Evening star., 1942-09-29
Darden Urges
State Purchase
|0f U. 5. Bonds
Message to Assembly
Points Way to End
Vireinio's Debt
2, the Associsted Press.

FN the ASSOCIATED fTeSss
RICHMOND, Sept 29,-Gov,
Darden asked a special session OF
the Virginia General Assembly to-
day to licuidate the States debt OF
s18,550,67 by buying long-termS
Federal securities maturing in the
same years Virginia's debt falls due -,
'As matters stand we are unable ,
to employ profitably most of the
money which we have in hand" he
said. Meanwhile we are now pay -
ing s4S0.56l25 a year In interest q
and before our Gebt is finally paid
We shall have laid out approxt-y-
mately $500. 900 on this account n
The Governor estimated that
$4,500, 900 to s5,000,000 in interest
could be obtained on securities so,f
purchased to offset the $6,600o0o
Virginia must pay on her own debt
before it falls due. @
Would Aid Government.
In addition, he said that by pur-
chasing War bonds Virginia would
make available Immediately to the
Federal Government millions OF I,
dollars sorely needed for prosecution,
of Nthe war
In considering my recommends
tions, I want it borne in mind that
my proposal is predicated upon an'c
irrevocable commitment to the.
debt" the Governor said. ut may !.
be that the securities purchased will
decline between now and maturity.
Consequently, we cannot. with
safety. count upon using this fund.
for other PURPOSES, since the sale OF
the securities might entail large
losses. However, If held to maturity
and used for the purpose for which
purchased the plan is, ! believe,
sound"
The Governor recommended that.
the money to liquidate the debt be.
turned over to the sinking fund
commissioners for investment. He
also advocated that the State treas
urer be empowered to buy short
term paper with money in the
treasury. He said the treasurer is
no longer, as in the past, able
to employ funds profitably in time
deposits. :
Fall Due in Fixed Amounts.
Gov. Darden pointed out that the
State cannot call its debt until due
and explained that Virginia obliga-
tions fall due annually until 1865
in fixed amounts.
Against these obligations, he said,
the various sinking funds hold Sc
curities carried at $6,247,51S.23,
which. he explained. was somewhat
less than present value. These are
largely Virginia municipal bonds
and bonds of State institutions Of
higher learning, including $1,754, 800
in stock Of the R. F. e. p Railroad.
In addition he called attention to
deposit Of SIS. 600, 900 in the sinking
fund by the 1912 regular session Of
the Assembly, making something
over $11 100000.
To hquidate the debt. the Gov
ernor admitted, the State would,
| have to draw heavily on reserves.
In the r. F. a. p. stock is not used
| as sinking fund asset, he said
about 10000, 900 would be required.
most Of it to come from the general
fund since, highway bonds are
almost covered by their present seq
| regated sinking fund. He estimated
the general fund surplus would be
| $12,749,824 on July 80. 1914 lend
of the current biennium) after set
ting aside $685. 900 to cover capital
outlays which, "as things now stand
can hardly be undertaken"
Foresees Sounder Condition.
From this you can see that the
surplus remaining will not be great"
he said. However. it will, in my
opinion, prove SUFFICIENT If we are
prepared to tax as we appropriate
a sound rule, Notwithstanding
precedent to the contrary We shall
be relieved of substantial sinking
fund requirements. This year they
amount to almost three-quarters Of
a million dollars. This will, Of
course. be great help. With the
debt provided for the Common
wealth will be better prepared than
ever before to meet any difnculties
that may arise"
The Governor said the session
was called to liquidate the debt and
that he had left other matters for
later transmittal. He has an
nounced, however. that he would
recommend lowering the speed on
! highways to IS miles an hour from
the present 40-mile maximum.
The Governors message on the
debt, like his inaugural address last
January. was brief, specific and
| informative