Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1891-01-02
TUE VIRGINIA DEBT.
Plan Proposed for Restoring the Credit OF
the State.
Nslc York U,orjI

change; Henry Bulge, of Hallgarten e
Co, New York; Charles d. Dlckey, Jr.,
OF Brown Brothers & Co.. New York:
Hugh L. Garden, President Southern
Society of New York, and John Gill.
President Mercantile Trust and Deposit
Company of Baltimore. The plan is as
follows:
FlrSt-The BOndholderS' Committee
shall, in carrying out the purposes of
the agreement, dated May Il, 1890, sur
render to Virginia all the obligations
deposited under the aforesaid agreement
and receive in full satisfaction therefor
such an amount of new bonds as may be
agreed upon between the said Commit
tee and the representatives OF the State,
as the maximum amount upon which
the State is able to appropriate an
amount annually for the payment of in
tereSt, which amount shall not be less
than the sum agreed upon as mini
mum by the Boldholders' Committee
and approved by the Advisory Board.
Provided, that settlement shall not
be concluded unless the Committee be
unanimous in its agreement as to such
maximum amount,
Second-The new bonds to bear such
rate OF interest and TO have such en-
emptions and to be Of such character as
the representatives of Virginia and the
Committee consider best calculated TO
give them the standing they will deserve
IN the money markets of the world.
Third-The distribution of the new
securities among the depOsiting credit
orS shall be adjusted by commission TO
consist OF Mr.. :. y. Braithwaite, ap-
pointed by the Virginia Committee in
London; Mr.. John Henry Daniel, APP
pointed by the advisors ia London, and
Mr.. Edward J. Phelps, appointed by
the BondholderS' Committee. Any va
c1ncy in said commission shall be filled
by the party appointing respectfully.
FOnrth-ThiS plan and proposition
shall include the right of the BOndhold-
erS' Committee, as agent for the depOS-
lting creditors, 10 settle pending suits
and judgments against taxpayers who
have rendered coupons for taxes, aud to
receive and deliver to the State as part
Of the outstanding debt the coupons in
vOlvcd
The B0ndholderS' Committee gives
notice that ION and after Janury /, 1891.
the depoSitaries acting under the agree
ment for the settlement of the Virginia
debt, dated May -, 1890, will not re-
ceive any further deposit of Virginia
bonds aud coupons except under special
contract with this Committee" The
whole debt amounts to about S27, 900, 900,
and the amount already turned in under
the plan OF settlement reached SEQ, 500, =
900.
The State. by act OF its Legislature
March last, appointed Commission
10 agree with its creditors upon terms
for funding its debt; but this Commits
sion was expressly forbidden to consider
any proposition unless security should
be given that when accepted by the
State il would be carried out by the
creditors. The plan of settlement will
now be presented to the State Commits
sion Tor its acceptance, and ii must sub
Sequently have the ratification Of the
General Assembly of the State. The
report OF the BOndhOlders' Committee
says:
The powers OF the Commission are
restricted to a settlement upon the prin-
eipleS of the Act OF lsS2. The essen
tial principle of that act Is. that the
amount OF the debt shall be ascertained
by stating an equitable account between
the State and its creditors. Such an
account, correctly stated, Us of this date
would lind an amount due the creditors
much larger than the amount on which
Virginia can, ut present, pay per cent.
I interest.
1t would increase the losses Of the
creditors, already too heavy, IL any set
/ clement be made which (being beyond
the ability OF the State) would presently
result in default of the interest. The
solution, therefore, OF the problem be-
fore the Committee depends, not on as
certainIng the amount actually due but
on ascertaining the maximum amount
OF annual revenue which may be safely
relied on for the payment of interest.
1.-The subject for negotiation, there
I fore, between the BOndhOlderS' Commit
tee and the State Commission, is mar
rowed TO two questions: What can the
State afford to pay? and what can the
creditors afford to accept?
"The BondholderS' Committee is called
upon to submit 10 the Commission a
proposal. This proposal involves the
authority TO surrender the bonds il the
proposal is accepted. In this case q
proposal cannot be submitted without
negotiation with the Commission upon
the following points;
/. The proportion which the debt de-
posted with the Committee bears to the
entire unsettled debt in the hands of the
public.
>. The net revenue applicable thereto
and disbursements.
| 3. The Increase In such amount which
may be aScertained by eliminating GER
tain items Of expenditure, not apparent
| ~ necessary.
4. The increase in such amount which
may be aScertained through new sub
| icctS of taxation.
>. The increase In such amount which
may be ascertained by appropriating
certain assets held by the state, in the
opinion Of the Committee, applicable
/ thereto.
! q. The settlement, by compromise OF
otherwise. If found necessary, OF the
judgments about 1900 In number)
against taxpayers who have rendered
coupons.
:. The character of the new bonds
especially with respect to exemption
/ from local taxation, and an advance in
/ the rate OF interest based on the in
creaSing prosperity of the State.
:. The surrender to Virginia, as an
entirety, of the obligations deposited in
exchange for such gross amount OF new
bonds, or their equivalent, as may be
agreed upon.
ITO state an amount, and fix the terms
arbitrarily, in advance OF such negotia-
tions would be fatal to n settlement.
To meet the Commission without author
ity, TO submit proposals at the close OF
the conference and negotiation, will be
equally fatal.
The distribution of the proceeds OF
settlement is a matter for the creditors
to arrange among themselves. IL does
not concern the State how the creditors
divide among themselves the proceeds
Of settlement; and the negotiation
should not be embarrassed by discus
sion in the Legislature of questions
which concern the creditors only, and
which can best be decided bY the credi-
tors themselves after compromise has
been effected with the State"
For the purposes OF the agreement
the debt is considered as divided into
four classes, as follows:
First ClaSS-Old bonds, to include all
securities issued under acts passed pre-
yious to Funding bill of 1871; pealors to
include all securities issued under act OF
March 80. 1871. as amended blythe act