The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1881-01-27
An Important How it viii
Affect Re-Adiustmant

guage: without the consent Of the cred-
tors there can be no settlement of the delft
question. The adoption of the Ridllcbergtr
Bill could not compel the h ,lders of the CON
sol bonds to relinquish the advantages they
hold. Even should the Supreme Court OF the
State be changed and the decision in the An
toni Wright case reversed by that body. the
Supreme Court of the United States would
still hold that the contract under which the
tax-receiyable coupons were issued was invio-
liable, and no legislative expedient could i'm
pair its power and effect" On Tuesday of
this week the correctness of this assumption
was fully sustained in a decision by the SUI
preme Court of the United States. The case
of Hartman VS.. Greenhow, involving the right
of the State of Virginia to levy tax on the
coupons, to be deducted from them when they
are presented for payment, was decided in IA
vor OF the bondholders. These coupons were
the result OF the Funding Bill of 1871 and are
attached to the bonds representing the $780,
100000 of debt funded under that act. The
Supreme Court Room, on Tuesday, was
crowded with members of Congress and Sena-
tors, and large number of interested specta-
tors from Virginia, Baltimore, New York and
other places. In delivering the opinion, Judge
Field paid a very high compliment to the de-
cision rendered by the Court of Appeals of
Virginia, in the Antou- Wright case, and pro-
nounced it one of the abest judicial papers
of record. The history of the case which
was before the United States Supreme Court
ind determined on the gath, is as follows:
The Court of Appeals Of Virginia being
squally divided on the question, Judges Chris
tian and Anderson maintaining that the State
could not tax the coupons, because it would
Ne violating the contract entered into between
the State and her creditors in the Funding
Bill of 1871, and Judges Staples and Burks
holding the reverse view-Judge Burks, how
yer, as we understand, only toleraing this
view, in order 10 get it before the Supreme
Court of the United States and have the qles-
ton passed on by that boly-the case was
carried to this last named tribunal by writ of
| error, the application before the Virginia
Court being tor a mandamus To compel the
oeutC w lClCtFC III Vi CIT ItCc
| fhe Baltimore Sun summarizes the case as fol-
.ows: The 81, pre- ne Court holds thlt the
,.'upons are not taxable. The law ptssel by
he Virginia Legislature in 1874 taxing the
state bonds is declared TO I've demonstrations
ind void because it is in violation of the con-
rslct between the State and her bondholders.
TO make the matter clear it may be of inter
| est, at this time to review the history of the
contest that has been going on in Virginia
since the close of the war over the question
If the State debt. In 1871 the entire debt oil
| Virginia, principal and interest, amounted to
| lbOut $45. 100000, of which some Pl5 100000
was overdue interest. In that year the Leg
stature, facing boldly the situation, under
took to make some provision for the debt
1t relegated the payment of one-third of the
debt to the State of West Virginia as the
proper proportion which that State, carved
out of Old Virginia, was entitled to provide
for. The Legislature next proceeded to make
IN arrangement with the crt ditors of the
thirds of the debt. To accomplish this il
| passed what is known as the Funding Bill
This act capitalized all the overdue interest
making the debt $45,O00.O00, and proposed to
the creditors that if they would surrender the
States old bonds she would issue them her
new bonds for two-thrds of the amount and
give them certificate of West Virgiuia's in,
| lebtedness for the other third. As an induce
ment to the creditors to release this third, the
law provided that the new bonds should bear
interest at the rate of six per cent, to run for
thirty-iour years, and that the interest prom
ised should be put in the form of coupons, re-
ceivable for all "taxes, debts, demands and
dues due to the State" In this way the lar
ger portion of the States bonds bearing six
per cent. interest, with tax-receivable coupons,
were put out. When the Funding Bill had
proceeded to this point new Legislature
assembled and repealed the law, so as to pre-
| vent the issuing of any more bonds with tax
| receivable coupons attached, allowing the
| funding to proceed in all other respects. The
| same Legislature also passed law forbddng
the collectors of the revenue 10 receive the
coupons in payment of taxes, but the Supreme
Court of Appeals of the State declared the
law to be in violation ola contract, and, there
fore, unconstitutional and void In 1874 til,
Legisla' ure passed an act levying IA tax on the
)onds, 10 be deducted from the coupon when
presented for payment. or when passed to the
tax collector in payment Of taxes. Uon the
question of the Gonstitutionalityo of this law tn,
Court Of Appeals was divided The case was
then carried to the Supreme Court of the
United States by writ of error, and WAS there
irgued in December last The d csion, rs VT.
nave already stated. was rem Tered Tues lay
1t reverses the ju lgnent OF the Court
Appeals of Virginia. AMI declares that the
act of 1874, imposing d tax on the bonds
and torbidding tax coll ctors To receive the
coupons at their full face value in payment If
taxes is unconstitutional and void, tor the rr,-
son that il irppars the obligation of II con
tract. All those bonlhotlers, therefore, wno
came in and surrendered their old bonds and
took in exchange the new bonds provided for
by the funding act, have not only had the va
lidiiy of those bonds affirmed by the Supreme
Court of Appeals OF Virginia, but have now
the further:decision ofthe Supreme Court oflhe
United States that they are not taxable. The
question of the success ofany possible scheme Of
REIMBURSEMENT, 30 far as these funder bonds are
concerned, except by consent of the holders of
the bonds, would seem to be set at rest by
these various decisions"
This summary is not strictly correct, as the
question of taxing the bonds was not before
the Court. 1t was the right of the State to
tax the coupons, separated from the bonds. But
we think when the right of the State to tax
her own obligations shall be at issue, the prn
ciple asserted by the Court will be equally APP
plcable in that case, as in the one just de-
cided
1t is very clear that no such expedients as
the Barbour or the Riidleberger Bill will serve
the purpose of settling the debt question, and
that any further discussion or agitation of
either of these measures will be so much wor
ry and annoyance to the people for nothing.
There must be an understanding with the
creditors, and this it will be difficult to get,
because of the course heretofore pursued to-
ward them IT is certainly irnnOrtant that tho