Year: 1868




dollars Of our six per cent bonds. IL
there should be very severe pressure
in the money market at the time the loan
fell due, the State might be compelled to
sacrifice the whole million OF dollars OF
bonds 10 pay its loan OF five hundred
thousand dollars.


IL is also we'll known that this loan
could not be paid out Of the revenues OF
the State for 1868 or 1869, and probably
not out Of the revenues Of 1870. The
State would then have TO be in the mar
ket for nearly three years, borrowing
money from hand TO mouth, 10 meet It's
present July interest .


To borrow money upon a pledge OF
bonds may be justified when the bor-
rover knows that he will have the means
to pay the loan at maturity. But for q
great State to hawk its bonds about in
the money markets Of the world, from
day TO day, for at least two years, is
wholly unheard OF, is disgraceiul TO the
State, is exceedingly hazardous, aud
utterly ruinous to its credit


The only other course then to pursue Is
for the State to obtain permanent loan
to meet the deficiency of railroads in
July next. To accomplish this have
proposed that the State issue gold bearing
bonds, having twenty or thirty years to
run and redeemable in FIVE years at an in
terest of not over seven per cent, and
that il also 20 into the market and buy up
at least one million dollars Of its six per
cent. bonds, that being the amount that
fell due on the 7th Of May last and am
also in favor of buying up all the bonds
of the State that will fall due in 1868,
| 1869 and 1870, which is about 81 95l ESQ,
provided the bonds can be bought at a
profit to the State. The purchase money
to be paid by the issuance and sale Of
seven per cent. gold bonds at par. If the
bonds should be bought at their present
market price, which is less than sixty
seven cents ON the dollar, the million OF
dollars would cost the State S670, 1000.


The $670, 900 would have to be paid by
the issuance Of that amount of seven per
cent. gold bearing bonds. The operation
would, in effect, be this, that the State
would exchange a million of its six per
cent. bonds for 1910, 900 of its gold bear
/ ing seven per cent. bonds, which would
be clear and certain saving in the prin-
cipal of her debt of $330,000 and there
would also be a saving in annual inte-
rest


The seven per cent. in geld would now
be over that in currency, but OF course
when gold and currency have the same
value, the interest would only be seven
per cent. in currency. Take the period
of twenty or thirty years, the time which
the bonds would have to run, and no one
can believe that the average rate OF In
terest on such bonds in currency would
be for that period of time as much as
eight per cent, but put it at eight per
cent. the annual interest then on the
$670, 900 gold bonds would be S53, 500.


The annual interest on the million Of
six per cent. bonds bought up would be
$50 600, SO that there would be an annual
saving in interest of S6400, besides a
saving in principal Of $3.50 600


Nothing is more common than for gov
ernmeuts to buy up their own bonds.
| The United States bought up its bonds
before he war, and is almost every day
in market buying up its 1870 bonds.
The State of Tennessee has also been
constant purchaser of its bonds, very
muck presume to the surprise OF Tax
Payer" IL he will look at article three,
section ll0S of the Code, he will find
that the railroads are required to pay
two per cent. per annum on the amount
of bonds issued to them, and that this
two per cent. is to be invested in State
| bonds, and that the Governor, Secretary
of State and President of the Bank of
| Tennessee are created Board of Com
missioners, with express direction to buy
the bonds of the State.


If this policy of buying the bonds Of
the State is fraught with so much dis
honor, why has not "Tax-Payer, and
especially why have not our legislators,
who are the guardians of the honor oil
the State, removed this blot long since
The buying of State bonds is universally y
recognized as a proper and honorable
policy, and why should not the Board OF
Finance carry out the policy SO long
recognized by our own State as proper
and honorable, especially when by dong
so it can save hundreds OF thousands OF
dollars TO the State and most materially
advance its credit. 1t certainly has the
mower to purchase the bonds falling due
| the next three years or an amount equiv
alent to it, for the act creating the Board
of Finance expressly enacts that the
Board may provide for the payment OF
so much public debt as may require pay
ment within three years


The mere conviction that this imam
cial policy would be carried out caused
| an immediate advance in our bonds, and
during the severest money pressure they
have had in Now York for years our
bonds went steadily and firmly up to
sixty.nine and half cents. Had this
| financial policy been Immediately
adopted and energetically carried out,
we would have been able to have bought
up, ere this, every dollar of the million
| OF dollars of bonds that fell due the fth
of this month, and we would have peen
able to have had it advertised In the new
York papers as early as the lst ot May,
by the Fourth National Bank, that our
July interest would be paid, and the re-
suit would certainly have been that our
bonds would now be upward OF seventy
| FIVE instead of sixty-six or sixty-seven
cents. and with our bonds at seventy
five cents and advancing we would have
been enabled to negotiate our gold-bear.
ing six per cent bonds at par.


But the financial policy advocated was
not adopted, and the moment this be-
came known in New York our bonds
reacted and went down as low as sixty
four and three quarter cents, and at this
time, in the midst almost Of supera-
dundance of money in New York, they
only command about sixiy-six cents


Corrupt Inhueness.


The Selma Times and Messenger calls
.tt.-..:... ,f tha