The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1881-02-10
All of Il.

20 the people of Virginia the
Interview of Gen. Malone with a num-
Der of gentlemen in Washington. giving
history of the debt controversy from his
and the reply OF BON }. W.
Johnston to these two papers We to-day
give the full text of the decision of the Su-
preme Court of the United States on the
question of the power of the State to tax
the coupons cut from the bonds issued I'M
der the Funding Bill of 1871, and IA state
ment from Hon. Hugh McUulloch. embrac- !
ing history Of his connection with the !
Virginia debt. 1t is proper that Mr. Nc |
Culloch should have hearing. for there is !
no man who has been more harshly criti |
cised by one faction of the Democratic party
than he. His m olives, his methods and
the ends he had in view have been arraigncd
with so much bitterness that many of the
people of Virginia had been brought to
the belief that he is second edition of
Shylock, and that his whole purpose was
to bleed not only the State but the bond
holders, and make for himself fortune out
of the misfoitunes of Virginia. a careful
reading of his communication. as taken
from the New York Tribune. will remove
this impression, and show that there are two
sides to the question with which his name
has been so prominently associated in THU
State.
The debt now stands abOmt as follows -
There are about $l5.000.000 conSol bonds,
created by the funding process under the law
of 1871 which have six per cent. taX-receiv-
able coupons attached. to meet the interest
on which it requires $500, 900 annually. The
State Treasury is charged with that much,b
the tax-paye rs do not pay that much in by
10 to Is per cent-the discount on the cou-
pons. There are SS,000,000 Of what are
known as 1910 bonds. or the issue under
the McCulloch Bill of 1879, which bear
per cent. interest for ten years, 4 for per
cent. for twenty years and per cent Tor
ten years eafter-taX-receivablec coupons
attached They are called l0-40s for the
reason that the State may redeem them il
ten years and must pay them in forty years
from the date OF issue. There are about
the act of 1871 was repealed, which repre-
sent two-thrds of the original amount just
as the consols do, but have not the taX-rc-
ceivable coupons attached. The unfunded
debt, representing the original contract
with the creditors. the holders OF which
took advantage of neither the act OF 1871
nor that of 1879, is estimated at from
$4,000, 900 TO 100000. bearing per
cent. intere st. but for which interest and
that on the peeler bonds no provision has
been made, and none OF it is being paid in
any way Taking from this unfunded deb
the one-thrd assigned to West Virginia.
and we have say Sc 000. 900 at per cent
for which Virginia is liable. This places the
Understanding debt about as follows:
s15OOoOoO consols per cent tax coupons 100000
S80O0,000 10 40 per cent tax coupons. 24uOUU
S30OOOO0 peters, per cent......-..,-..... ISuO9o
$6000000 unfunded per cent. 36uOOO
Giving an aggregate annually Of about $1.GSo00o
Ofthis 81 ,140, 900 is self-collecting. through
tax-receivable coupons-the balance, S540.-
900, is under the control Of the Legislature.
and special appropriation each year will
debt been funded under the McCuloch Bill
the annual interest charge would have been
1890, 900, but as the debt stands now it is. As
above stated, sl.6S0.O00.
In addition to this sl,GS0.000 annual in
terest charge upon the State. there is
an estimated current charge of 50 $1,000 for
the public schools, and 5000. 900. estimated.
for the support of the government; or an
aggregate annual charge against the Com
monwealth of So, 0S0, 900, as the debt now
stands. To meet this we have, under the
assessment of 1875. at 80 cents on the 500
of values, 81 800, 900, and under the est-
mated assessment of 1880 according to Gen.
Malone, 81. 100. 0OO-a deficit under the rev.
enues of 1875 of $3.50 600. or under the rev.
enues to be derived from the assessments of
1880. a deficit of $9S0,OO0. Had the fund
ing of the debt under the McCullOch Bill
been completed. the entire interest charg"
would be for the ten years the per cent.
interest charge would have to run, $780,
900, all told.
The case would then have stood
t32, 100000 at per cent 100000
$900,0O0 for the support Of government. 9UO,OJJ
100000 for public schools ................ 100000
Aggregating. 80. ..... -. :2aGOOOO
With revenues under the assess
ment of 1875. ......... So $1,000
Leaving a surplus of......... 40 OJo
This would have been the result for the
ten years the 3 per cent. interest charge
would have run. The per cent. for thu
succeeding twenty years and per cent. TO-
the succeeding ten years. could have been
easily met from the increased values Of the
Commonwealth. and it is reasonable to as
sumo, an absolute decrease in the rate of tax
alton. for we confidently expect that the
assessed values of the State will be doubled
in less than fifteen years.
There are. as it will be seen, four charac-
tiers of debt, all representing, however. OBJ
legations of equal original dignity. The
eonsol debt is beyond the reach Of the Leg
islature in any legitimate way. The deci-
Aion of the Supreme Court, published on
our first page, rivets the contract entered
into with the creditors for $4,000 900 tax
receivable coupons and the SS,000.000. 3, /
and per cent. taX-receivab}e coupons. 1t
;
any refining about the scope of the argu-
ment of the Supreme Court. 1t settles the
question of the contract feature of the
funding bills, and that settlement cannot
be shaken except with the nsent OF the
holders of the bonds issued under the con
tract. The State cannot repudiate nor
evade the payment, of both principal and
interest, eventually. without open repudia-
ton of the principal when the bonds be-
come due. 1t has the power to do with the
peelers and the old bonds as it pleases. 1t
can repudiate them, or allow them to stand
as they now are, ithout making any pro-
vision to pay the interest on them. which is
substantial reputation, or it can wipe them
out by clean, unadulterated reputation.
Mr.. McCulloch refers to the nature of the
settlement as proposed under the bill which
bears his name, and very emphatieally de-
clares that the creditors will never again
offer terms so favorable. The courts will
Al IL.