New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-04-30
THE VIRGINIA DEBT.

the States cannot do by their laws they cannot
do by changing their constitutions, which arc
only laws of a more permanent character. The
Court has also decided that all laws which
affect ipjuriously the remedy of creditors for
the collection of debts are violation of con-
tracts. This doctrine, in its broadcast sense
has been declared and confirmed by numerous
decisions The following is the language OF the
Court in the case of Walker against Whitehead ::
"The laws which exist at the time and place
"of the making of a contract, and where 1t Is
L" to be performed, enter into and form part
"of if. This embraces alike those which affect
cts validity, construction, discharge and en-
"forcement. Nothing is more material to the
obligation of contract than the means or
ats enforcement. The ideas of validity and
"remedy are inseparable, and both are parts
"of the obligation which is guaranteed by the
Constitution against impairment"
In other words, to quote the language of
Professor Pomeroy in bis work on Constitu-
tional Law, "a party may demand that sub
"stantaly the same remedial right appropriate
"to his contract when it was entered into shall
abe accorded TO him when it is broken"
"Undcr our system of Jurisprudence" says the
same writer, "twO forms OF remedial night
"may result to the injured party upon the
"breach cf n contract; the one form applying
"to a small number Only of agreements, the
"othcr being appropriate to all The first
"is the right to have done exactly what the
"defaultng party promised TO do-the rene
"dial right to n specific performance. The
"othrr is compensatory. or the right to be paid
"such an amount OF pecuniary damages as
"shal be a compensation for the injury caused
"by the failure of the defaultng party 10 do
exactly what he promised to do. Both of
"thesc species of remedial rights must be
pursued by the aid of the courts. In both
"the existence Of the contract and OF the
"breach must BE- established. These facts
"having been sufficiently ascertained, decree
&" or judicial order must be rendered, in the
"first case, that the dcfaulhng party do ex-
"actly what he undertook to do; and In the
"second case, that the defaultng party pay the
"sum of money fixed as a compensation for his
delict." Wee il necessary, we might quote
equally strong language to the same effect in
other eases In fact, until the recent decisions of
the Court in the Virginia and Louisiana cases,
nothing seemed to be better eStabi he'd than the
doctrine that neither by changes OF their con-
stitutiOns, nor by the acts of their Legislatures,
could States impair the obligation of contracts
public or private, and that the impairment of
tho rcmedy for enforcing such obligations is
an impairment of the obligation.
Now let us glance (for we can merely glance
at the history of these cases and the decisions of
the Court The State of Virginia, iii order 20 re-
ducc her debt, which she declared herself unable
10 pay in full, proposed in 1871 compromise
with her creditors, and to effect IL passed II
Compromise Act authorizing an issue of bonds
for tw0-thIrds of her debt and providing (for
the security OF the bondhodcrs) that the
COUPONS of the new bonds should be receiv-
able for taxes and other State dues. Before
this compromise was fully executed, but after
about two thirds Of the debt had been funded,
she repealed the provision of the act by which
the coupons were secured, and prohibited those
which had been issued from being received for
taxes and other State dues. The question Of
her right To do his was soon brought before
her own Court of Appeals, which promptly
decided that the provision of the Compromise
Act which made the coupons receivable for
taxes was a contract between the State and
the holders of the bonds and binding upon
the ate Under this decision, the coupons
were received according to the terms of the
contract up to January 1882, when the State
passed another act known as the Coupon
Killer" by which officers of the State were
prohibited from receiving tho coupons until
their gcnuineness (of which there was really
no question: had been established by the YER
diet of jury, an appeal from which verdict
might be taken to the Circuit Court and to
the Court of Appeals-GH expenses TO be borne
By the holders of the coupons The preamble
aud act are too long to be Inserted. 1t il
sufficient to say that they were skilfully drawn
with the manifest and avOwed design to de-
prive the coupons of their chief value. This
act the Supreme Court at its present session
has decided TO be binding upon the bond
holders, although by it the coupons and the
bonds that bear them have lost nearly fifty
per cent of their previous value. Before this
act was passed, the coupons were received by
the collectors as money. Now, before they can
be received or redeemed, the holders must be
subject to the expense of a law suit with the
State and in her own courts while there are
not a half-dozen individuals in the State whose
annual taxes amount to as much as would be
the expenses of suit Ii IL thus seen that with
the aid of the Court to which the people have
looked for the protection of their rights, and
upon which they have pinned their faith with
entire reliance Virginia has at last triumphed
over her creditors. Deprived of all practical
remedy, the holders of her bonds have now
nothing to rely upon but the faith of State
which has already violated two compromises
which has struck off One-third of an honest
ante-war debt, as a charge against West Yir-
ginia, which that State refuses TO recognize, and
now proposes unrestrained in the exercise of
her sovereign power, to strike off another third.
1t is possible that tho railroad companies by
combining may be disposed to incur the ex-
pense Of o suit with the State. II they
should be, we venture TO predict that another
ooA .r.iu Lo I,naanl 1rhich will lonuo