Year: 1865

T contracts we have made We owe IL TO
j our constituents that we should endeavor
I to erase the Unjust aspersions cast upon
them in relation to this matter. And il
i is due also to our bondholders that we
should repeat here, in this Convention,
the action of the Legislature in the
rangemeut made by which, in some
! fifteen years. we viii rid the State OF Its
public debt"


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


| have referred particularly TO this de
bate to show the views entertained by
the committee reporting the Constitution
+ al provision. and the understanding of
the ConK ention at the time of its adop
ton. Il seems clearly to have been
understood by the Conv ention that the
Butler Bill guaranteed the continuance
Of the tax OF seventy five cents on each
+. poll, and twenty five cents on each one
hundred dollars worth of property, until
/ the debt was liquidated, and the main
subject of discussion was whether this
guarantee should be specifically incor-
porated into the Constitution.


If the levy and continuance of
specified tax for the payment OF the
principal and interest of the debt was
guaranteed in the erigina! arrangement
made by the Legislature with the credi-
! tors, it would be conclusive evidence
! that the State and the creditors were
/ looking to the payment of the principal
+. sum rs well as the interest. and that the
State could not, in good faith, indefinitely
postpone the payment of the principal
+ sum.


But ii is equally clear from Mr.. Buffers
calculations, that he did not expect that
the taxes which were guaranteed would
be sufficient To pay the debt by the 10th
/ day of January, 1866, for in fac., 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
( wears at the pleasure of the State it is
manifested that Mr.. Butler had no as
surance that the principal 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
i Legislature in 1916, for the average in
crease of taxable property, from that
time until the present, has been, as
before stated, nearly twenty one millions
Oi dOiItIS pei iIlIulAi. lHSttat VI DIN
millions. And calculation which l
+ have caused to be made, will show that
/ If the guaranteed rates OF taxation had
been maintained, there would be in the
/ Treasury on the lst day of January.
! 1866, a surplus of fonr millions eight
/ hundred and ten thousand seven hundred
/ and four dollars and thirty one cents,
/ { 54,Sl0,I I04 81 after defraying the
ordinary expenses of the State Govern
ment, and the interest on the debt from
I 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 pdr-
chase of our stocks at their market value,
the whole debt would have been paid by
the 10Th day Of January, 1866.


1t was we'll understood by Mr.. Butler
and the bondholders in lSi6, that these
rates of taxation were all that the State
1 was able TO bear ut that time. or would
be able to bear for many years, and the
language of the certificates, making the
principal payable safter the end of twenty
wears at the pleasure OF the State
. shows that the Legislature entertained
doubts whether the State would be able
to pay promptly at the end of twenty
wears and that thev did not intend to
place her in situation where, if she
failed to make such payment, she would
I NIOl1tt DeF contract, anu SldUu neIcTt
the world as repudiating or bankrupt
In 1882 the Legislature departed from
these rates of taxation, and reduced the
levy to twenty cents in each one hundred
dollars worth of property, and fifty cents
on each poll. This rate upon polls was
continued until 1865, bat the levy upon
taxable property fiuctuated from fifteen
to twenty cents on the one hundred dol
lars from / $50 to 1861


In 1852 the Legislature passed an act
creating the State Debt Sinking Fund.
and leyying q tax Of two cents on the
one hundred dollars t.for the reduction
and ultimate extinction of the public
debt


This fund was placed under the con-
troll of three commissioners, consisting
of the Auditor, Treasurer, and Agent
OF State, who were directed to invest the
proceeds of the tax from time to time
in the purchase of the two and half
and five per cent stock. The interest
on the stocks thus purchased
was to be paid semi annually to the
Commissioners, who were TO invest the
same in similar stocks, and thus create
Sinking Fund for the ultimate redenp-
tion OF the stocks created by the Butler
Bill


In 1857 the Legislature failed to levy
any tax for State purposes for the years
1857 and 1888. and for those two years
no revenue was collected. In 1859 an
act was passed instructing the Auditor
of State to sell the stocks which had
been purchased by the State Debt Sink
ing + und 20 the Board of Com missioners
of the Sinking Fund, in order to raise
money TO defray the ordinary expenses
of the State Government, and to supply
the deficiencies in revenue growing out
of the failure to levy and collect taxes
for the preceding two years. This act
being held void for want Of title. the
Board of Commissioners of the Sinking
Fund refused 10 act upon il. but the
Auditor of State treating it as an in
struction. sold the stocks in open market
and put the money into the treasury. At