The Daily times. [volume] (Richmond, Va.) 1886-1889, 1889-11-02
DEAD In THE PIT"
MALONE WAS WILLING THAT VIR-
GINA SHOULD BE SOLD OUT
Under the Hammer-Hc Pledged His Com.
mission-His Campaign Fund Was One
Hundred thousand Dollars short--"My
Party IL the Negro Party"

Under the Hammer-He Pledged His Conn
mission-His Campaign Fund Was One
Hundred Thousand Dollars short--"My
Party 10 the Negro Party"
spondencc II the Uorid. shy party is the
negro party" said Gen. William Malone,
the Republican boss of Virginia, who eN-
poets 20 be elected Governor on November
5. "rhc negroes pay no taxes, and they
don't care how much the whites pay"
| Mr.. Charles Scoyell. OF the Union Bank,
late holder Of several millions in Virginia
cons0s. told me to-day that this is the plat
form on which Malone stood when he stroye
| TO be re elected 10 the United states Senate.
| II wonder. added the banker. ''what
kind Of deal he has with the bondholders
| this timer"
MALONE HAS FRIENDS IN LOMBARD
| STREET.
| Then the banker made 10 me what is. at
this time especially. startling revelation
Of the manner in which Malone has plotted
| 10 .'knock down" poor old Virginia 20 the
| highest bidder. The facts come out in the
most natural way possible.
Probably twenty millions Of the Virginia
I-bonded debt il in the hands of London bank
ers. Having in mind the approaching cleo
4 llDn III lit Viu 1fDilllUipfi. anu
| the threat Of an attache OF the Commission
Of the Council Of Foreign Bondhoders.
when is efforts Of 1881 10 get settlement
| had come 10 naught. that he would "appeal
| 10 Malone and the Republicans took a
turn in Lombard street TO see if there were
any flying straws telling the direction Of the
wind.
Within a distance Of less than two
squares from "the Old Lady Of Thread
needle street there are half a dozen bank
ing houses. more or less, heavily loaded
| with Virginia bonds. Among them. Barring
Bros. and Rothschids are prominent. ]
was not disappointed. Not only was the
! fact of the approaching election generally
understood. but its outcome was awaited
with evident interest. not 10 say anxiety.
Having unlOaded his holdings Of Virginia
bonds on the last upturn Of the market, my
banker friend risked nothing in making the
disclosures here given in his own words.
| MALONE CAN SETTLE THE BOND CUES
TION.
"The situation in Virginia il a. intricate
as it il interesting. II IL a story OF money.
The Democrats of Virginia dare make no
| treaty with the bondhoders while Malone
lives and the danger of negro rule mcnaces
them. Under certain political conditions
Malone could settle the debt OF the STATE !.
the satisfaction Of its creditors. lie tod
our agent. who visited him in 1871. how thls
could he done. and offered tOpledge his COM
mission as jnited states senator on llH dc-
cOmplishmont.
"NIaitcrs had gone on from bad To worse
eyer since the war. The history of these
bond, was history of continued scaling.
repudiatiOn and other legislation inimical Ia
fhe bondhOlders. I'm 1861 the debt WIS ST.
OOOOOO. with $l,OOo.OOO of interest past due
I'm 1863 West Virginia was admitted as a
sepcrate State and the debt stood at S'i3.OW,-
OOl In 1871 there was a strong sentiment
i'm favor of giving the hOndhOldcr- their due.
One-third Of the total Indebtedness was set
of for West NNginia's portion and the bal.
ance principal and interest, was funded
into $50. 5000 Of coupon and registered
| bonds bearing per cent. interest. The con.
pons are tax receivable. Under this ar
rangemcnt the annual interest was about
II 500. 900. The people declared that II was
an honest debt and ought to be paid.
VIRGINIAs BURDEN Is HEAVY ENOUGH
.rhe burden was too heavy for the state
in her impoverished condition to bear. II
the coupons had not been tax receivable
very little Of their interest would the bond
| holders have seen. IIy quoting the coupons
at 60 or - cents on the dollar they were dis.
posed of readily to the taxpayers 50 read
ilv. IN fact. that the state soon had no IN.
come 10 speak of except coupons for cancel
lation. one year there was not enough
money in the treasury TO pay the salaries Of
the state officers.
.Some -. 600. 600 of the Indebtedness had
been funded under this act when. in l>.2
the Legislature passed a law repeating the
tax-receiNing feature of the funding law
According 10 this law taxes were payabl,
only i'm gold and silver. grccnbacks, and
National bank notes. This left the bond
holders with no means Of collecting thcil
interest, for state cannot be sued by pri
vate individual or corporation. and tho
Treasury was empty. In the case Of Anton
against Wright this repeating act was de-
cared unconstitutional. but iTeparable in
Jury had been done the coupons rs cur
rency. and the amount Of overdue interest
increased rapidly. The situation Of ihOSC
holding the SlO,OOO.OOO of unlunded bOnds
was no better The Mccullough bill Of
1879 gave no relief except 10 the spectators
who had political influence. This bill pro
Vidcd for the conversion of the debt into ten
forty bonds. bearing per cent. for ten
years. per cent for twenty years and j
per cent. Tor the remaining ten years. You
will observe that the promoters of this Bill
recognized the fact that Virginia had ne.
covered from the war shock add was in
creasing steadily in wealth. About $1,000
900 of these bonds. with taN-rccciyable cOI-
pOns, were taken and are still held.
M,HoNE's HAND SEEN.
at was not long after this that Mahone's
hand began 10 be plainly seen. The Riddle
berger bill was passed. scaling the debt
down 10 S2l 100000 and making terms.
which. since no bOndhOlder would think of
accepting them under his contract. could
only be- regarded in the lignt of
proposition for a settlement 80 many
taN-reccivable coupons were still coming in
that there was not enough money 10 run
the state. Then the law known as coupon
killer No. L was passed. making il neces-
saIy for those presenting coupons to identi-
ty them by presenting the bond also. An
| other law was passed declaring IL "A felony
10 present the same coupons twice. Thus.
a coupon which had been currency would
| be presented by some one who had never
seen the bond. and accordingly refused by
the state. whereupOn the coupon would be
dead since the holder could not again pre-
sent il without making himself liable 10 ar
rest as 2 lelon. This state of things still
| prevails.
TIE COUNCIL OF BONDHOLDERs.
In April, 1887. joint committee of five
from the House and senate was appointed
10 confer with the Commission representing
the Council of Foreign Bondholders. sir
Edward Thornton. G.. {. b., and Mr.. :. y.
l'raithwaite constituted this Commission.
The Joint Committee, after exhibiting the
income and expenses of the state. offered
the Riddleberger bill rs "A basis of settle
mcnt. This the Commission refused but
after some further negotiations proposed a
settlement contemplating the payment of
Syop,oO0 "A year interest. The Joint Com
mittee responded by proposing negOtia-
ton upon terms embracing all the bonds
held lay the state. which. with all other
outstanding bonds, would make oil an
nual expenditure for interest of about
$l2oOpN. The Commission would not
accept this proposition. but replied
with the following: Principal - Con- !
suls, coupons and interest in consols |
and ten-forties Sl1,5iS,Oo0; tcn-iorties. ST. |
39Ooo0; other securities 10 be funded i'm |
Riddlebergers. S2,95O0O0; Riddebergers in |
the hands fthe public and in the literary |
iund' Si,620,OoO; total principal, 322OS.OOj. |
Interest on the l0-iOs, - per cent, and on
The balance, 2 per cent; total annual inter-
est. 1854. 5Si.j0. The Joint committee gave