The Daily times. [volume] (Richmond, Va.) 1886-1889, 1889-12-05

taxes through suits In the courts. IL ma
been shown that the state, after parting
with all the assets under Its present offer t.
It's creditors. would bayeto pay annually tos
interest, gJ03, 3S9. 20, which exceeds the sum
applicable to that purpose by $i43, i2s.i2
/ Ii would not, therefore, be sound PROPOSE
! ton 10 entertain a settlement carrying q
larger amount Of interest than that. III the
debt could be settled by recast OF the act
OF 1852. funding, tor instance, consol bonds
at greater rate, and the 1O-4vs ut the
same rate, and the old uBfunded and peeiers
at less rate than provided for by that act,
while. at the same time. all old interest
and outstanding coupons TO January the LIST,
1890. could be- funded at rate 50 as to bring
the whole amount Of interest the state would
have 10 pay. under such an arrangement
within lis ability 10 do 10, / would unhesi-
tatingly recommend its acceptance upon
the part OF the State. and j entertain the
| hope that the bondholders may make some
/ such proposition TO the General Assembly
which will be satisfactory TO them and hon.
orable 10 the state, and whose obligations
could be s'rupulously guarded and faith
! fully carried out.
The refusal Of the holders Of bonds with
tax-recciyable coupons 10 fund them. and
their persistent use OF coupons Tor the pay
ment Of taxes, leaves the debt unsettled.
the use of coupons. have been partially ef-
/ fectiye. The offer Of the joint committee, in
/ 1877, 10 the creditors was To fund the consols
at 20 and pay per cent. interest on same
to fund i0-iGs at 60 and pay ~ per cent.
| interest on san j, and 10 fund tax coupons
at 10 and pay 3 per cent interest on same;
and, in addition, TO pay the bondholders ~
per cent. in cash for $l,OOO,OCO coupons.
The state could not renew this offer now,
and il is reasonable 10 assume that the
bondhoiders. in the light of the experience
Of the past two years, might expect a some
what lower rate of funding. For the past
two years, ending September 80, 1859. 1t has
been shown that $23I, 900 a year has been
forced into the treasury on judgments for
taxes, while the tax coupons maturing
amount 10 $l.00.,5 800 per aBnum. Whilst
the forced receipt Of these coupons, instead
Of money for the taxes of the State, has been
n source Of great annoyance IT, the officers
charged with the collection OF her revenues.
il has. in some measure, diminished the
ability of the State to pay ultimately the
same creditors. and has resulted in no i'm
mediate benefit 10 them. because the net
sum realized from the sale Of these coupons
TO taxpayers, after deducting the cost OF
/ litigation 10 them. is almost nothing.
The act Of 1852 requires cOnsOis to be
/ funded at 80, l0-4Gs at 80, and all unfuDded
peelers, and so on, at 90.
The equity Of these rates il not clearly
seen. The holders of the old unfunded debt
have refused for seventeen years to fund.
while many of the peelers are known to be
lost They do not enter into the present
contest with the bondholders. The bonds
that are now pressing for settlement held
10y the public are, in round numbers; $l2,-
! 100000 Of cons0ls. with tax coupons, 5000
! of a
/ s.. 800 900 OF tax coupons, inclusive OF those
TO mature on the LIST of January, 1890.
Let us suppose, by way Of Illustration.
that the cOnsOls were funded at 10 cents.
equal TO $9030.000: 10-40s at go cents, equal
/ to $1,000, 000; $500 eco Of tax coupons up
| to LIST of January, 1890, at 40 cents, equal to
t S2,321 900; making total Of i4,9Jo.000; 3pef
cent. interest on same would be Siis,5OQ. In
other words, if this proposition was accept
ed by the bondholders who hold the above
classes Of bonds, it would undoubtedly set.
tie the debt, as the litigation has been for
them. and for them alone.
We have seen that the state has had f.
pay $237, 900 per annum for the past two
years for coupons forced into the Treasury
/ ON judgments. so that this matter might be
narrowed to the simple proposition
whether ii would not be wiser, il the oppor-
/ tunity offered, for the state 10 pay $l63,OOt
/ n year more than we are now paying, rather
t than continue 20 be the defendants in liti.a-
/ ton that promises TO outliye the present
generation. II will b- for the Legislature
/ to determine what new revenue can be
counted on TO produce this $4,000 PEI
annum.
In the above calculation Of bonds, those
held by colleges are not given, because not
/ in the contest. The state pays them, and IL
is supposed, will continue TO pay them the
! full interest Of $l42,OOO.
Nor are the Si.jjO,OO0 new threes. in the
| hands Of the public, included. The state
/ has no contest there, either, but is paying
on them now an annual interest Of Sl56,JO0.
/ BY the exercise Of the greatest economy
4 by searching your tax laws closely; 5y the
examination Of tax laws Of other States.
/ there may be found some new subjects OF
taxation, by which sum, greater than the
one have stated, would represent its in
terest ability. after providing for those ex-
penses absolutely necessary to carry on the
State government. But, until this il done.
it is not safe or sound TO make any compact
carrying a greater obligation than you have
in sight the means To provide for.
In concluding this portion OF my message,
| cannot too strongly impress upon you the
importance Of resolutely refusing TO enact
any legislation which will produce an in
crease in our list OF expenses. Your bill,
appr0priating the public revenue, should
show, if possible. less amount Of etpendi-
ture. The amount left, after all provision
has been made for the necessary expenses
Of the state, would represent ii fund TO be
set aside for the payment OF interest. II, by
the refusal Of the creditors 10 accept such
settlement rs the state can make, this fund
~ not used, it should if possible. be zeal
ously guarded in the form Of sinking fund,
80 as 10 enable the state to meet, with fidel-
ity, the terms Of her debt laws.
STATUS OF STATE DEBT LEGISLATION.
The provisions Of the act Of MAY 18th
1887. have been sustained without excep-
ton by the State courts. Cases, however
involving the cOnstltutlOnality Of this law,
are now before the Supreme Court. 1hey
were advanced and set for argument at
present term, but, when reached on the
docket, the Chief Justice announced that,
as they involved the decision Of constitu-
tional questions, the Court preferred 10 hear
argument before Il full bench. Their con-
siderdtiOn was passed by until the vacancy
now existing in that court should be filled
by the President. Ii is possible such APP
pOintment may be made upon the assem-
bling of Congress, and these cases argued
and determined during the present session
of the Legislature. Upon the result of such
decision will depend the necessity for fur
Their legislation. The principal questions
involved are:
First. The cOnstitutiOnality Of the act OF
May Eth, 1854, requirin. suits to he brought
against taxpayers rendering coupons.
Second. The constitutionality Of the act
forbidding expert testimony TO prove the
genuineness of papers which are who'll,
printed or engraved and not signed man.
nallv.
Third. The constitutiOnality OF the act re-
quiring the production Of the bond to prove
the genuineness Of the coupon clipped there
from.
Fourth. The constitutionaiity Of the act
imposing a tax of one thousand dollars and
twenty per cent. Of the face value of the
coupons sold upon all coupon brokers'.
Fifth. The cOnstitutionality OF the act
limiting the time within which legal pro-
ceedings may be instituted to prove the gen
uineness of coupons and have them received
fortaxes 10 within year froul the date
OF maturity of coupons.
Sixth. The validity Of the Judgment Of the
Circuit Court of the City Of Richmond, that
coupons were not receivable in payment Of
fees of the officers Of the court, taxed in
Judgments rendered in favor of the Com
mOnwealth.
seventh. The question, whether the Com
missioner of the Revenue NAV be held re-