The Atlanta constitution. [volume] (Atlanta, Ga.) 1885-19??, 1894-07-09
SOUTHERN CREDIT.
THE CREDIT OF SOUTHERN STATES
NOT INJURED By EEPUDIATION.
Reply to the Attack of Mr.. John #. Hume
in tho North American Review,
by Mr.. Clark Howell.

| by Mr.. Clark Howell.
The following appears in the current issue
| of The North American Review, in reply
| to an article by Mr.. John T. Hume in the
| last issue of that famous magazine, In
| which the credit Of the southern states
| was attacked. The editor of The Review
requested Mr.. Clark Howell to reply, and
his answer is as follows:
II the conclusions OF Mr.. John f. Hume,
IN his ghastly exhibition of the decayinS
remnants of Our Family Skeleton" in the
current issue of The Review, are correct, 1t
1olloWS that two things are true:
rIFSt, that the credit Of the states OF the
south Is now below par, compared with
that of the states of other sections, and
Second, that this condition, If properly
stated, is the direct result Of the past re-
pudiation by the states of the south, of
large parts of their bonded indebtedness,
which Reputation is the skeleton that Mr..
Hume drags from the southern closet, and
fiaunts in the eyes or capital as a menace
to divert 1t from the channels of southern
Investment.
II, therefore, it can be demonstrated that
the credit Of the southern states is not only
as good, but better than that of some
states which have no record of repudia-
ton, and that, as a whole, the credit OF
the southern states bears favorable com,
partson with that of the states of any 9TH
er section of the union, then it follows that
"our family skeleton of reputation is no
longer efticacious for the use TO which Mr..
Hume would put it, toWit: As d scare-cr0W
20 brighten capital from the field of south
ern investment.
In the first place Mr.. Hume does mot corr
rectly express the sentiment of the south
ern states in his effort to make it appear
IT a6 tO cd n q
the question, and that ''to many southern
people the subject is rather delicate one"
He deplores the fact that the southern
governors who recently conferred at Rich
mond. Va, for the purpose Of calling at
tention to the advantages offered to capt.
tai In the development OF southern
sources, omitted from their proceedings an
inspection of the skeleton, and eXcusinS
their reticence ON the ground that the sub
ject was a tender one, ne justifies his at
tack on southern credit by the statement
that he docs not feel bound to follow their
example"
In the commendable work put ON foot by
the southern governors at Richmond, the
question of repudiated state bonds was not
considered, because such discussion was not
one of the purposes of the conference, not
because the question was q, distasteful one,
but on account of the fact that the praise
worthy effort Of the southern governors
to invite the attention Of outside capital to
the rich fields of undeVelobed resources IN
the south was based on abundant evidence
that the dsestablshed credit of the south,
resulting from the chaotic condition follow
ing the war, was thoroughly re-establsh-
ed, and that confidence in southern s3curi-
ties was now regulated by the same condi-
lions that controlled the estimate of the
credit of any other section, the prime fac
tor in which is the security OF the obliga-
tons offered not under past, but under eX-
listing conditions.
II, as Mr. Hume holds. 1t be true that the
reputation by the southern states Of bonds
issued contrary to law, many Of them ad-
mlttedly Illegal, unconstitutional and worse
than that, Tnonstrously fraudulent, has in
jUred the credit of the southern states, this
would, at once, become evident by public
discredit Of the securities issued since then,
the value Of which, according to MIR.
HUple's theory, would be manifestly below
that Of the securities of states whose credit
had not been injured by reputation. And
yet find that Alabama per cent inter-
est bonds are quoted in New York at from
100 to 105; Florida 6s at 1877; Louisiana As
at 49, North Carolina 60 at 1877; South Car
o!ina AIS at from % to 100; Tennessee (set-
uenen) IS, at 105 and Georgia 415s at
from 10 TO IL. Among the states which
have not repudated Connecticut 3l5s
are quoted at 100, Maine So
ct from 81 to go Massachusetts IS at I0Gh
to 10T. Rhode Island SIS at 100
There has not been an issue of Georgia
bonds n The past ten years which was
not readily disposed of in New York at
terms strongly expressive Of the good estl-
mate that capital places on the credit Of
the state. AS 4 is with Georgia, so it is
with other southern states, the credit Of
which, undcr the new order OF
things established with the re-
organization OF affairs after the re-
construction legislatures had sapped the
vii y "a
readiusted to 3 normal basis, gaining
strength yesr after year in proportion to
the degree Of recovery of the states from
the rude shock of war.
Those who are not familiar with tho facts
cannot appreciate the condition IN which
the south was left after the war. With
it's assets haIved, its debts more than
trebled, commerce Frustrated ard its social
condition placed on q, new basis, the bur
dens OF the southern states had In few
years increased in more than treble
proportion to the decrease of their strength
TO bear them. Had conditions not been
SO materially changed by tbs war, I be
heve that the south would have cleared
Itself entirely Of the record OF reputation
by paying dollar for dollar even for the
proceeds OF the bonds which were Unc0n-
stitutional and unauthorized or by arriv-
ing at a satisfactory settlement with the
bondholders, even had 1t become necessary
to go 10 the extreme adopted by Minnesota
of clearing its record Of regulation by u .
compromise settlement Of so cents the
dollar. At the beginning OF the war almost
every southern state had just about as
heavy 6 load as it was possible to carry.
But their obligations would have been sat"
isfactorily disposed of il due time had
rot the war precipitated i condition which
forced a different treatment of the question
than would probably otherwise have been
adopted. In this connection statistics throw
valuable light on the strikingly dispropor-
Tomato development ia the tremendous de-
crease in the taxable basis OF the south
between 1860 and 1870, and the enormous increase
in the bonded indebtedness OF the some STAGES
during the period which was the era OF
germination and development Of most OF the
repudiated bonds. The first o. the
following tables Is taken from the valuable
treatise on ''Repudiation Of State Debts
by Professor Scott, of the chair OF political
economy OF the University OF Wisconsin,
and the second from an article of Mr.. X.
P Porter In The international Review
Fall in Taxable Basis OF the Southern
States.
Per CT
of
1860 1870 dec'ase
Virginia. :. :. $685., 02i 1886 $685., 916 1910 %
North Carolina. 292, 297 6G2 130378,190 $50