The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1879-11-20
q IFron, one New York An,erisst rxchseEe.l Il
FINANCIAL QUESTION: lsR itTEsE q !
views Of nr. rHrah sIeeui'oe''st

FINANCIaL QUESTION: HID ftTEs E Ess y
views OF MIR. Haah sIceuiioeiss
TaE DEBT OF yIRGINlA--CoNDITIoN o.
THERETuNprSso ERATloNs-PRosPEcs
pr THE REPEAL or THE PRESENT SET
rLEMENr-THg QUESTION OF RETIRING
THE GREENBAc11oP INToE is KEGARi
TO Br-MGrALLIsM. 4
IN an interview with an american III
change reporter recently, the Hon. Hugl
NcCnlIoch, ex.Secretary OF the Treasury
and now president OF the Funding Asso
citation Of the United States, gave his view!
OF the condition OF refundiug operations II
Virginia, the prospect OF the new Legisia
ture attempting to set aside the last settie
mens, and the effect which the success o.
the Read usters would have upon the pros
perity OF the State. He also touched orien|
upon the question OF the cancellation o. tnt
United States notes, and defined bis views
Of bI.metallism. .-.
yrRGrNIA's REBUILDING ACTS. s-.fs
HWbat is the present condition OF the
aaht of- VIRGINIA aDdltfe state. OF the re-
snndine operations ?" was first asked.
1.-The present recognized debt OF the
States Mr.. McCulloch said, ais about 800.
oo0. 600. AZ the close Of the war the debt
was inward OF S40,000,000. on which the
state undertook to pay the interest, but as
The neopIe were unable to bear 80 large q
hurden. the State soon defaulted In the pay
ment of the interest on her bonds. In 1871
fine Legislature passeda law authorizing the
issue Of new bonds for two thirds OF the
Dr;ncinal and interest OF the outstanding
bonds. and certificates for the other one
Ethird. which were intended to represent the
amoupt of the debt which the people OF Vir-
oinia thought should be assumed by the
State OF West Virginia, the latter State nav.
inc been part OF Virginia when the oeDt
was contracted.
UThe bonds authorized TO be issued un-
dor this act were to bear per cent. inter.
asT--tbe same rate as the old bondS-and the
commons were made receivable for taxes and
other State revenues. Under this act about
500. 00O. 900 bonds had been funded, when
the Legislature repealed the provision
which made the coupons receivable Tor
taxes. and the recognized debt stood at Inc
time OF this repeal at S20,0C0,000 OF funded
bonds, the coupons OF which were recelva-
Bile for taxes and other State dues, and SlO,'
000. 900 unfunded bonds. Some OF these
upfunded bonds were from time to time eN'
changed for the 6 per cent. oonas,
the coupons OF which were not recelVa-
able for taxes, and certificates for the part
which was to be charged against west VIZ
ginia-that is, two thirds in new bonds,
and one third in the West Virginia certlh-
Gates. Some Of these unfunded bonds
were not thus exchanged, and cobsidera-
BILE amount is still outstanding. AT the
commencement of the last session Of The
Legislature The debt stood substantially at
500. OOO. 900 Of cousols, with taX-recelVable
commons. and S1O,OO0,000 of what are
known as "peelers" and unfundeG
bonds-the peeers being the bonds which
were funded after the repeal OF the provl-
sion authorizing the issue OF bonds with
their coupons receivable for taxes.
THE TAx-REcEIvABLE COUPONS.
ION the bonds which were funded un-
der the act OF 1871, after the repeal OF the
nroyislou referred to, and on the unfunded
bonds, no interest has been paid. After
the reDcal Of the provision making the cou-
mons oi the new bonds receivable for taxes
revenue officers were instructed not to re-
ceiye in pasment of taxes or other public
dues the coupons which upon their face
were made receivable for them; but the
Supreme Court of Virginia, in test case,
decided that the law under which the
bonds were issued was q contract which
could not be annulIed by the State, aud that
these coupons must be received for taxes
and other public dues. Such was the con-
dition of the debt when the Legislature
took up the consideration Of it last winter.
On two thirds OF the debt the State was
paving, in receiving the coupons for taxes
and other public dues, 6 per cent. interest ;
on tine other one third nothing. The hold
ers of the taX-receivable coupons had not,
unless they were taxpayers, been receiving
the full 6 per cent; for as the coupons
were onlv available in the hands Of tax
nayers, their market price rarely exceeded
6 per cent. ....
cit was under these circumstances that
the interests OF the State, as we'll as those
of the bondholders, required settlement
OF the entire debt on a basis which the
State would be able to sustain, and which
should be as equitable to the two classes OF
bondholders as their relations to each
other would admit. Such settlement in
the interest of the State and OF her credit
ors the Funding Association OF New YORK
and tue Council OF Foreign Bondholders OF
London undertook to make. The Legisla.
ture at its session, after the fullest discus
sion, and after the bill which was first pre-
sented had been so changed as to render
the State enthusiastically able to meet its
requirements, passed the funding act, the
repea of which is to he attempted ut the
next session of the Legislature.
"By this act" continued MIR. McCulloch
" the rate Of interest on all the bonds to be
issued under it was reduced from pei
cent. to per cent. for ten years, per cent
for the succeeding twenty years, and pei
cent. for ten years Notwithstanding the
average rate Slightly under per cent. fol-
the time the bonds had to run-the coupons
TO be receivable for all public dues, and en-
empt from State, county, and municipal
taxation. On the overdue interest on the
unfunded and 'peelcr' bonds so per cent.
only was to be paid in the new bonds. To
| make the act effective, and 10 reconcile as
far as might be practicable the interests OF
the two classes-the secured and uuSe-
cured bondholders-it was provided that
while the exchange OF bonds should
be made dollar for dollar, the amount
OF unfunded and 'peeler' bonds to
be refunded should never exceed one
third OF the amount Of bonds outstanding
until S1S,000,000 bonds, the coupons Of
which were receivable for taxes, had been
retired. In executing the law the Fund
ing Association and the Council Of Foreign
Bondholders have given the new bonds at
the rate Of three for two bonds with taX-re-
ceivable coupons and one bond, the cou-
pons OF which were not so receivable.