The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1881-10-13

bermine internal State policy, judging from
the past, directly affecting the interests Of
the people, to degree that is not generally
appreciated. The Conservative Democratic
party has had the management Of all the
affairs Of the State since 1859, and even
before that time, until military authority
was invested with it. In 1865 the Legisla-
ture contained the best talent In the State,
and then was inaugurated the system Of
capitalizing the debt which was consum-
mated in 1871. This system has operated to
the great disadvantage of the people. 1t
has really fixed upon them, by reason
of com pound interest,the $4,000, 900 which
the Re-adjusters propose to eliminate
Their proposition. in plain English, is to
disallow the compound interest amount
which has accumulated under the various
funding bills which have been enacted by
the Legislature and to take two-thirds OF
the principal, as the proper proportion OF
the debt Virginia should assume, and calcu-
lating simple interest on it.. and giving
credit for what interest has been paid, pre-
pare tax bill to pay three per cent. inter-
est thereon. The difficulty In the way OF
the contamination Of this scheme is the
contract nature of the larger portion of the
debt. OF the bonds issued under the fund
ing bill OF 1871, there remain about $780,
900, 900 bearing six per cent. interest in the
form OF tax-receivable coupons. These
bonds have been decided by the Courts to
constitute contract, and under this deci
sion the coupons are receivable by the State
for all dues, not excepting the amount died.
icated BY the Constitution in money to the
public schools. Another funding bill was
adopted In 1879. known as the McCullocf
Bill, which proposed that the creditors
should refund their coupon six per cent
bonds, In the proportion OF two dollars o.
them to one of peeler bonds, not con.
tract, but bearing six per cent. interest. intt
| a bond bearing an average rate OF pei
cent, the bonds running forty years-or 8 PEI
cent. for ten years, per cent. for twenty
years and per cent. for ten years. Tit
bill required that $s,000,000 should b.
funded by January, 1880, in order to maxi
/ the law operative. By hook or by crook
the agents of the funding operation. ant
the commissioner Of the sinking fund, sue
ceeded In securing q fraction over thi
amount before the time specified, but Their
was no general disposition to accede to tn
terms. At the fall election Of 1879 the Re
adjusters carried the Legislature, and from
| that time to this not dollar has beel
! funded under this law. The am cunt funde'
| as thus stated. stands upon the same con
| tract ground as that fixed under the Law
| of 1871, the difference being in the rate o
| interest.
| It is proposed In che Riddlerberger bill
which recognizes about $40, DOC, 900 of debt
as principal, bearing per cent interest
| tn destroy the value Of these tax-receivabl
coupons by Issuing virtually to the tax-paye
a loan certificate. receivable for taxes. a
half it's face value, but to be receivable a
it's full value in discharge Of his tax obliga
| tions. This is to force the holders OF tn
| contract bonds to surrende them, and thi
| it is assumed will be done, because to super
cede the coupons as tax-paying agent
would destroy the market value Of tn
bonds. The trainers of tina Riddleberge
bill claim that this measure will stand tn
| test of the courts, as it was framed Ia tn
| light OF the decision Of the Supreme Coul
of the United States, In what is known q
the Tennessee case, directly app licable. q
is assumed, to the provisions of this bill.
The object of this measure is to wipe out tn
effects of ALI the funding bills from 1866 t
1878. and to eliminate all the compound inte
est charge that has been accumulated by re.
son OF the various funding laws passed BY til
Legislature, and to assume only SO niue
of the debt as would now exist had ne sue
bills been passed, and simple in terest onl
/ calculated.
The assumption of the whole debt
1865, and the arranging Of tax bill fixin
the rate of taxation at fourteen cents o
the 800. was piece Of idle vaporing-upo
the poor but proud theory, Of promising eve
rything and paying nothing. The bill Of 1877
was predicated upon huge deception an
falsehood. It was formally stated to tn
Legislature by the then Governor that tn
taxable resources of the State amounted t
$3.50, G00, 000-we believe that was tn
amount-and that fifty cents on the $40
OF this amount would yield revenues sui
ficient to pay the interest on the debt O
about $50 900, 900, including capitalized in
terest, support the public schools and carr
On the Government, and upon this assur
ance the bill became law by questionabl,
means, apart from the false statement @
the Governor as to the reso urces of tn
State. When the truth was rea ched it wa
ascertained that instead Of $730, 000, OOO
there were not over $500 ,000. 600. or les
than half of the taxable values apen whicl
the bill was based. The next Legislature
repealed this law, not, however, befor
about $40, 000, 900 had been funded under it
Of which is now constituted the $l5, 600, 00(
Of 6 per cent. tax receivable coupons, ant
a contract. The agitation growing out O
this legislation contin until 1877, wher
a Legislature was elected. opposed to thu
law Of 1871, and in 1879 the Nc Culloch bill
was passed, which proposed to eliminat'
the compound feature of the bill Of 1871, il
substituting an average rate of 4 per cent
instead of 6 per cent. in the form Of tax-re
ceivable coupons. Under this bill. as above
stated, over IS. oO0. 900 was funded in proper
ton Of two dollars as funded under the Law
Of 1871 to one of the peeler debt. bearing {
per cent. This absorbed about 81, O00. 900 Of
the coupon 6 per cent. de BIT and $1,000,
600 of the 6 per cent. peeler debt. This
legislation caused the formation Of the
Re.adjuster party, and the framing Of
the Riddleberger bill-with the bold propo-
sition to wipe out all funding bills, con-
tracts and legislation. that did not recog.
nize the simple equity of the case as pre-.
sented 10 two-thirds Of the original debt
Of the old State, and simple interest on that
amount.
This is about the history Of the Conserve.
tive Democratic party on the debt question
It will be seen that it is responsible for the
refunding bills which capitalize d interest
and exaggerated the obligations of the State
by the process OF compoundlng interest.
Neither in the legislation of 1865 nor in
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