The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1884-09-11
sTAUNToN, VIRGINIA.. SEPTEMBER 70 1884.
Judge Hughes on the state Debt.

/ In the United States Circuit Court
T esday, in the case of Eaure rs. The
Commissioners of the Sinking FFund Of
Virginia, Judge Hughes delivered the fol
loving opinion
> has p. Fdure rs. the Commissioners # The
Sinking Find Of Virginia.
Revised decision and rrstatement OF the
,lmds OF its conclusions by Hughes. J..
The decision Of this court in this case
5 filed onlllp nth ultmo. The appro-
! +. ateordrrl WAS bot then entered in con-
lllence OF the absence Of the Attorney
Is neral of Virginia Who, us well us other
ic inset iii the case. had been informed Il
" elk before that the case would be dealt
With on the 18th. The decision itself was
| fiji, in Difference to the meeting OF the
/ G neral Assembly Of Virginia then about
L, be held.
| subsequent occurrences have rendered
| il proper that the grounds and conclusions
OF that decision should be revised and
/ tested. the more especially as some four
! teen other similar cases have been filed.
| This having been maturely done. it is now
| t. ught proper to deal with the question
pr seated somewhat more ut large than
was done in the decision filed on the 18th
| Ill imo.
| The General Assembly of Virginia WAS
| confronted at its session OF ISL with
All appalling debt. the principal Of which
WAS out of proportion TO the resources Of
tie State, and the interest, accrued ard
acrrung, on which was paralyzing to the
| Treasury. That part of this inter-
est which was most embarrassing was in
| the form of the coupons issued upon the CON
| sol bonds of 1871 and 1910 bonds of 1879,
which were receivable in payment OF I'LL
taxes and dues to the State. Possibly the
! State could have got along with the prin-
cipal of the debt if she had not also had to
deal with these coupons. these cutwormS
OF the revenue, which had destroyed the
School Fund, the fund for the support Of
her eleem0synary institutions, the Lite
rary and Sinking Funds, and had even
brought about the necessity of obtaining
short loans from the banks for means with
Which to conduct the ordinary operations
of governments
The General Assembly of 1SS1-'S2 adj
dressed itself to the task of relieving the
State from this distressing situation. 1t
devised proposition of compromise from
the State to her creditors in the form of
all Act of Assembly This act was passed
on the 18th of February 1882, and is
known popularity as the Rddleberger act.
In substance, the proposition was to
strike off one third of the debt, and to pay
the remaining two-thirds of it in bonds
running for fifty years and carrying inter
eStS at the rate OF 3 per cent. per annum.
The details of the act varied the general
proposition, notably in respect to the tax
receivable coupons; but the general nature
OF the scheme of compromise proposed
WAS as stated.
Though not very material to the pur-
poses of this decision, the details of the
act will be here given. The preamble dis
tinguiShes the various sorts Of bonds and
forms of State debt outstanding on the LIST
of July, 1882, into classes A. b. G.. d. E.
f., and Literary Fund as follows:
Debt AS EXISTING IN 1882.
Glass A. consols l369,974
Class h, l0-4U soil, 800
Glass q, peters,. Observation-Disclosures. 1884 ,305
Class d. interest on peelers. 1072,55
Class Il, unfunded bonds. .............. 3,773 493
Class +, interest on above. 2S62,S53
Li9 9erary Fund Fund 9oe Is a23 5
IOtal .S34 79S, l2S5
Note.-These amounts are exclusively of in
terest from the preceding semi-annual period
bond offered for funding which of course in
creases somewhat the amounts above stated.
This classification shows the aggregate
of the debt, exclusive of certain interests
and coupons, to have been nearly thirty
I'VE millions OF dollars. The preamble |
embodies an argument to show that only
about two-thirds of this aggregate of debt |
was justly due by the State-to-wit, $21.-
035,377, exclusive of certain coupons. And
it declared that the resources of the State
are inadequate to pay more than per
cent. in annual interests on this debt.
The preamble is followed by the enact
ing clauses of the act. some of them pre-
Scrlbing the form of the new bonds to be |
issued and section five prescribing how
the several classes of the debt which are
defined in the preamble shall be scaled in |
exchanging the new bonds authorized by |
the act for the old Indebtedness. The !
scheme of scaling established by this Sec
ton would produce the following results,
if all the old Indebtedness, excepting GER
tain interests and coupons, should be |
funded in the new bonds:
THE RIDDLEBERGER ACTS SCHEME OF SCALING |
AND ITS RESULTS.