National Republican., 1885-11-20
wiping Out Debt.

The REPUBLICAN recently made mention
of judicial decision rendered at Indian
apolis, under the operations of which the
wealthy aud prosperous manufacturing
and commercial city Of Evansville will be
compelled to pay large bonded debt, Of
which that municipality sought to relieve
itself by q simple process called repudia-
tion. There was no pretenso that the
money represented by the bonds had not
been lawfully borrowed and received.
twas not alleged that the moHey had
been applied to other than the intended
uses. 1t was a clear case Of bald, unblush-
ing reputation, made only the more re-
pulsive by the insncere and nimsy pre-
texts on which its justification was at
tempted. II lis hoped that the decision of
the courts will be gracefully accepted, and
that the city of Evansville, which has every
prospect Of great future, will not further
attempt to draggle its good name I'm the
mire Of repudlation.
IL has been recently announced that the
city of Memphis has compromised" its
bonded debt aggregating about $G,0OO,0OO.
The alleged compromise is simply case of
PEELED to accept the terms offered orget moth
ing. The money was borrowed for various
public uses, such as schools, pavements, rail-
roads, and the expenses Of local govern
ment. II was so well applied that IL pro.
duced all the benefits expected. The city,
under the stimulus given by the improve
ments for which the money paid, grew
rapidly I'm population, commerce, aud
wealth. There is nothing which one is so
likely to hear from n resident OF Memphis
as boastlng Of that city's growing trade. It
is claimed that Memphis has population
Of G2,00O, and the rate Of taxation is 81 295
on the 81 600, which is lower than the rate
in most Of the commercial or manufactur-
ing cities in the east or west.
The city Of Memphis did not try to com
promise with its creditors. It did not put
in plea of poverty and ask for conces-
sion. The performance was more simple
than that. II declined to meet its obliga-
tIons, and the legislature of the state helped
It on in its dishonest scheme by annullng
its charter, so that It ceased to be city and
became "the taxing district of Shelby
county" Having thus put itself in position
to efTectually bulldoze its creditors, the city
said to them: 1--WE will redeem the per
cent. bonds with new bonds for half the
amount at percent" In other words, every
dollar Of per cent. debt was to be can
celed with a 50-cent obligation at per
cent! There was long delay, there was
litigation, there was heavy loss which
brought suffering on creditors not able to
bear it, but in the end the "compromisen
was agreed to Memphis thus wipes out
half her debt aud half the interest on the
unrepudlated half 1t is grand financial
operation, but 1t is an example that even
the professional gambler could not follow
without being himself repudiated and os-
tracized by his associates.
The state Of Tennessee has repudiated
bonds given in ante-bellum times which
were bought by George Peabody and left
10y him as part OF the assets of the Pea
body educational fund. For years past that
state has been one Of the chief beneilciaries
of that fund-of that great and wise charity
which she has despoiled. 1t was natural
enough for such state to sympathize with
Memphis and help her carry out her dis
honest design.
The REPUBLICAN does not undertake to
say-for it is not true-ttat all cases OF
refusal by states or municipalities to pay
their bonds or recognize their validity are
samples of repudiatlon. Neither law nor
equity requires the payment of bond
that does not represent an honest debt. l,
is not enough that bond appears all right
on its face. Many fraudulent bonds have
been put upon the market, bonds which
have no standing in law or equity. Such
paper may be repudlated without violation
of honor.
But when state or municipality has law
fully borrowed and fairly received money
refusal to pay II is dlsgraceful TO the las,
degree. The community that boasts of low
taxes and increasing prosperity as result
Of wiping out its just debts proclaims 1t,
9 shame. And, in the long run, dishonesty
is sure to prove costly to any state or city
Memphis will never be able to borrow money
again, will not find it possible to place hei
bonds, no matter how much she may need
loan.