National Republican. (Washington City (D.C.)) 1872-1888, 1882-02-18
THE DEBT QUESTION.
THE SITUATION IN TENNESSEE,
Interesting InierrIew In Reference to the Validity
Of the State Dcbt-A Clcsr and Concise
EHplanation-Tho Recent So.
preme Court Decision.


summer Of 1880. three distinct organized political
parties In that State-the Republican and the State
Credit Democratic parties both recognizing the
validity Of the bonded debt which now amounts
with accrued interest to about s27OJOOO1. and the
Low-Tax Democratic party, which denies the
validity ola very large portion Of the debt aud is
opposed to any settlement which is not first sub.
mited TO the people, or which contains pro.
vision making coupons Of interest receivable
FOR taxes and debts due the State
You must also know that IN the canvass Of 1880
each one OF these three parties and the Green.
hackers nominated candidate for Governor. und
IN many Of the counties and senatorial districts In
the state there were three separate legislative
tickets. Al the election Of that year there were
cast exclusive Of three or four thousand votes for
the GrceubaCk candidate for Governor some 23g,.
BOO votes; the Republican candidate receiving
10000. the State .CrCdi, Democratic candidate
1000, and the LOw.TaX Democratic candidate
b7OOJ This WAS tie relative strength Of the three
parties thcu The Republicans by IA very small
majority carried the lower house Of the Lcgis
turc and with The State. Credit Democrats
IN the house were enabled to pnss
a measure IN the house for compromising aud
settling The state debt 10y an emphatic majority
The state Credit Democrats and the Republicans
In the Senate on the question of the tiual passage
oftlis measure, carried II by ODs uOtc This meas.
IRE is known as the 1903 bill. IT was passed IN
B"''"''''t " Va ibuh'efV lfbibHNfOH NlhilH Ol iNt
holders and those who represented tic large body
oi tie hOldcrs Of our bonds Ia take compromise or
renewal bonds for unu hundred cents IN the dollar
OF said bonded debt most all Of which bears G
per cent. INTEREST,", the renewal or funded bonds
To bear per cent interest, payable semi an.
nualiy, with coupons of interest attached and
nude receivable tor taxes and other debts due the
State the bonds to be issued to mature In ninety.
nine years, with the right reserved to the state 10
redeem them at any time ailer five years
This measure for funding did not embrace the
school fund bond, but excepted this bond OF
t2,500,G0O and few hundred thousand dollurs
held by ccrtnn educational institutions out of the
operations Of the act funding board was pro.
vided for in the act TO carry ont Is provisions IN
the matter Of funding the debt. AFTER the pms.
cage OF the 1908 bill (which. by tie bye had the
honor OF introducing in the House, there was,
believe, general feeling of relief except among
our friends the Low-TnNes" ON account of the
question beng as II was assumed II had been
finally settled. The Legislature had levied the
tax 10 pay the interest, and in point Of fact the
taxes were being promptly paid
"But unfortunately for the credit of our State aud
her every interest, moral aud material, a few tax
payers dissatisfied with the law and, us is shown
by the testimony before the committee Ofinvesti.
CATION authorized by our State senate, urged by
spectators in Tennessee State bonds filed bill
IN equity in the ChauCery Court at Nashville
board seeking TO cnjoin the execution of the law
upon the ground inter ada that the coupon pro.
vision was unconstitutional and void and that
the passage Of the act had been obtained by
bribery and fraud. A temporary injunction was
granted by Low-Tax Democratic circuit Judge
restraining the board from Issuing the compromise
bonds. At the hearing in the Chancery Court
upon motion TO dissolve the Injunction the
chancellor dissolved the injunction and dismissed
the bill. An appeal was taken to our Supreme
Court, and on last Saturday a majority of chat
court reversed the decision OF the chancellor and
remanded the cause, but made, SO far as the court
could fuality OF the matter by deciding that the
law the 1908 bilD was unconstitutional and void
as the Legislature had no power to pass an ire
peaable statute or TO make coupons ofinterest re-.
eeivable for taxes and thereby tie up n large
amount of the revenues OF the State for so Tonga
term as ninety. nine years.
Our Supreme Court Is composed Of Ave Judges
Chief-JuSice Deadereck and Hon. Edwin H. Ew.
ing, one of the abest If not he ablest, turist In
Tennessee, sustained the validity of the act while
the other three-Jusuces Turney, Freeman and
Mcfarland, all three, as l learn, original Demo.
trats-decided that the act was unconstitutional,
and that coupons could not be made receivable
for taxes.
win not attempt TO review the decision OF the
majority of the court, but will only say that IL was
made in the face of decision of the Supreme
Virginia case~invOlving the coupon question in
that State, and seems to have been made mainly
upon the theory that the United States courts
would acquire jurisdiction under the coupon pro-
vision OF the act and declare an unconstitutional
law 10 be constitutional and valid. But whatever
may be said as to the weakness Of the arguments
in support of the majority decision as compared
with those in support of the opinion Of the chief.
Justice aud Mr.. Ewing the decision Of a majority
OF the court is the law Of the case
THE decision caused Tennessee bonds, which,
even pending the suit 70 enioin the 1908 act, had
appreciated in value in the market to seventy odd
cents to go down to nfy-odd cents
Nor was this result wonderful II IL difficult to
conceive what disastrous influence this decision
will have upon the credit Of tho State and the ma.
terial interests of our people.
The condition in which this unlocked. for and
most extraordinary decision Of our Supreme
Court has placed us In Tennessee is most unfortu.
nate for the State and her creditors. II is uniOr.
tunate for our people because the yexed and ex.
citing question of the state debt, which we
thoughtwe had settled, is now again the allah
soTbing question and the principal factor in Ten.
nessee politics, unsetting everything, destroying
confidence IN investments repeling population
and capital from our State, and checking rennes.
zee, for the present at least in her march toward
prosperity and development,
"Ii Is unfortunate for the holders OF her bonds,
because the only certain guaranty they could
have Of the prompt and certain payment of the
Interest on the bonds cannot now be given them,
90 that II seems 20 me they are now forced TO
choose between the alternatives of making n
proposition TO fund the debt and past. due coupons,
trih ne coupon legal tender provision Zen out or else
bold their bonds with five years accumulated in.
terest with no certain chance Of provision being
made Tor me payment either Of past.due or cur.
" But" our reporter asked, cannot the Legis.
latuTe in some way remedy the difficulty and will |
not Governor Hawkins eal that body together i'm. |
medately 10 consider the question:"
81 do not See" said Judge Harrison what the |
Legislature can do in the absence Of proposition
from the holders Of the bonds 10 fund the debt at
q certain figure, with the coupon feature of the |
former proposition lett out; and even with such a |
proposition otough! before the Legislature, am |
Is at present constituted.
81 am not authorized to speak for the Governor;
but am sure he Will not co SeDe the Legislature
unless he has something definite 70 recommend 10
shat body aud am equally sure that he will have
nothing TO recommend In the absence OF propo.
Gition-a voluntary onc-fTom our creditors for The
settlement Of The debt Oh plan which does not
cOnlrayene the decision Of our Supreme Court.
81 cannot say whetheTit Is likely even that such
= proposition Will he made but " II be shortly
made the Governor would, think, transmit II 10
the Legislature when that body meets in extra
session tins spring OF summer 70 lay of the state
OF Tennessee into congressional districts aner
Congress has passed the appOrOnmeuI bin
Now, suppose the Governor should submit 10 the
Legislature TO be convened the whole subject Of
tae State debt IN the absence OF proposition from
our creditors which he Is not al ali likely to do,
the Republicans could not consistently, and the State.
Credit Democrats, take Il, would no, provide for
any settlement that was not made IN pursuance Of
= voluntary proposition Of the bOndh1ders
" II II IL proposed 70 repeal the 1908 act and
levy tax TO pay the interest on the bonds now
held by our creditors, every one who knows any
thing about the sentiments NJ the members Of the
present Legislature and existing public sentiment
IN the state, knows that no such measure can be
carried, TOT, as ! have said the 1908 bill was
carried IN thCseuRte by one vote"
- believe firmly, moreover that n the creditors
make a proposition between this time and the as
INtFIa. IA Ira "a IN