The times-news. [volume] (Hendersonville, N.C.) 1927-current, 1933-01-16
LETTERS TO
THE EDITOR
AS TO THE DEBTS

Shyl0ck was ultliiaIeiS
opportunity to collect his pound
of flesh in lieu Of money, but
upon condition that he draw no
blood. 1t might cume to a propo-
sition that the creditors OF the
state and subdivisions be allowed
to collect their debts so long as
they do not sequester property IN
the process.
While | have a few minutes
''reprieve" from the rush of CHI
ents that have been besieging me
throughout the week, and fearing
that I might not have another
such opportunity for some time, :
desire to use this recreational pc
riod to discuss the debt problem.
As soon. however, as ordinary
business conditions prevail l Will
not need such recreationai mo-
ments for relaxation and change.
as the ordinary vicissitudes OF
business "normalcy" will preserve
my equilibrium, and l will PROB
ably not feel the urge to request
space in your valuable medium TO
such an extent as l have done IL
the immediate past.
Let me say in the beginning
that I do not believe the great
bonded debt of this country, OF
the private debt for that matter,
will ever be paid dollar for dol
lar, nor do believe that the IN,
terest upon this vast debt will
ever be kept up, pending the ma
turtles, on the present basis. 10
draw any kind of reasonable con-
clusion as to what is necessary TO
he done under such circumstances
as will result in curtailment IN
principal and interest and upon
which conclusion action is war
ranted, we should know something
more than the mere fact that we
owe more than we can pay. 1t Is
with an effort to stimulate
thought on this phase of the prob
lem that I offer the following re-
marks:
We are hearing much talk of
Reputation and scaling down Of
the principal and interest upon
our debts. This talk is being ell
gagged in throughout the length
and breadth of the land. Now, IN
the first place, let US remember
that national, state, county and
municipal bonds are dealt IN eX-
tensively by banks, insurance
companies, and corporations, who
seek to invest their funds where
in normal times they can cash in
quickly when an emergency COM
mands, and where the greatest
margin of safety prevails. OrdII-
narily such bonds have a cash
value around par and can be
cashed in quickly at their market
value.
These bonds carry a promise
to pay face value in money to the
holder at maturity or due date,
and before maturity a stated in
terest. annually or semi-annually,
and that promise is backed up by
the taxing power of the state or
subdivision which issues the bond,
and that taxing power carries with
it the right to force the property
owners to pay taxes enough to
take care of the interest as 1t
becomes due and the principal
when it becomes due, and upon
failure so to do the property own
er is subject to forced surrender
of his properly. "The power to
tax is the power to Destroy" Now,
supposing, after being guaranteed
as to payment by the exercise Of
such power, and the duty in law
to exercise such power, we ap-
proach the owner of bond and
say to him. "Sir, l can not pay
YOU what | am legally bound to
pay. You will either have to let
me off with half the amount or l
will default. Your only remedy
against me is to force the au-
thorities by the mandate of the
courts to levy a tax sufficient to
paw YOU. Well, sir, in-as-muca as
/ can not pay the tax all you can
do is to apply for a receiver.
When YOU get your receiver you
will find that he, too, can not get
the tax because [ have no money,
and, sir. you know very well that
if you dispossess me Of my prop
erty you will have to take 1t IN
as receiver for the city or county
YOU are receiver for, and IN every
case of dispossession you lower
the volume of taxable property,
so that to pursue your remedy
you would ultimately have all the
property and there would be no
one to pay taxes, and besides, if
you sought 70 get legal possession
of the title 70 the property you
would have to pay all the taxes
that were levied for the purpose
of paying your bonds and interest
on them. So, then, under such a
course would you not be in the
position of going to great deal
of trouble and expense, the end
of which might lead you to the
necessity of raising money with
which to pay off your own bonds?
If | should admit to you that this
is pursuing the matter farther
than l have any example Of in the
past. may I not call your atten-
ton to the fact that I also can not
give you an example of a similar
situation to that l am now jn?'
To all this the bond-hOlder
might answer me in this wise:
"My good friend, answer me this:
If | borrowed a thousand dollars
from you and you gave me a
mortgage on your home worth
two thousand dollars at the time
Of the loan and at tho time the