The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1881-01-23

Several abortive attempts have been made
by the General Assembly to settle ~, but 10
still weighs, like nightmare. on the Conn.,
monwealth. obstruciing her advance IN me
path Of progress which lies before her. FL
nally, politicians have seized on IL as
means Of gaining Office and influence. The
intrinsic difficulties which encompass the
subject have thus been augmented by me
addition OF Others OF partisan cbaracter.
In nv Judgment, this is greatly 10 be re-
gretted. The question il one OF business
nature. As such, IL ought to be discussed
considered. and acted on in calm spirit,
and oil business principles. 80,
No intelligent aud foir.minded man VIII
depy that the State OF Virginia owes, IN
round numbers, about thirty-two millions
OF dollars. Nor will any one deny that tne
debt was legitimateIy contracted, or that
the State received foil value for every dol
lar which she owes. This has been virtually
admitted over and over again by successive
Legislatures and Governors, and has been
affirmed by the solemn Judgment OF our
own Supreme Court OF Appeals.
think, then, may safely assume these
facts TO be established beyond all contro-
vcrsy. -,
Another great fact is also equally well
settled-yiz., that by the results OF the war
the taxable property OF the State has been
reduced nearly one half since the debt was
contracted.
This latter fact, while it may furnish a
basis for an appeal to the clemency and In.
diligence OF the creditors OF the State, can
not 10 anywise affect the legal rights OF the
bondh0lders, because they were IN no way
responsible for the consequences OF the war,
which was declared, doubtless, In Oppos-
ton TO their wishes. Here, then, we are
confronted by these incontr0vertible facts ::
First, the existence OF this great debt Of
thirty-two millions OF dollars and second,
that our ability to meet IL has been impaired
to the extent OF one half.
The Legislatures OF 1866 and 1871 recog-
nized the whole debt ana promised TO paw
it in full, with interest at per centum per
dnnun and the Legislature OF 1871 author
lied the funding OF two thirds OF the debt
OF the old or undivided State of Virginia,
as it existed before the war, when the debt
was contracted, that being the equitable
share which the present State OF Virginia
ought, in its opinion. 10 bear, leaving the
remaining one third to be settled by West
Virginia.
ODUtT l0lS ACT OI Assembly uDOul Unity
millions of the original debt of the old
State (Which was estimated TO he forty-fve
milllons) was funded and twenty millions Of
new bonds, denOminated "coDsOls," were
issued, and ten millions OF what are usually
called West-Virginia certificates. The in
terest on the "cOnsols" WAS provided for
by semi-annual coupons, which were made
receivable in payment OF taxes.
While this process OF funding was going
on new General Assembly of Virginia was
elected and assembled, and, being dissatis-
fed with the action OF its predecessor, pass
ed an act purportng TO repeal the sections OF
the funding bill of 1871 which provided for
the receivablity Of coupons for taxes, dc.
Tue validity Of this act OF repeal became the
subject OF judicial consideration, and our
Court Of Appeals decided that so far as the
funding had been perfected, by the accept
ance Of the terms OF the bill by creditors and
the consummatiOn OF the agreement be-
tween the creditors and the State by the
surrender Of the old bonds and acceptance
of new "consol" bonds, there was a (" con-
tract" between the parties, which. under
the provisions OF the Constitution OF the
United States, could not be " impaired by
any subsequent action of the State.
The court, therefore, held that the re.
pealing act, so far as the "consol" bonds,
which had been issued. were concerned, was
in violation Of the Constitution OF the United
States and imperative and void.
Thus there has been fastened upon the
State OF Virginia debt OF a little over
twenty millions OF dollars, which is, sub
stantially, preferred debt, the interest on
which. at the rate Of per centum per an
nun (amounting in the aggregate to ,200,-
O00) is secured by coupons, which are re-
celvable in payment OF all taxes and other
debts and demand. due to the Common
wealth.
But there still remained Slj,000,00O Of the
original debt OF the old State OF Virginia
which bad not been funded when the act
repeating the sections Of the funding bill Of
1871, above referred to. were passed. or
this two thirds Tor $4,000, 000l was recog-
niZed as the debt OF the present State OF
Virginia, and the remaining one third Tor
SOCIOLOGY as the debt OF West Virginia.
The holders OF these fifteen millions OF
dollars OF original bonds attempted TO fund
them under the provisions OF the act OF
1871, but the Court Of Appeals very pro-
perlv decided that as the holders OF these
bonds had not before the repeal OF those
sections accepted and complied with the
terms Of the law of 1871 by actually sur.
their old bonds and receiving new
ones in lieu Of them, thereby perfecting
the agreement between themselves and the
State, there was no contract" within the
meaning of the Constitution of the UDted
States which could not be impaired" but
merely an overture by the State with view
TO contract, which, not having been ac-
cepted and complied with, it was competent
for the Legislature at any time before final
acceptance and compliance with tue terms
by tue creditor to withdraw.
But, as the Legislature had failed 10 re-
peal the whole funding bill OF 1871, but
only the clauses in regard TO the receivabiity
of coupons for taxes and other dues TO the
Commonwealth, it was still competent for
the holders OF original bonds to fund them
and receive in exchange new bonds with
coupons which were not receivable in pay
ment OF taxes. A number of the original
creditors availed themselves of this privi-
lege, and received new coupon bonds, the
coupons OF which were, on their face, not
receivable in payment OF taxes. This Sc
cOnd class of bonds is known in commercial
circles as ''peelers." | am not advised OF
the amount OF this class OF bonds which has
been issued. presume it amounts to sew
eral millions OF dollars but II can readily
be ascertained at the office OF the Second
Thus it will be seen that we have second
class OF Virginia bonds, which, though
equally just, and in equity entitled to stand
on the same footing, are in law and in fact
placed on lower level, as the coupons can
not be used IN the payment OF taxes, &C., and
in the stock markets they sell for about two
fifths OF The price that is paid for " consols,"
or those bonds the coupons OF which are
receivable for taxes.
There is still another, or third class OF
bonds, which, although equally just with
the other classes, stands on still lower
plane. This consists Of the residue OF the