The sun., 1893-07-09

most part incurred between the years 1S4'
and 1870. About the latter date suspicioni
were aroused concerning the validity OF o nor
tion OF Il: and the result was not only stop
| page Of its growth. but dininution OF III
amount by the Reputation OF part ana tht
sealing OF the remainder. According to the
Governors message to the Legislature in De
cember 1876. tho debt Of tho state at thai
time amounted to S41.S46.930 or this the
Legislature recognized only S21.50o.0OO, and
even these figures were cut down to s1S.Se2.'
645 in 1870, when final settlement with cred
| itors took place. The recognized debt Just
| mentioned was scaled down to So0O6.0l0. SC
that even acknowledged creditors lost nearly
$14.u0o00o OF principal, besides millions ol
I unpaid intorest.
| Previous to the war. South Carolina had con-
| tracted n debt amounting to S3.Sl4.S62. un
| to that timo her credit had been excellent and
| the management Of her finances conservative
and honest From 1896. however. until the
overthrow Of tho carpet-bag government. ten
years later, regime OF extraordinary waste
fulness and fraud prevailed. In December.
1871, committee OF the Legislature reported
that the State then owed nearly S2nOOO.OOO.
not including bonds OF the face value
Of S6.314.00O pledged as collateral security
for loans. In December 1873. So called con-
solidation act authorized the exchange OF out
standing bonds and stocks OF the State for new
bonds equal in amount to 80 per cent. Of the
face value of those surrendered. Precautions
were taken to exclude from the operation OF
this measure bonds whose issue or delivery
had boen Illegal or fraudulent: consequently.
some innocent holders Of the States paper
suffered loss: nevertheless. the act seemed to
meet with the approval Of most bondholders.
and upward OF S7.0OO.OOO had been funded
under 1t up to Oct. 81, 1875. Tho State. how
ever. defaulted in the payment of interest on
the new bonds SO that final adjustment OF
the debt did not take place until after 1880.
Georgia was another victim OF tho carpet
bag regime. but. although DIR. Scott recites In
detail the measures taken to relieve the State
from the burdens illegally or frauGulently
placed upon it. he does not state tho exact
amount OF money lost by the real or pretended
creditors On the other hand, dcflnite figures
are given In connection with the story OF
Louisiana's reputation. The latter State be-
fore the civil war had contracted and partially
paid q very large debt. This had been reduced
by 1851 to about Sl000O.0OO. and although
during the four years ensuing it had been
somewhat increased for purposes not connect
ed with tho civil war. it did not at the end OF
1865 much exceed S11.O00.O00. So reckless
was tho course OF the carpet bag fnanciers
during the next six years. that in 1871 the
total liabilities Of the State amounted to near
ly $42.000.O00. although an amendment OF tho
State Constitution had expressly limited the
States power of contracting debt to S25. .OO0.-
600. The excess over the amount permitted
by the Constitution was Of course repudiated
and. In 1874. the Legislature provided for tho
of the remainder in new bonds limit
ell to Sl5.OOOOOO and bearing seven per cont.
interest. The State was unable to pay this
rate Of interest. and eventually May 1884, a
amendment was adopted by the
people accepting the proposal of the bond
holders that interest on the new bonds should
be fixed at two per cent for the first five years
and ut four per cent. thereafter AS for Ar
kansas. she was defauter before the war;
being unable to pay interest on bonds issued
to banks. By 1859 her ante bellum debt had |
increased through arrears OF interest to S4,-
100000. OF the debt subsequently accumu- |
lated under the carpet-bag regime. tho State |
was ultimately relieved by a constitutional |
amendment from paying between twelve and |
thirteen millions Of dollars. Tho remaining
iebt OF the State was estimated by the Gov.
ernor's message in Jannary. 1885. at S4.-
$4,000. principal and interest. Subsequent
Legislatures have provided for the payment Of
he interest on this debt. and 1t is pronounced
hsHlS pTODaDly tutI Tile principal Will ult1-
nately he paid.
vas about S21 100000. During the next de-
'ade the debt was at lea st dou bed owing chiefly
o two causes. viz. The issuance of several
Millions in bonds to railroads and the accumu-
alton OF unpaid interest. By the application.
However. Of pressure to the defaulting rail-
Dads. the debt was diminished to $4,000. 600
n 1874. but oven then the State was unable to
meet her financial obligations. The debt was
but the State failed to pay the cou-
IONS on the now bonds. and. by January. 1877,
he arrears OF interest exceeded S1.5OO,OOO
Ifter long controversy between the
ondholders on the one hand and advo-
ther. final settlement was reached
a 1888 According to the law passed
t that time the debt was divided into two |
arts for which quite different arrangements
'ere made. The bonds of the first category
ere to be scaled "a 81. and 20 per cent. and
ere then to be exchangeable for new bonds
caring interest at g. 5l4. and per cent The
onds OF the second class were to be scaled so
or cent. and to be exchangeable for new
onds bearing interest at 3 per cent.
We come finally to Virginia. but 1t would re-
uire volume to follow through all Its phases
,e long-continued debt controversy In that
ent ultimately reached with the bondholders
nd embodied in bill which became law in :
ebruary. 1892. According to this agreement
ew bonds were to be issued to the maximum
mount OF $40 100000. and exchanged for out
anding obligations OF the State other than
lose held by schools and colleges. These new !
'nds were to run for one hundred years. and !
bear two per cent interest for ton years
Id three per cent interest for ninety years !
he proposed now bonds were to be exchange \
'le for the outstan ding obligations In the pro- @
'r tion OF nineteen OF the former for twenty
Rht OF the latter. There Is reason to believe
at this will constitute o definite settlement v
the Virginia debt. n
Nv. .
The two Northern States which have been y
liity OF repudiatlon are Minnesota and a
lchigan. The former. by a constitutional +
nendment adopted IN 1850. repudiated bonds q
lich had been issued to the amount of n