Year: 1865




chiefly for the benefit of property, and property
should pay it,


Mr.. Borden then said:


81 desire to make an injury Of nv friend from
Gibson Mr.. Hall,) whether the section now under
consideration provides that any overplus OF the
taxes arising from the imposition of twenty five
cents on the hundred dollars valuation, shall be ap
piled to the definite object Of quidating the prin-
cipal of our outstanding State debt after the pay
mcnt of the interest on the debtl"


In answer TO tits question, Judge Hall said:
THE arrangement and only arrangement with
our bopdholders, was under the acts of 1876 aud
ls47, by which twenty FIVE cents on every hundred
dollars worth OF taxable property, and seventy five
cents poll tax, pledged for the payment of
the principal and interest CT the public debt until
it shall be entirely paid. According 70 a calculs-
ton made, if this system of taxation shall be
tinued in eighteen years the entire public will be
paid Off The committee of which am chairman,
having charge Of the subject, believing that there
was proprety in placing it beyond the power of
the Legislature to violate the pledged faith OF the
State, instructed me to introduce a section pro-
vidng that the twenty fee cents on each one hun
dred dollars OF taxable property and seventy five
cents poll tax should be annually assessed until the
debt was paid. This section was laid upon the
table, and, think, nconsiderately. l think the
matter should be placed beyond the power Of
change by the Legislature"





"Sir, on a previous occasion, desired that this
should be done; because | know that this is the
wish of the people have been sent here to repre-
sent. They do not want the subject to be left with
the Legislature, They are willing to carry out in
good faith the arrangement made with the bond
holders of the State. and to pay twenty-five cents
tax upon every one hundred dollars valuation, un-
til the State debt is extinguished; and they desire
that clause shall be inserted in the Constitution
which shall secure the application Of this oserplus
to the extingushmcnt of the principal of the State
debit


Mr.. Stevenson then followed. opposing Mr.
Howe's amendment, on the ground that taxes
should not be levied in the Constitution, and in
conclusion used these words:


"Sr. this attempt to levy an additional tax up
on the people by US is all wrong. believe there
is virtue enough in the people TO settle this matter
through their representatives in the Legislature
and much prefer to leave it with that body"
AIR. Walpole followed in speech, opposing the
adoption oil the original section reported by the
Committee. for the reason that he would DO not h.
ing TO confirm the contract made by the State with
the bondhOlders unless there was also provision
requiring the bondholders to perform their part OF
the contract.


Mr.. Mcguire followed in support of tie original
section as reported by the Committee, and referred
with appreciation to the calculation showing that
, the then existing rate OF taxation would pay the
IA u
properly applied from year to year in the purchase
Of our stocks at the market value.
Mr.. Richie then moved to recommit the sec
ton, with instructions to strike out and insert that,
"thc present rate of taxation, twenty FIVE cents on
taxable property, and seventy live cents on each
poll. shall be continued until the Indebtedness of
the State is fully liquidated."


Mr.. Richie then said:


al would remark that this is tran cript of the
report of the Committee on the subject, and have
no doubt il this course is adopted that in some hf
teen or eighteen years the public Indebtedness OF
the State will cease to exist. Under the action o.!
the General Assembly We made this agreement
with our bondholders in reference to the payment
1of the bonds they held wL.ch constituted the pub
lie debt. The adoption of proposition of this
kind will only increase the credit OF the State,
but DO away with anv suspicion that we have any
disposition to rcpudiate the contracts We have
made. We owe it TO our constituents that We
should cndeavor to erase the unjust aSpersions cast
upon them in relation to this matter. And it is
due aIso to hondholders that we should repeat
here, III this Convention, the action OF the Legs
lature in the arrangement made by which, ia some
fifteen years, will lid our State of its public
debt"


Here the depatc ended, and the original section
was adopted, both amendments being laid upon the
table.


have referred particularly 10 this debate to





reporting the Constitutional provision, and the
understanding of the Convention at the time OF its
adoption. IL seems clearly TO have been under
stood by the Convention that the Butler Bill
gurantced the continuance of the tax of seventy
five cents on each poll and twenty fxe cents on
each one hundred dollars worth Of property. until
the debt was liquidatcd, and the main subject of
discussion was whether this gurantce should be
specifically incorporated into the Constitution
he levy nd dcop Of ;6o1
for the payment Of the principal and interest Of the
d ebt guaranteed in the original arrangement
made by the Legislature with the creditors, il
would be conclusive evidence that the State and
the creditors were looking to the payment of the
principal sum as well as the interest," aud that the
State could not, in good faith indefinitely post
pone the payment Of the principal sum.


But il is equally clear. from Mr.. Buffers calcu-
lations, that he did not expect that the taxes
which were guaranteed would be sufficient to pay
the debt by the 18th day OF January, 1866 for, in
fact, by his tables the principal Of the debt could
not be paid before 1872 or 1874, and when we take
his tables in connection with the language Of the
certificate, "redeemable at any time after twenty
ycars 1t the pleasure of the State" is manifest
that Mr. Butler had no assurance that the princi
pal Of the debt would be paid promptly at the end
of the twenty years.


1t turned out, however that the basis Of taxation
was far more favorable to the speedy payment of
the debt than was contemplated by Mr.. Butler and
the Legislature Of 1886, for the average increase
OF taxable property, from that time until the pres
ent, has been, before stated, nearly twenty ono
millions Of dollars per aDDum, instead Of six mill
ions. And calculation which have caused to
be made, will show that ifthe guaranteed rates of
taxation had beer maintained, there would be in
the Treasury, ON the lst day of January, 1866, n
surplus OF four millions eight hundred and ten
thousand seven hundred and four dollars and
thirty-onc cents after defraying the ordinary
| expenses of the State Government, and the inter
est on the State debt from year to year, and it is
easy to show that If this surplus had been applied
from time to time, as it accrued, to the purchase
Of stocks at their market value, the whole debt
would have been paid by the 18th day OF January
1865.


!twas we'll understood BY Mr. Butler and the
bondholdes, in lS46, that ;hese rates of taxation
we're all that the State was able to bear at that
time, or would be able to bear for many years,
and the language Of the certificates, making the
principal payable "aftcr the cnd of 30 years at the
pleasure OF the State," shows that the Legislature
entertained doubts wuether the State would be
able to pay promptly at the end Of twenty years,
and that they did not intend to place her in a
situation where, IL she failed 10 make such pay
mcnt, S he would violate her contract, and stand
before the world as repudiatng or bankrupt.
| In 1850 the Legislature departed from these
rates Of taxation, and reduced the levy to twenty
cents on each one hundred dollars worth of proper
'ty, and Fifty cents on each poll. This rate upon
pols was continued until 1865, but the levy upon
taxable property luctuated from fifteen to twenty
cents on the one hundred dollars from 1853 To