Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1892-01-05
VIRGINIA'S DEBT.
A FRESH ATTEMPT 10 BE MADE TO EFFECT
A SETTLEMENT OF IT.
Will the State Discharge It's Obligations as Tras-
tee Now That II Has Settled It's Direct
Indsbtedness?- Some Law Points
". 7. sun.

The virtual settlement of the Virginia
State debt, which now requires only an
act of the Legislature to become effect
i've and binding upon all parties, has
naturally aroused fresh interest In the
status and prospects of the deferred
bond certificates of the State. The o.
colt Committee, which devised and ne
gotiated the settlement OF the debt,
did not touch the deferred GER
tificates for the reason that they
are not direct obligation OF
the State, but are of the nature Of a
trustees certificate. These certificates,
which were issued by the State OF Vir-
GINA, represent an equal amount Of the
original bonds of the State, which are
held by it in trust for the holders Of the
certificates. They were issued in 1871,
when the State debt was funded. In
effecting that operation the State arbi-
trarily apportioned a certain part Of its
bonded debt, namely, about one-third,
as an obligation Of West Virginia,
which was part of the old State when
the bonds were originally issued.
At that time Virginia said to her cred
itors that she would give them new six
per cent. bonds for two thirds OF their
claims, and a deferred certificate for
the other third, which was claimed to
the approximate amount that West Vir-
ginla should pay. The terms of the set
element were that the State should keep
one-third Of the old bonds surrendered
to it alive and uneancelled, and that it
should act as the trustee or agent Of
the holders of the deferred certificates
issued therefore in effecting a settle
ment with West Virginia. Each State
has appointed at various times commit
tees or commissions TO negotiate the
matter, but nothing has come OF their
desulitory efforts.
The amount of deferred certificates
issued is nearly S12, 700, 600, of which
about $40, 200, 600 is la the hands of the
public and the remainder is held by the
State. The public holdings are mainly
In this city, though few of the certii-
Gates are held abroad. For the purpos-
es of concerted action the great major
ity Of the bonds have been pooled for a
number of years. The amount so pooled
is about $780, 900, and the Farmers
Loan and Trust Company is the
custodian of it. Every effort that
has been made of late years to
induce the State of Virginia to discharge
the obligations of the trust which she
herself created has provoked the reply
that the State could not with good
grace, or logically, proceed against q
sister State to collect an indebtedness as
long as she herself was in arrears on her
own obligations. The State officials
have promised all along that whenever
they should succeed in settling their
own debt they would then be in posi-
ton to proceed against West Virginia
and would do so. That time now seems
to be at hand, and consequently the
holders of the deferred certificates are
naturally beginning to look after their
interests.
That the State OF West Virginia is
beholden for part OF the principal
represented by the deferred certificates,
and the State of Virginia for the bal
ance, and that the last named is under
obligations as trustee to enforce the
claims of the deferred certificate hold
ers, appears clear from the record.
When Virginia adopted her present Con-
stitution in 1869, she declared in that
document that: 1.-THE General Assembly
shall provide by law for adjusting with
I'D hn ~ al
public debt OF Virginia proper, to be
borne by the States of Virginia and
West Virginia" 1t will be observed
that this provision of the Constitution
is mandatory.
West Virginia recognized its obliga-
tions in the premises when it adopted
its constitution In 1853 in the following
article, which was ratified by popular
vote San equitable proportion of the
debt of Virginia, prior to Jan. l, 1861,
shall be assumed by this State, and the
Legislature shall ascertain the same as
soon as may be practicable, and provide
for the liquidation thereof by sinking
fund sufficient to pay the accruing in
terest, and redeem the principal within
thirty-four years"
The question came up in Congress
when the bill providing for the admiS-
sion of West Virginia into the Union
was being considered, and it was an
swered partly by the article Of the Goa
stitution quoted above, and also by the
second section of one Of two ordinances
adopted by the Wheeling Convention,
which put into operation what became
known as the Restored Government
of West Virginia" This Convention
took the first steps toward organizing
West Virginia as State. and
the section of the ordinance
adopted by il reads as follows {:
1.-THE new State is to be charged with
all expenditures by Virginia within her
territory, and with just proportion of
the ordinary expenses OF the State Gov
eminent since any part of the debt was
contracted, and credited with the
moneys collected within the same per-
Tod from the counties composing the
new State"
The obligation OF the present State
of Virginia to act as a trustee for the
holders of the deferred certificates is
set forth on the face OF those certifi-
Gates, which were issued from the
Treasurer's Office under the Funding
act of 1871. The certificates read:
This is to certify that there is due unto
800. 81, being one-third Of bond No.
..., surrendered under the provisions of
an act, etc, and amounting TO g..
Payment OF said one-third will be pro-
vided for in accordance with such settle
ment as shall hereafter be had between the
States of Virginia and West Virginia in re-
gard to the public debt of the State of Vir-
ginia, and the State OF Virginia holds the
said bond, so far as unfunded, in trust for
the holder of this certificate"
The bonds which have been pooled in
the Farmers Loan and Trust Company
are represented in negotiations with the
State Of Virginia by committee con-