The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-04-26
OPEN NEW MARKET
|. FOR C|TY'S BONDS
Second Auditor Page Defends
Virginia Against Charge Of
Default in Debt.
SETS EXAMPLE OF HONESTY
Accountant Crenshaw Made In
quiryANew England's I'm
favorable Laws.


Replying to a suggestion OH the part
of firm Of bankers that difficulty
would be found In marketing bonds of
the city of Richmond in certain quar-
ters because the State of Virginia nj
one time defaulted In payment Of its
bonded obligations, Second Auditor
Roosevelt Page has written n defense
OF the Commonwealth In regard to its
settlement of the public debt He de-
MES that there was ever any default
Virginia has. acted we'll" saws Mr.
Page. inclosing his statement. Tin that
through the years since the war she
has hardly allowed herself sufficient
money to maintain her government and
the necessary institutions which be-
long to civilized State. in order to
meet her obligations contracted in the
Gays or her prosperity and before there
was taken from her territory which, IN
the course of years. bids fair to be the
richest mineral area of equal extent
In the world" Further commenting
on the fact that one-seventh of Vir-
ginla's total income is now appropri-
ated to the payment of interest and
| toward sinking fund. the Second
Auditor says that such action hardly
finds n parallel I'm States, communities
or individuals. The family that takes
one-seventh of its income to meet debts
promptly. upon a basis satisfactory to
TO NISuiloTS, may we'll De thought to
set good example of honesty and fair
dealing"
Richmond Bonds Involved.
inquiry regarding the matter was
made of MIR. Page by George g. Cren-
shaw, Special Accountant of the city
OF Richmond. Mr.. Crenshaw had re-
ceived n letter from firm of BALI
more bankers. which Is engaged In
marketing per cent bonds issued by
the city. This firm inquired 1.-The date
of Firginia's first default on it's bonds.
You will recall" continued the bankers
letter. that there was 4 readjustment
| OF the debt Of the State in 1871. but we
are unable to ascertain the exact date
when the State defaulted on. it's bonds
1t seems this inquiry was prompted
by the fact that in certain New Eng
land States there are laws forbidding
savings banks to invest In bonds of
States which have defaulted. unless
such failure to pay was prior to 1861.
80 the bankers wanted the date. Mr..
Crenshaw passed the query along to
the Second Auditor of Virginia
Was No Default.
| The reply of Mr.. Page is a succinct
statement of the debt history and its
settlement. In the outset, he "beEs
! leave to say that there Is no record
OF any default In Virginia bonds. That
SO far from it. soon as the war
ended, the Virginia people got togeth-
er. and, by their General Assembly.
capitalized even the interest that was
past due under what is known as the
! act of March 9, 1866"
In 1871. the time referred to by the
| bankers. there was set aside what was
thought to be a just proportion OF the
! debt as the share of West Virginia,
AS a matter of fact the Wheeling ordi
nance of 1861 specifically declared that
the new State should take upon itself
a Just proportion OF the public debt
| OF the Commonwealth In the Con
stitution of West Virginia. ratified bv
her voters at the polls, it was required
that this debt be assumed and lioui
dated. True. West Virginia has since
repudiated it many times. but the Su-
preme Court of the United States has
upheld Virginia's claim
settlement Satisfied All.
All questions as to Virginia's liza
oiiity TO her creditors" proceeds Mr..
rage, was set ut rest by the debt
settlement of 1892, known as the Cen
fury Act whereby Virginia settled with
her creditors upon terms mutually sat
isfactory to all. which is duly evil
denced by the opinion of the Supreme
Court of the United States, ION suit
allowed to be brought in her own name
for the benefit of those holding West
virginia certificates and which was
mutually satisfactory to the holders
of the securities involved
The reimbursement period in the
early SOS, which turned the State up
side down politically. had this in it's
favor: 1t showed the impossibility OF
the impossible: and the financial
action taken hereunder was confirmed
by the Century settlement made WITH
the bondholders,"
acknowledging the receipt of the
Second Auditors letter Accountant
Crenshaw says 1T ought to clear nm
the situation and help to open a new
market for State and city bonds.