Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1892-01-15

SION with the Olcott committee for the
settlement of the debt OF Virginia. ana
that tho agreement DO referred 20 an APP
uloprigte committee 10 prepare bill 10
carry il into effect. 2. VI. MCKINNEY,
Governor.
THE REPORT or The COMMISSION
History of Debt Legislation and Details Of
the Last Negotiations.
The full report Of the commission, which
ia a valuable and carefully prepared paper,
giving the details of the negotiations as
well "a a full explanation of the character
and amount Of the States Obligations, IS
here given:
To the Senate and House Of DeegGies Of VIZ
qinta in General Assembly C0Hrened:
The undersigned. commission appoint
ed AT the last session OF the Legislature to
receive proposals for settling the out
standing obligations OF the state, and to
report the same to tho GenS raj Assembly,
respectfully submit the following;
Az we are about 20 report proposition
submitted to us for the settlement OF the
debt, which in our judgment Is far more
favorable TO the State than any heretofore
made aud as II ia hoped and believed that
lts acceptance will lead 10 a final tsrmina-
ton of the unhappy controversy when
has so long existed between the state ana
her creditors, il seems app )priate TO pass
in review some of tho most conspicuous
phases and dangerous complications which
from time to time during we'll nien the
fourth of century this question has as
sumed.
Prior TO the war the State of Virginia,
in which the present State of West Viz
cinia was then Included. contracted
debt which amounted at the outbreak or
hostillties 70 about S3J, 060, 900. During the
war West Virginia wa. cut of from the old
State and admitted as member OF the
Union, and the territory aud popula-
ton OF the original Virginia was thereby
reduced to the estimated extent OF about
one third. Both States, by tneIr constitu-
| tlons and by legislation. acknowledged
| their respective liability for Just and
equitable proportion OF the whole deot,
but no adjustment between the States
setting the amount that each should as
sumo Was ever made.
PAYMENTS of interest were for the most
part suspended during the war (thougn
| certainly through no fault on the part OF
| the State, which made earnest effort TO
apply such funds as she had in that way.
and we're afterwards only partially re-
| sumed Dy Virginia alone-West Virginia
having never paid any part OF the debt,
principal or interest.
Under these circumstances the state OF
| Virginia, by act of March 80, ISL, pro-
posed to her creditors separate ADJUST
ment of what she deemed her own indebt-
edness, which she assumed to 90 TWO
| thirds of the entire debt.
THE ENTIRE DEBT IN 1871.
The entire debt, principal and interest,
amounted at that time 10 about $4,000
600: and the States offer was to issue to
/ u g l. oraHffnrz would anTrQn0pr
| their old obligations new bonds for two
| thirds of the amount surrendered fund
| ing both principal and interest of tho old
| bonds into principal of the new, with in
terest AZ the rate of per cent. per annum,
PAYABLE semi-annually on such new bonds.
which might be registered or coupon, at
the option Of the holder, and might be
converted the one into the other at the
like option.
| should be receivable at and after maturity
flor all taxes, debts, dues, and demands
| due the State" which should be 30 ex-
| pressed upon their face.
Such were the principal features of the
celebrated Virginia " funding bill OF 1871.
II was believed by many that its passage
was due TO improper influences brought 10
! bear on certain members OF the Legisla-
ture, though il had the support or many
| men whose CuhIhCltI huu itpueh'iOh
placed them entirely above suspicion-in,
deed, OF some OF the most eminent and
respected men of the State.
| The measure was, however, predlcated
upon a most exaggerated and erroneous
| estimate of the taxable values OF the State.
| IL was believed at the time by some that
| the income under the existing rate OF taxa
| ton would be ample TO meet all interest
which could accrue under the funding
Ia trr oil ~ ha
public purposes. This delusion was soon
effectually dispelled. Within a year after
its passage about two thirds in amount OF
the States creditors accepted the terms OF
the funding BILL surrendered their old
| bonds, and received the new bonds and
| coupons provided for therein. The new
| bonds issued within that period amounted
| to something over S2O,O0O,00O, and upon
| the whole amount coupons receivable for
taxes were liable to accrue to the amount
| OF over 81 200 600 annually. III the whole
debt should be funded coupons would
accrue annually TO the amount OF over
$4,000. 900.
By the early part Of the year 1879 il had
become evident that, without an increase
in the rate OF taxation. these coupons
would absorb the revenue 70 sucn an ex-
tent that the public free schools and the
machinery of government would fail to re-
| celNt auctutlt supDDlNs 14uCCos bno HC~-
til!ty to the funding bill was SO strong
that, at the tall election OF 1871. majority
of members chosen TO the Legislature we're
bent upon the repeal OF the tax-receiya-
bic coupon feature" which was the chiei
object OF popular odium. Accordingly, by
act Of March 7. 1872. that feature OF the
funding bill was repealed.
VALIDITY OF THR RRPEALyvd Acr-
The validity of the repeating act wa.
soon subjected TO the judicial test, and
the Court of Appeals OF Virginia decided
that, as 10 the coupons of bonds funded
before the passage of that act. it was void
This decision upheld the receivability Of
those coupons for taxes. Notwithstanding
the repeating act, and also declared the
proceeding by mandamus to be the proper
remedy of the taxpayer TO compel tneii
acceptance BY the collector.
Bv q subsequent decision of the same
court 10 was held that tax-receivabie cou
pom bonds could not, after tie repeating
&C; above mentioned, be issued in ex
change for the old bonds, and the process
Of funding after the passage OF that ac
was not 80 zealously pressed.
The Supreme Court of the United state
rendered its first decision on the Virginii
debt question at the October term. 1850
The opinion of the court justified that Tea
ture Of the funding bill of 1871, whereof,
Virginia assumed two-thirds OF the indeot
edness of the old State. and referred tn
creditors to West Virginia for payment o
tho rssidue. Pull concurrence WAS Ais
expressed in the decision OF the Virgini!
court. holding the coupons OF bonds fund
ed before the repeating act TO be feceiva
BILE for taxes. Notwithstanding that act.
} The Isgislation OF the State and the DC
cisiou OF the courts In respect thereto. y
{ar q they have thus been reviewed. ope
rated TO create three olAsses Of obligation
against the State Let. The bonds will
tSs-rscsivsble coupons Issued under tn
funding bill. before the Iepealing Get 9