great part before an Investigation
was had.
This precipitate action upon
tie part of the solvent railroad
COM an S seriously embarrassed
the a ton of the Legislature, and
that embarrassment was aug
mented by a tire; tie ned military
Fgovelpment, which wasthen ask
FED for by the members IN the
lower House Of Congress from
| Tennessee.
The question as to the lien of
the bondholders is now pending
in the courts.
In 1869 the just debt for which
Rthe taxpayers had to provide was
comparatively small, while the
debt of the solvent roads was
large, but by manipulation the
lsolvent railroads undertook to
transfer their debt to the tax-pay-
ers and relieve themselves.
z Under duress from the threat
Eened overthrow of the State Gov
eminent by Federal interference,
and believing they had the abili-
Hty to provide for the payment of
the entire debt, the taxi ayers
submitted to grave wrongs which
had been done them, rather tlan
Iimperil their liberties, and sub
| ject themselves to unfiiendly
criticisms. But a debt difficult
to bear in the beginning, and
constantly augmenting by fraud
and funding, while all values
wore rapidly depreciating, be-
came at last too great for them
to bear, and they went down in
THE hopeless effort.
| At no time since the first fund
ing act have the taxpayers been
liable to pay the interest upon the
public nominal debt. An exam
nation will disclose the fact that
there was no legitimate payment
of interest before 1870. The in
terest was paid by borrowing
money, by appropriating the as
fsets of the Bank of Tennessee, by
selling bonds to raise money, and
partly by taxation.
In 1873, when the payment of
interest was resumed, it was es-
timated that the taxable proper
ty of the State would now be
$700,000,09G. In fact, it is but
a little over $200,000,O00 The
hondholders appreciate the fact
that the debt cannot be met, and
long since a compromise would
have been had, but for the fact
that the holders of the bonds of
the solvent railroads regarded
their bonds still lien upon the
roads, and until that question is
settled adversely to them, they
will never offer a compromise
within the ability of the tax-pay-
ers.
The confusion of the just debt
of the State with the questionable
and fraudulent debt, has resulted
disastrously to her interest and
reputation. There has nevr been
a time when the State was not
able and willing to.pay the inter-