Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1886-03-13
vuE r,pplEBERGER BONDS.
a Member of fhe Legislature Vpp"seS
Their Purchase by the state.
To The Editor of the Dispatch

bill allowing the Board TO Apply snV
surplus that may be in the treasury
which may not be needed to meet spe-
cial appropriations and for the support
of the government TO the purchase OF
Riddleberger bonds was hurried
through the Legislature in the last
DAYS of the session without proper, l
may say any, consideration by either
house. The act is simply perm'Ssiye,
and reasons of the grayeSt character
and concern to the State suggest them
selves why the Board should refrain
from paying any money out oil the
Treasury under the authority given.
As finance measure The plan pro-
posed and adopted by the Leg 'lature OF
lS82-'si, and realiirmed by the last,
would not be considered for one mo-
ment. much less adopted, anywhere in
the world except in Virginia. where le-
pslation Of this kind on the subject OF
finance is almost universally, as it was
in this case, dictated by brokers and
SPECTATORS. These classes live and
grow fat upon the misiOrtunes oil the
State. and are never content while there
is dollar Of surplus money in our
Treasury and the present plan was
cunningly devised by them to draw out
the last dollar that may remain after
paving the expenses of government, &c.
They would make the people believe
that the Board, in the purchase of Rid
dleberger bonds, is sinking the debt,
when in fact every dollar used in the
purchase Of these bonds increases the
Understanding debt Of the State, as
not a consol or McCulloch bond is
funded into Riddleberger bonds.
The modus operdndi under this sharp
scheme of the brokers to capture our
surplus cash is this They buy up old
unfunded bonds with coupons attached,
which are not tax-receivable, and which
are not troubling the State, at say forty
cents on the dollar. They take these
to the Second Auditor and Treasurer
and fund the principal Of each bond at
say fifty.three cents on the dollar, and
the interest on each bond, amounting
to more than the principal. calculated
to July. 1889, they fund at say eighty
cents on the dollar, thus converting the
interest on these old bonds, which are
not interest bearing nor tax-recelvable,
into Riddleberger bonds bearing 3 per
cent. interest. In this way every dol
lar Of interest funded adds to the IN
terest. bearing debt Of he State, and
vet they have the eilrontery to attempt
to make the people believe that the
debt is really being sunk.
When the Board Of Sinking Fund
meets and determines that 100000.
or any other amount, can be spared out
of the Treasury, they make pn5lic
proclamation Of the fact in certain
newspapers of the State, at the State 5
expense, that 100000 in cash of the
ueople's money IS in the hands of the
Board for the purchase Of Riddleberger
bonds. This is notice to the brokers
who have bought up the peeler trash
and their coupons and converted them
into Riddleberger bonds to bring for
ward the latter bonds and receive for
them the 100000 cash at such price
as a combination Of those in the ring
may fix.
The bonds thus brought in are not
cancelled, but are held against the State
as any other outstanding bonds.
During the years lSS4-'o5 our Trea-
sury was fleeced in this way to the
tune Of $G44, 900, and large amount
of Notwithstanding debt was made
interest bearing and yet it has been
said that this is the wisest financial
measure ever conceived by man.
In other words, to use money which
can be placed in bank at 4 per cent. in
terest to buy up past-due interest,
which is non-interest- bearing and non
tax-receivable, and convert it into 3
per cent. interest bearing bonds, is the
wisest measure of finance, &c.
The State is threatened this year with
a deluge Of coupons the liquor-dealers
feel that their business and property
have been injured and deprecated, and
its existence jeopardized by the passage
Of local option; they pay between
$500, OCO and $1,000 taxes, and near
ly all this immense sum may be paid
in $50 coupons. 1t will not be unnatu-
raj if they seek redress, to some extent,
for their losses by reSorting to this
mode Of paying their taxes. Then il
is understood that MahOne's pol
icy is to deplete the Treasury
by encouraging the payment Of pro-
perty and other taxes in coupons.
What, then, is the duty of the Sinking
Fund Board Will they themselves
bankrupt the Treasury by paying out
the peoples money with a lavish hand
to brokers', that they may grow fat by
buying up trashy peelers and non-in'
terest-beaiing bonds and converting
them into Riddleberger bonds bearing
3 per cent. interest, or will they allow
the surplus in the Treasury to be placed
in responsible banks, as it can be, at 4
per cent. interest, there to be held t
meet any emergency brought about by
the coupon holder or the decisions o
usurping and revolutionary courts?
A wise financial policy and common
prudence seem to dictate the latte
course as the safest and best, and if tn
Board will adopt it there will be sul
licient surplus in the Treasury to NEE
any deficit in the revenue which ma!
be caused by the ravage Of the coupon
If none arise, then the taxes of the PEG
4 pie may be reduced--fOr at least on
= year--in 1887 or 1888.
The policy of purchasing Riddle
berger bonds by the Board will be pro
s ductive Of no good to any one but tn
-, brokers and those in cahoot with them
A MEMBER.
Local Option.
y RICUMOND VA March / l. so