Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1892-01-22
The Debt Settlement.

The Debt Settlement.
Gov. Mckinney Oh Thursday sent to the
legislature special message, communicate
ing to it the terms Of the Olcott settlement
of tic public debt of Virginia. After
giving a history Of the three efforts Of the
legislature to settle the debt, by the Fund
ing bill in 1871, the McCu]logh bill of 1879
and the Riddleberger bill of 1882, he gives
the following about the proposed Olcott
settlement:
BY the settlement, UNANIMOUSLY agreed
E-lpon by the commission appointed under joint
resolution of March I, 1880, with the Olcott
committee of New Y ork, the bonds are to run
100 years from July l, 1891; due July l. 1891 !;
interest per cent. for ten years and per
cent. for ninety years, non-tax receivable cou-
pons. Principal on LIST July, 1891, of new
bonds, if all indebtedness be exchanged,
$40, 100000. Principal on 1st July, 1891, of 8
per cent bonds now in the hands of the public
and literary fund, S6,0s1 ,242. 50. Total princi-
pal outstanding 1st of July, 1891 SIS, 08 .242. 80
exclusive of bonds held by colleges.)
The total annual interest due by the State
under the settlement with the Olcott commit
tee, including interest Oh Riddleberger per
the hands of the public on October /, 1891,
1852, 1921, an annual saving of interest for
ten years to the State over a settlement under
the Riddleberger bill of sol st. which ag-
gregateS S914, 1850.
The Auditor reports as applicable for the
payment OF interest on tho public debt, from
the revenues of the State Gncluding taxes on
railroad property, about $500, 30129.
The Second Auditor reports annual dlvi-
dends on the stock, etc, of the Richmond,
Fredericksburg d Potomac RAILROAD Com
pany, S32, 746.
Amount Of revenue available for payment
of interest on the public debt, 1928 05S.29.
Amount annually required to pay interest on
the public debt" s562 437 81 Amount to
be provided for about 500, $50. 9S, if all the
bonds are exchanged at once, which is scarce
~ probable.
THE PROPOSED SETTLEMENT.
BY an examination of the joint resolution
agreement based upon the principles of the
Riddleberger bill. We do not believe we have
MA terially transcribed our powers. In as
pertaining the amount due to the cred tors we
have adopted the basis of settlement used in
elapsed since its passage, there has been a
considerable increase in the debt by way of
interest.
We agreed that $4,000, 900 should be the
maximum amount OF new bonds to be issued
| in exchange for the outstanding obligations
of the State, now in the hands of the public,
but not including bonds already funded under
the act of February IA, 1882. There were Oh
October /, 1891, S608l .242. 80 of these bonds in
the hand of the public and the literary fund.-
which with the proposed new issue, will make
the sum of $50, 0S1 ,242 so. On this amount we
will be compelled to provide annually for the
accruing interest. This appears to be an in,
crease in principal over the settlement of
| 1882. The consideration of how this principal
is to be met is postponed for hundred years.
We do not think it worth while to concern
ourselves about the financial condition of Vir-
| pinia a hundl ed years from now. We have
interposed four generations between us and
the payment of this principal. 1t is sufficient
| to affirm that unless all OF our calculations
| prove delusive, based as they are on the con-
slant increase of taxable values in the past
ten years, the State will be much better able
to take care OF the principal OF the debt then
| than we are to provide for the interest now.
| We adopte the form of the Riddleberger
BILL as far a it is applicable to this contract
with its non-5aX- paying coupons. This is a
matter OF mu;h moment. 1t relieves us of
a device, which enabled the coupon hol-
der to intercept the taxes due by the citizen
before they reached the treasury OF the State.
To prevent this has been fruitful source of
| controversy. and the suits arising from this
| subject have been the cause of forcing the
State as litigant into the State and Federal
courts. The tax paying coupons IS an lmpu-
| tstion upon the good faith of the Common
wealth and reflection upon her financial in
tegrity unnecessary and humiliatlng. Our
ople would never ratify settlement which
embraces bond with this feature attached
however favorable it might be in other re-
| spects.
| We are to pay 2 per cent. interest for ten
| years, and after that 3 per cent. for ninety
| years. Our great st difficulty Will be for the
first ten years. Our settlement we are as
sured will be the cause of bringing popula-
| ton and capital into this State. Each imm-
grant will help us to bear the burden of taxa
ion, and every dollars worth of property in
| t duced will contribute its due proportion to
our revenues.
CAN WE MEET THE INTEREST?
| Will we be able to meet the interest with
o It increasing the rate of taxation? | have no
doubt of it. See the facts
| The report of our Auditor shows that in
1880 the amount OF property assessed for taxes
Was 1904 663, 1863, in 1885 it was S347 $40 ,96, in
| 1890 it was $3.50, 531 ,8l5 In 1880 the taxable
value of our railroads was $3.50, BOG; in 1885
| the taxable value of our railroads was $751;
| 955, 924, in 1890 the taxable value of our rail-
| roads was $40, 5O0.84j With this rate of our
| increase there is scarcely room for doubt that
at our present rate OF taxation we will be able
to support the government; take care OF char
| table institutions and schools and colleges,
and our old soldiers, without embarrassment
| to our finances at present. There Will be new
| sources of revenue: the amount depending
upon the prosperity and development of the
State, which gives every reasonable assurance
| that we are not too sanguine in our calcula-
| tons, and satisfies me OF our ability at the
end of ten years to meet the per cent. rate OF
interest and at the end of one hundred years
to provide for the principal.
REDUCTION OF EXPENSES.
Upon an examination of my regular mes
sage you will see have pointed out the way
by which our expenses may be reduced thou-
sands of dollars every year. Ii you will heed
my advice and enforce my suggestions by
| proper legislation enough may be saved to
meet any increase nece ,sary Tor the payment
| of the annual interest upon the public debt.
If in these suggestions we are in error, it is a
fact about which there is no speculation that
| we have money enough now i'll the treasury
to meet any ordinary deficit, if not wasted by
| injudicious expenditures.
BETTER THAN THE RIDDLEBERGER.
| Had all the outstanding debt been funded
| in Rddleberger bonds, in 1882, the time of its
massage. except the bonds held by schools and
colleges, we would have had to pay annually
S6j3 8SS. 49, which up to this tine would be
| s. S3i 999. At. This Would have taken all OF
| our available revenues, and, without increas-
| ing the taxes, it would have been impossible
to have met our necessary expenses. The
State has saved, in consequence Of bondhold-
| ers failing to fund unier the Riddleberger
| bill. in interest, S3,5)4 S5091 This has en-
abled her to spend 81, 3S5,0S5 90 in the pur-
chase of s., 351 1860 Of her own bonds, and
| thereby reducing her debt to that extent
ages due public schools and $4,000 OF inter
est due the literary fund, 500, 0oo to her dis
| ablcd soldiers, and she has spent over a
million dollars in eniargig, improving and
| in the support of h II eleemosynary nstitu-
| lions This indispe lsable work could not
| have been done with our present rate OF ia Xa-
| ton had the whole debt been funded in 1888.
| Money which would have been paid to satisfy
the interest, the ere litors refusing to fund,
we have used III part for the purposes above