The sun. [volume] (New York [N.Y.]) 1833-1916, 1884-08-03
Are We a Nation Of Rascal.,

In the last number OF the North American
Rerier, an attempt Is made to prove that
all Of us who are citizens OF the United
States are injured and disgraced, alike in our
collective and our individual capacities. by
the fact that State debts are repudiatcd by
certain members Of tho Union. The writer
Of the article afflrms that, owing TO tho
course pursued by the defaulting common
wealths. we are looked upon in foreign coun-
tries as O nation OF rascals, and he declares
that the reproach will be ,richly merited UNI
less the Federal Government at once assumes
the payment OF the dishonored obligations,
thus compelling the innocent to suffer for
the guilty.
Now, II there Is any class OF commodities
to which the axiom careat e,aptor IL plainly
applicable. 1t is that species OF bonds whose
payment is guaranteed by a Stats as distin-
guished from the national Government. The
very fact that securities were offered by
fraction of the nation instead OF the whole
OF 1t, by partially autonomous community
whose powers would be more probably un-
dervalued than overestimated, would suffice
to put tho foreign investor on his guard and
cause him to institute inquiries as to tho
methods Of enforcing payment. A glance at
our Constitution, which Is neither an inaccess-
ible nor mysterious document, would dis
close to any lawyer the non-sxlstence Of any
form Of process by which State can be COM
PEELED to satisfy its creditors, and the deci-
sions Of the United States Supreme Court,
recourse to which Is also very easy matter,
would show that this tribunal has felt itself
unauthorized to remedy, by strained con-
struction, that defect in the organic law
Precautions OF this kind being 80 obvious
and facile, European purchaser Of State
bonds has not only no legal, but no moral,
right to look upon tho Federal Government
as virtually an endorser. He accepts tho
commodity on the credit OF the State alone,
and, like man who buys horse without
warranty. exhibits q confidence In his own
Judgment that sometimes proves unfounded.
The truth Is that, whatever confusion may
exist In the minds OF angry and thick headed
individuals. the great European banking
houses are perfectly alive to the difference
between our national and our State indebt.
edness. Thore Ia no proof that the credit Of
our Federal Government has been In the least
degree affected by the failure Of about fourth
OF the constituent States to meet their obl-
cations, nor Is there any reason to suppose
dealt justly with their creditors would
suffer on the European Exchanges from
any derellctions Of their defaulting sisters.
We. must not imagine that banker loses
the discrimination which Is the key to his
success tho instant he runs his eyo over
list Of American securities. He would not be
lit to BIO trusted with other peoples money,
nor could he keep grip upon his own, II his
Judgment could be clouded by the blind,
vlndictivo fury with which SYDNEY SMITH
denounced the Federal Government and the
whole American people because he lost
little money in Pennsylvania bonds.
Justice, as we'll as charity, begins ct home,
and 1t Is preposterous to say, because
some European investors who should have
known what they were buying have been
defrauded by some Of the State Govern
ments. that therefore Congress should step
In and make good tho loss out OF tho nation
al Treasury We must rid ourselves OF the
notion that the Treasury lie filed with drop
pings from tho sky; 1t Is filled by contribu-
tions wrunR, under q system OF war taxes,
from the pockets OF the citizen. The
astounding proposition, therefore, made In
the North American, amounts simply to this:
that tho honest States, which constitute
three-fourths Of the whole number. and
which pay far larger proportion Of the
taxes. should. after punctually meeting
their own obligations, DO called upon. besides.
TO pay the debts Of their dishonest neighbors,
though not dollar OF the borrowed money
was over spent on their behalf. OF course,
the effect Of such shifting OF financial
burdens on to the wrong shoulders would be
highly appreciated In Virginia and Tennes-
see. for 1t would mako the credit OF q repudi-
ating State overy whit as high Is that Of the
post upright commonwealth that. In the