New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-02-05
THE DEBT OF VIRGINIA.
A LETTER FROM HUGH McCULLoCH.

AND WHERE THE RESPONSIBILITY MUST REST.
To ne Editor Of The Tribune.
SIR: The facts IN regard TO the debt of irgina
its nature amount the ability Of the state to pay the
interest thereon and the various acts that have been
passed to effect settlement with her creditors
fully understood by those who are interested,
either as citizens or claimants, that l should not
think it necessary for me although have been the
"best abused man." that ever had anything to do
with Virginia affairsl to say word UPON the sub
ject. if the persistent Misrepresentation of the
party of which General Malone is the acknowledged
leader were not creating opinion among many
far-minded men that under the Act Of 1879, injus-
ice had been done both TO the State and the bond
holders. and that the Readjusters they call them
selves. are debt-payers and not repudiators.
The debt of Virginia is an ante war debt. The
bonds. which represented 1t, sold at par or at
premium, chiefly In England. when the State had
high credit and the proceeds thereof were expended
in improvements almost entirely within her present
DOMAIN and which added largely to her wealth. Up
to the time of the attempted secession of the State
the interest on her bonds was promptly paid. Dur
ing the war and for years after payments were
suspended; through which long period the bond
holders having confidence in the honor of Yirgnians.
waited patiently for resumption. Nothing was done.
however, if have not been misinformed until 1871,
when the first funding act passed, by which the
bondho6ers offered in exchange for their bonds
and interest bonds bearing the same rate OF In
terest Is per cent for twO-hrds OF the amount ana
certificates to he paid by the Stateo West Virginia,
for the other one-third. AS the bondhoders had
patiently waited for the of the State for so
MANY years. q compromise that only offered two
bonds for three-the certificates to he paid by West
Virginia beng considered of little, If any, value
they have never. i'll fact. been recognized by that
Int
the State was sovereign and had suffered severely
by the war, and as the new bonds were to
be secured by coupons which were to be re-
ceivable for taxes the compromise accepted
and exchanges were rapidly made. until the next
meeting OF the legislature when the provision OF
the act which made the coupons OF the new bonds
receivable for taxes was repealed. AT the time OF
the repeal of this provision about twothirds of the
outstanding bonds had been eXchanged-1nd cx
changes rapidly gong On-large amounts being
at Richmond and on their way from Europe. |
speak advisrdly when say that no act of any State
Legislature up 10 that time. was ever regarded "a
beng so urJu>t and shameful this act of the Vr
gina Legislature, which violated compromise ten
dered to the bundhoders and gave to those who had
exchanged their bonds dccidrd advantage over
those who had not. The new bonds, the coupons Of
which are receivable for taxes, are now known as
"Consols the rest As " PeeleIs"
Immediately after the passage Of the act repeal
ing the provision referred to- the tax collectors We're
instructed not TO the lax receivable coupons
for taxes, but the Supreme Court OF the State an
nned these Instructions by deciding that the COM
promise between the State and the bond
holders as far a. it had been carried out. was
contract which, under the Constitution Of the
United States. could MOI be violated.
Thus matters stool until the passage of the Act of
1879. The State paid the coupons Of the CouSol
bonds by receiving them IN payment Of taxes, but
a. they We're available only 10 taxpayers the bond
holders were under the necessity OF selling At DIS
count Of from 10 To - per cent. thus realizing
something over 3 per cent N their per cent
bonds-t g difference being absorbed bv taxpayers
and middlemen On the Pecler bonds nothing was
paid. The situation was, therefore, unpr0iitaD'e
and di>honOra be ~ far A. the State concerned.
and altoc her unsatisfactory TO the bondhoidrrs.
especially TO those for whom nothing was being
done.
Mr. M'CUILoCH'- CONNFCTION WITH THE DEBT.
| may say mere that my connection with the
Virginia deb oil NOT. as General Nahonc intmatrs.
commence in iii" WIN cr of 1s7S-'79 In the summer
of 1S74 happcnIng to be in the United states,
went al the rrulrst o. the council of foreign bond
holders to Rchmond, to confer with the officers of
the state IN behalf OF the holders Of the PcclcI
bonds, and to ohtan from them. # II should he pos
sihle 4 pr position for settlement. found cover
ror Kcmp,r aud the other OH I!s scnsltivrly alive
TO HE Injustice winch these bundhodrre WIRE "iiirr-
ing and an os 10 remove the dSrepute that rested
upon the state; but they could not speak Tor the
LEGISLATURE, and could NOT peak authorltaiivriy
for the bondhOdcrs, nothing was ACCOMPLISHED AT
the interview Il is proper tor ne TO say. however,
that the sentiments they expressed aud the feelings
they manf, sred were entirely honorable to them.
u,1f M in @
that Just ce to the lon2,nT ring Doudh"deIs would
not long he d .lavcd. In the spring of 1870 IT 1876
| was called upon in Lon, by General Richard
TAYLOR who Informed me that. although ne was not
authorized to commit the State to anything he had
been requested by the Governor TO ascertain II anv-
thing aud wat could e done toward settlement
with the holders of the unsecured bonds, and that
he should be very glad if would AID hun III bring
ing about q conference with them. ! did
so and him. A number OF conferences were
had. at all of which 1 was present, and after
protracted discussion. G-ueral Taylor was anthor
lied by most of the large bondhoIdors to say to the
G. n ernor and the Legislature that compromise
might be effected the terms OF per cent for GER
tam number of years. and per cent thereafter for
two-thrds of their present holdings and interest the
other one-th ri TO be represented by the usual West
Virginia certificates.
Such was the proposition Of the unsecured bond
holders as nearly as | now recollect it. What be-
came of the proposition, have not been Informed
NV impression, however. is that although General
TAYLOR thought it far one he found the Legl%la-
ture. when it next convened. III such " frame oil
mind y that he did not even present 1t, and so the
State, while paying the interest on twothIrds OF her
bonds IN full, by receiving the tax receivable con-
pons for taxes, was still enduring all the odum ana
disgrace OF default and reputation. All forms OF
nph I'm OIL
nally uniform In their character but by the acts oil
has 7 aoialoture there had come to be two classes,