Staunton spectator. [volume] (Staunton, Va.) 1849-1896, 1881-02-01

debt of $50, ,0OO. .OcO, including all thre
classes, would have amounted to 81 200,
600, which is just the amount that wa
being annually paid in the form of tax
receivable coupons on the $50, 600, 900 o
outstanding cOnsOl bonds. Assumin,
that the whole amount Of $50, 900, ,OO
was Just, and must ultimately be paid
with interest, this bill would have savet
annually to the State, in the form of in
terest, the handsome sum of $500, 900.
The bill, however, was Objectionable
in several particulars. In the frs
place; it gave to a Syndicate" the ex
elusive right of funding the bonds. Th'
holders of both classes of bonds in tn,
proportion required for funding coult
not go to the Auditors Office directly ant
have them,funded on their own account
but could approach the government only
through the Syndicate" to whom they
were compelled to pay tribute. The
bill operated harshly also on the credi
tors of the second and third classes
who were compelled to sell or exchange
their bonds at less than one third O
their face value and then accept a re-
Educed rate of interest on this diminished
IamOunt. It is true that the bill on its
face contemplated the full and free con
sent of the creditors to the new funding
process, but I apprehend that in nine
cases out of ten it was tho poverty, and
not the will of the impoverished holder
which consented.
But still greater objection to this bill
was the impracticability of carrying il
into full effect. AS the result proved,
there were many holders of bonds of all
classes whose necessities were so great
that they were compelled to part with
them, or fund them through the ''syndi-
cate" In this way something 'over
eight millions of dollars were funded /;
but doubt, if there had been no war
made on the McCulloch bill, whether a
much larger amount would have been
funded under it. doubt it because 1
know there were many holders of "con-
sol'' bonds who were in good circum-
stances, and therefore not obliged to
sell. Many had bought bonds at a
heavy discount to use the coupons in the
payment of their taxes. For this pur-
pose the coupons were as good as money.
There was no reason. therefore, why
persons who were thus perfectly certain
of receiving interest on their bonds at
the rate of 6 per cent, should willingly
exchange them for bonds offering no
better security and bearing interest of
only 8 per cent, for ten years, and and
per cent, thereafter.
| Be this as it may, the McCulloch bill
is dead, and there is no possibility of its
being revived.
The questions then arise, What are
we to do? Are we to let matters stand
as they now are? If not, what are we
to do to rid ourselves of the difficulty,
which is operating so disastrously on
all the great interests of the State?
The public voice, from one end of the
country to the other, demands that
some prompt and efficient action shall
be taken on the subject; and the inqui-
ry is narrowed down to what that some
thing shall be.
| Is there, then, any practical solution
of this knotty problem which, while it
will save the character of the State from
the disgrace of reputation, and do full
justice to the creditors of all classes by
placing all on an equal footing and
securing payment in full to all. will eff
feet these great objects, without the
agency of a Syndicate with the full
and free assent of all parties, and with
out imposing oppressive burthens on
the people?
believe that the time has now come,
or is near at hand, when this end can
be accomplished.
| Heretofore no measure of the kind
which propose could be carried into
effect because two things. neither of
which then existed, were essential to
its success. The first was the effiux of
ten years of time from the 1st day of
| Vu11
al Improvement in the financial condi-
!ion of the country. Both are now at
hand. Some of your readers may be
disposed to inquire what has the efflux
of time and the advent of the 1st of Ju-
ly, 1881, to do with the subject? A lit
tie consideration of fact which seems
altogether to have escaped public notice
will show that it has q great deal to do
with it.
| If your readers will turn to the Code
of 1873, page 400, they will find that by
section 8 of the funding bill of 1871 it is
provided that the ''consol" bonds, with
interest bearing. coupons, are all re-
quired to bear date of 1st of July, 1871,
and that they are to become due and
payable in thirty~four years from that
date, but are redeenoble at the pleasure
Of the State after TEN YEARS FROM
THAT DATE. In other words, these
bonds are not, as generally supposed,
thirty four year bonds, but 10 "a bonds,
which the State may, if it chooses, re-
deem on the 1st of July, 1881, or at any
time thereafter, without any violation
of the letter or spirit of her contract.
This is most important fact, and yet
in all the discussions which have taken
place in regard to these ''odious consol''
bonds, in the Legislature, in the press,
and in discussions before the people,
have not observed the slightest allusion
to it. In my opinion, if our people can
be induced to act together, discarding
all mere party considerations and look
ing only to the welfare of the country,
it opens the door to an honorable, salts
factory, and practicable settlement OF
our difficulties without entailing serious
burthens on the taxpayers.
Let us now consider the mode in
which it can be effected.
| 1t Is obvions that if the State can re-
establish her credit on a sufficiently
firm basis to be able to "f1oat" debt OF
thirty millions of non,taxable per
cent. bonds, the whole matter could be
settled at once as she would have the
means of paying off all her present OBJ
legations, including her per cent.
''consol" bonds which, as have shown,
she has, according to the terms of the
bonds themselves, the unquestionable
right to redeem on and after the 1st OF
July, 1881. But it is equally clear that
it will not be necessary to "f1oat' loan
to the full extent of thirty millions Of
dollars. The holders of the ck.sses OF
bonds known as the ''peelers," and the
remnant of old unfunded bonds, which
together amount to about ten millions,
will gladly accept non taxable bonds OF
the new issue in exchange for their old
bonds, as they would be large gamers
by the operation, and partial, though
somewhat tardy, reparation would there
by be made to them for the wrong which
they have been compelled to endure
This would dispose of those two classes
OF bonds in an equitable manner. and
would leave only the twenty millions o1