Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1883-01-17
THE CITY DEBT.
Report Of the Committee Appointed by
the Citizens TO Consult with the
Creditors Of Memphis,
And Agree, if Possible, Upon settie'
ment Of the Debt which Has So Long
Been Bone OF Contention.

The committee appointed at a meeting OF
! the citizens Of Memphis to negotiate with
| the holders OF the debt of the old city OF
| Memphis, and TO ascertain on what terms the
said debt can be compromised and settled,
make the following report:
The Report.
| The committee, Immediately after their
| appointment, organized and proceeded TO
the discharge of their duties. A sub-con-
mittee was appointed to confer with the
/ creditors of the old city, reporting from time
/ to time to the general committee, and every
effort has been made to come 10 satisfactory
i agreement. The committee kept constantly
1 in mind the views expressed by the meeting
| from which they derived their appointment,
adversely 10 any settlement that involved
| the issuance Of bonds by the Taxing. District,
and the making OF the coupons receivable
in payment of taxes, and they endeavored
| TO impress upon the creditors the strong op-
position of the great mass of our people TO
| embodying these features in any plan
of adjustment. Various propositions were
suggested by the committee for the
issuance of bonds by a board of commits
| sioners to be created for the purpose, and
making the coupons receivable only in pay
ment Of the special tax laid for the payment
OF the interest. No proposition containing
these features received any favor at the
hands of the creditors. Without detailing
the particulars Of the negotiations, which
| would be tedious and Improbable, the COM
mittee have been driven to the conclusion
that no compromise of the debt can be
| effected on any other terms than those on
which about ene-third OF the debt has
already been settled, namely:
| First-The bonds to be funded at fifty
cents on the dollar, in bonds bearing six per
cent. interest.
Second-The bonds to be Issued by the
Taxing District government, and the coupons
to be receivable in payment OF all taxes due
| the said government.
Third-Adequate provision by taxation
to be made BY the Legislature of the State
| for the payment of the interest and for a
| sinking fund to retire the principal OF the
| bonds as they fall due.
Fourth-Ths settlement not to take effect
| until three-fourths OF the creditors in
amount shall signify their acceptance
| thereof, within a reasonable time to be linn
| tied.
This plan does not contemplate bestowing
| the taxing power upon the Taxing District,
or subjecting i: to writs of msndamus to
compel the exercise of such power. The
committee are fully aware of the objections
| that exist to some Of the terms Of this plan
of adjustment. No person can be more
| strongly opposed TO the issuance Of bonds by
the Taxing District and to making the cou-
pons receivable for taxes than we're the in.
| dividuals composing this committee, and
they would not yield their convictions If
they did not believe it absolutely necessary
to do 30 in order to secure a settlement of the
| debt. But we are obliged to look our actual
situation in the face. Our State courts have
already decided that the Taxing District is
the successor of the city aud is
liable for its debts. Judgments to
the amount of hundreds of thousands of
dollars have been given against the
Taxing District for these debts. Whether
the courts can by mandamus compel the
Taxing District to levy taxes for the pay
ment Of these judgments without previous
action BY the Legislature comforting on IL
the taxing power, is a question now pending
in the Supreme Court Of the United States.
We will not undertake 10 state the legal
merits OF this question. 1t is enough to say
that at best the sword is suspended over
our necks by a very slender thread. II the
| judgments tlready rendered should be turned
loose upon the property in the District, the
result would be we'll nigh confscation.
Should the Supreme Court decide in our
favor, on the ground of the absence of the
power OF taxation, then how long will it be
|
creditors will confer that power? Certainly
not long, unless we can show that the e1-
actions OF our creditors are grossly unreason-
| able and unjust. No clear civil right is
likely to be left long, in land of law, with
out a remedy; and we cannot expect
the Legislature to stand as barrier between
us and our creditors unless we can show that
their demands are uncomfortable, aud that
our reasons for rejecting them are not more
sentimental than substantial.
| Again, suit is pending in the Supreme
Court of the State, and will be heard next
April, the object Of which is to compel the
receipt OF the coupons of Flippin compro-
mise bonds in payment Of the taxes of the
Taxing. District. Ii this effort should be
successful, then the past-dae coupons of these
bonds would absorb the entire revenue of
the Taxing District for two years, which
would thus be left without one dollar to de-
fray its current expenses, including the po-
lice and fire departments. This Is fearful
condition to contemplate. Is 1t likely to
come upon us? We would not be the
prophets of evil; but in view of what the
court has already decided, it would seem to
require no very long stride to reach
the conclusion so much 10 be dreaded
and 30 full Of mischief. At all
events, these are dangers that
are impending over US and which may soon
fall upon us. 1t behooves us to look them
in the face, and to guard against them before
it is too late.
Again, we must bear in mind that we owe
the debt that is claimed against US, and that
our creditors are willing to compromise for
one-half, taking our own obligations, having
long time to run. We have already funde
large amount on the very terms they are
willing to accept for the balance. But we
have changed our form OF city government,
and they ask the bonds of the new govern
ment in exchange for the old. 1t would be
desirable to avoid setting precedent of au-
thorizing the Taxing-District to issue evil
denoes of indebtedness. But, after all, if we
deny it the taxing power, and restrain it
from contracting other debts, there seems no
insuperable objection to imposing upon il the
cient tax is laid 10 provide for
the interest, the reception of the
coupons for taxes may not prove
a serious inconvenience. But the committee
are deeply impressed with the great import
ance of settlement of this debt. In its pres.
sent shape it is an incubus upon the prosper
ity OF our community, and threatens to prove
milestone around our necks. 1t is not only
repelling capital from coming here, but is
drawing away that which is already here.
| We cannot afford 10 leave it unsettled any
longer. All classes are deeply interested in
the question-none more than the mech anics
and laboring men, who would be largely
benefited by the growth aud prosperity likely
to follow the settlement.
These are some of the considerations that
have induced the members OF this committee
to forego their individual wishes and opin-
ions, and to favor q settlement on the terms
indicated herein. We are entirely satisfied
that no settlement can be effected on any
more favorable terms. To reject these is to
have no settlement at all, and to declare
that it is better to take the chances
of the litigation that is now pending
and TO risk the action of future Legislatures.
We do not think il the part Of wisdom to do
so.
The majority of the committee therefore
recommend that suitable persons be ap-
pointed TO attend TO the preparation of q
proper bill, carefully guarded, for the settle
ment of the debt on the footing stated above,
and to urge its passage by the Legislature
now in session. Respectfully submitted,
NAPOLEON HILL, Chairman
JOHN OVERToN, JR.,
JOHN w. BILLIARD,
J. c. NEELY,
H. 7. KLLETT,
N. N. JONES,
BENJAMIN BABB,
JAMES Z. GOODLETT,
LEWIS HANAUER,
JOHN 3. RANDLE.