Newspaper Page Text
sirmmmr m the mamebum sews.
MESSAGE OF HIS EXCELLENCY GOVERNOR F. J. MOSES, JR., TO THE LEGISLATURE OF SOUTH CAROLINA.
ORANGEB?RG, C,f OOTOBE?, 1873.
ow-citiztixs of the Semite ami
//phw of Iiepvcsentativc*:
I liavo palled together your honorable
bodies by virtue of tho power vested in me by
10 constitution of the State, which authorizes
e Governor, M on extraordinary occasions,"
to con veno tho Goneral Assembly.
1 have been impelled to exercise this power
my sensu of public duly.
Tho occasion is nn ?'extraordinary " one,
nnd its responsibilities, which attach alike to
tio Legislative and. Execntivo departments of
tho Stale governmoul, will be met, I trust,
with a strict regard to the interests of the
peoplo at htrgo, from whom they derive their
Certain bond creditors of tho State, holding
representing bonds of several classes hnv
ing, in tho last resort, appealed to tho Supremo
Court to pass upon tho validity of tho State
securities held by them, nnd to n lib id them
the relief lo which they deemed themselves
entitled, tho court hnvo decided tha.t the bonds
in question nro valid, nnd (hat the comptroller*
genera! shall, " in obedience to tho constitu
tion nnd laws," levy a tax to pay tho interest
u tho said several classes of bouds, such levy
to bo made before tho 15th da}' of November
proximo, tho rato per centum of the tax to bo
thus levied to be adequate to liquidate tho in
terest past due, and also that for the present
This mamlamm covers th e classes of bonds,
mounting in the aggregate to $i),54p,C00,Dve
undrod and forty-tlve thousand of which
ave been oxchauged for conversion bonds,
nd are now outstanding in that form.
This docisiou of iho highest judicial tribunal
of tho Suite, thus invoked by n portion of the
ublie creditors, would seem to admonish the
State government that it should, without de
lay, provide.,for tho liquidation of its whole
bonded debt, upon some practicable basis of
adjustment,?honorable alike to the State and
its creditors,?or prepare to witness proceed
?ings, on tho part of those who hold its securi
ties, which must evonluuto in stamping the
State?by tho docrees of its own or Federal
Mirts,?as totally wanting in regard for
private rights or public faith.
If tho Uenoral Assembly could, by nn
instant exercise of ils constitutional powers,
destroy every bond that bears- upon it the
impress of the great seal of the Slate, they
would thereby confer u very great present
beuetit upon tho'entire people, but it would
be, at the same time, an net of monstrous in
There is o tribunal ln'forc which Slates are
judged, as well as Individual*.
It is the tribunal of public opinion.
The verdict of Impartial and inexorable his
tory is mnde up from the expressed judgment
of fair minded men, delivered on current
bet not that verdict be, that the govern
ment of South Carolina?based upon a broad
recognition of the rights of man?contracted a
large public (lobt to provide for its muinto
uouce tu the hour of it* weakness nnd remorse
lessly repudiates that debt in the (toy of its
While I do not. for an instant, assume that
any honorable Legislator would avowedly' re
pudiate any obligation of tho State, yet it
must bo patent to the world that to refuse, or
to fail to provide, the means for liquidating
the public debt, is. iu effect, to repudiate it.
Further delay to act iu tho premises, by
meeting the just demands of our public credi
tor, to tbo extent of our ability, without im
posing a grievous burden on the jreoplo, ja to
tlx upon .Sunlit Carolina the stigma of repu
diation, widen must indelibly mark herns the
shame and opprobrium of American States.
1 would, however, deem myself unmindful
of the high trnwt Unit I boa! from the people,
and which they hove also conferred upon you,
fcllow-citizcna, as their chosen representa
tives, if I were to adviso that the debt of the
State should be liquidated at its I'm! ascertain
The Suite satisfies tlio demands of honor
and good faith when it does nil that its cir
The existing bonded debt represents, iu
great part, tut exemption of the people from
high taxation during tho period of four years,
commencing in 1 s<;8.
Its liquidation confers upon us vast re
sponsibilities and solemn duties.
These respousibiliihsaiid duties we cannot
delegate- to others, but we must uct neeorJing
to our best understanding, confiding hi the
integrity of our unlive, and in the just judg
ment of the people, nhi m right* and obligation*
are alike iVpratente < l<y lie Government of the
A further and importni I ?oisideralion that
has induced nie lo coovitn your honorable
bodies in extraordinary :<.r:iia is that the
act, which 1 have seen by mi journals, was
passed and ratified nt y Mr I irni it lud session,
withdrawing from the h to n I c l|ie cvmp
troller-general nil authority to ordor any tox
levy, has never reached this department, and
hence, lias not brcomo a law, ns wns intended
l>y tho General Assembly.
Tho decision, thorefore, of the Supremo
Court, requiring the comptroller-general to
order tho necessary levy to pay tho interest
on the adjudicated bonds, on or l>o(ore the
15th of November proximo, would?if your
honorablo Itodies had not been convened?
have been imperative u|>on tho said officer,
aud he would thus have exercised a power
under tho operation of a statuto which tho
Isw-makiug department of tho State govern
ment hud clearly shown their purpose to re
I therefore thought it proper that you, as
the representaiivcs of tho j>ooplo in your leg
islative capacity, should be afforded the oppor
tunity in season, nfter further reflection, of
alllrming your previous action iu the promises,
rotlecling, as 3*011 do, tho aired expression of
the popular v.ill.
For your information, and for that of tho
people of the State, I have mado a thorough
and exhaustive examination of the various
classes of our public debt, and have prepared
tabular statements exhibiting tho true status
thereof. Iu this woik I bavo been ably
seconded by tho unremitting labors of Mr.
Wultcr It. Joues, clerk of the Financial Donrd,
to whom I take this public method of return
ing my thanks for his valuable assistance
U is due ulso to the honorable the treasurer
of the Slate, and to his efficient book keejier,
Mr. T. J. Minimi, that I should Bay that I
have been afforded every facility iu making
this investigation, aud that I have obtained
reliable nid from them iu acquiring the Infer*
Kvery piece of stock, or bond, cancelled aud
tiled in the treasury, which Ims liecn re
deemed, or for which conversion stock or
bonds have ln-eu exchanged, has been sepa
rately aud carefully examined; its number
and denomination noted and compared with
tho Tro'isurer's registry of bunds mid stocks
convorted. liy eliminating fruit) tho bunds
und stocks outstanding August 1, I808, and
trout those printed since that period by
Messrs. Murphy's Sous, of Philadelphia, and
the American Bunk Note Company, of New
York, such as have been convorted and can
celled, or cancelled unutfid, I hnvo obtained a
complete registry ot tho bonds and. Stocka
outstanding at tho present time. The follow
ing statement will exhibit the present condi
tion of the bonded .debt:
ANTE-RECONSTRUCTKhN BONDED DEBT.
Statement of the "Bonded Debt August 1, IS'IS, Showing fh .!<.?? ?' of Eich Clan* since Qcm?*rf*tt
OuMllrt linit n. i?',ri\ Ul'.i.
>r Tteite.rmeil and the ftalunce
? Hcglatered Stock...
Begist. i. 1 Stock...
It. iglatered Stock...
Be glatered Stock...
f \ 11 K It
K.IK WHAT Pt'l:!' ?-.K
,.? ItcvMutiuiiary Wut .'Inn. . At
.j Charleston Vir? tonn.?
('oll-'.l 11. li.'ll NcM SllltO llutlhV.
Juno 1, 1KW.
1).'.'.?ml..t '/ii, ISM..
Dtcemtwr 21, 18T.7.1Oonutruction New Stuto Hon?..
I December 21, lic.s
December 21, isam.
December 22, IHM).
I December 22, 1K/vj.
He>;im<red Stock... January 22, I Hfl I.
.Registered Stock... January 22, l??;i.
"egiatered Stock... February fl, I8C3.
Obrurirnciion Kovf Slate House.
. Count ruction New Slattt Hon?c.
Conati'iii ll..n New Stute Hiataa.
(Juoatructlou New State llouae.
Construction New Slate lloum-.
Ooiwtfnctlon New St?le llouae.
Coiistrui ll.ui New State lloii?<>.
Utenxl Stock...^SepterolH-r itn.l December, INK... Funding dial Hue lutcn-at hii.I I'tluciiul..
Ida.I June 1, 1R38. Cb,"rlf?>ton Klre l,..;iu.
December, 18.13..Oonatrhetlun N.-w sti?te ll.>n?u.
December, 1-'.?">.Construrtion New Statt, House.
December. lHflfl. OOMlrOCItoil New State llouae.
December, VNA. Aid to Blue IU|lg\? lluilr.md.
in. .n.l... l&'.l. Aid to Itlue Ridge Railroad.
i December, 18.M. Aid to ?lue UM?.. BaltrMd.?.
'December, 18M. Aid t<> UJlto UMgo lUllr.?u<l.
Deceir.lx.r, l-M. Aid to lilac Holge ltuili\wd.
September ami December, lK?'.fl..i Funding |*u*t Hue Intern! and Principal.,
September and Dccuntber, ISflO..: funding I'd Duo Intercut und l'i in. I|?l.
Mir. I Ml)'
.-??I.U >i ou
2? 0,000 no
U i.f-1 i ?I
484,444 ftl j
hm.tr-. > RR
Baa Neil st.i. in. in
im?,4. ki oo
1-1 '.Ml 61
iSo.olo.iHW Sa)t?SBtTiT SI ?212.000 ?of*l.T?,1.7n hi
POST-RECONSTRUCTION BONDED DEBT.
.Statement of Ante-Recount ruction Floating Debt ami Debt Fumlabte. under Ada September and December, IBM, Funded from
L Auijitst 1, 1808, t? October, 187?.
FOB WHAT I'UBl'OSr..
Scpt'lior ami D.-c'r, lKlMI.. Kuti.llng I'ant Hue Int.iui.i Hrlii.THIfll 0 ?f.'.J.flM \n
Svpt'bcr ami Dec'r, lHflfl.. Funding P.iat Hue tat.mid Tiiit |H87| 0: ll.l.iKMi (o
Sept'beraud Dec'r, lUCfl.i rtinding 1'itat Duelnt.und Pilo. I.-D7 i: Ul.UtO to
Anguat 2(j, l8tw. Redemption tHlkUaM&frablc.... 18SS 01
Augiut 20, 1808. I'avm. i.l lUUrcal I'litdl. Debl..|!88S fl
Sepuuiber 16, \WM,.!Fumllug Hllla Bonk Sfl.lc.18K8| 0
B^vm en ?7,000 1*9/100
O^ao oo] foot! 82,tjui
IVHUIOO 00 S?KVI0I) (JOi H^M) (O
78.1,410 041 7*5.410 Oil
l/.'.)0,iKai (?)! l,2M),(i>.l uO
4*4.000 rio i
T2,?00 l.iso.flon oo
C0.4U) Oo WPUr\
8280/^4 (r.':?2.87.'.,41? (Wi?2^4,4Hi Cflj $16?.77:i 4l|rMil UK)! ?1*4,0001 tJ,T4S.*.?o Co
?Printed by Muii>1iy'H Soiut, PbiUdelpllia,
fin banda of Klnti>lou.
Totitl Ktmdiag Stock Iaaueil, ft40,2S7X:
Total Couvertpd, ?flfl,87:?.4!.
Balance, 870,4 M 04
SECOND SUB- DIVISION.
ilatement of Bonded Debt Created ? by llrconstructcd Uov rnment from August 1, 1868, to October, 187:5, and Bonds ami Stocks
Issued to Vhungei Form of Bonded Indebtedness,
ISSU K D.
March 23. IMCO.
Anguat SB, 18t?...
rettruary 17, IN Hi.
Marcft 2.1. lactf.
March 27, SCO.
March 1, IK70.
FOB WHAT I'lIIU-CSK.
Conversion State Securllla*. ISSH A
masent Int. Pnbllc Debt... ls*s n
Relief of Treasury.jl*8S| 7,
Obavanstou Stale Stvlirllirs.! 18881 Uj
I. in.I Coliimlaaioli. 1888; Ol
bop! Conimisalou.IlMSa. tV
' tl i, .s i .ti |604^S3 .1
1,100.110 no ko-.i.ixo to
8,.io,ioi) on r>,osr>,<sHi in i.c.ii,
iSiOVSW (o ?o,<?o 00
OOO/lOO OtlJ fi4K),lX*> IN)
tf4BMS*iBSS :?4 ?NA'iS.olM 34!Sg,HM7,9isi:tt,ir74,7?i
?1,'.8.:ilO fftM.MOO in) 1
1 411/413 ai
sn.iNNi1 7.44J,ftou on
' Anle RueonttnuMlon Honde.1 Debt,oiitauiidlng Ocloluar, 187.1. Sa,7ftf.71S 41
l*oat-He<'oiiatrucUi>u H011d.1l Debt, Flrat Snu-Divlalon, oulatnn.liiig
Ortolter, 1*73..,. 2,74H,s:vi Ut)
?Kst?Stnictlon Bonded Held Seccftvl Snt.-DHUI.m, otitalandlng
o?uim, 1*78. n,T4i,n*.i ?4
Converted from Anguat 1,1*?.*, to October, 1873. t '1 :.7-M v.i
Convettctl from Anguat 1, ISO*, lo October, 1873. 1*?,773 41
Converted from August 1.1*08, to October, 1*7-1. 1,174,700 00
Total. ..v..Jl?,iv-,1,027 36
f&pb lu cinreacjr was i*?J lo tu make even sum of f loo, aanoe real ajnoncl Ooovsnloa Bend* aad Stocks Usatsd taVt?v^0ta
^^HH^HoSaa^D^SaaaaaaaaaaaMB^BaaaaaaB ' '? ' '
iHhWijm m i
It will be seen from tbe pfltofjding state
menl that the bonded debt aggregates $1
851,027.33, or $300 more than tho amount
reported outstanding on the 3lat of October,
1872. This dilfureneo is nccoufttcd for by the |
issue on the 18th of November, 1872, of $300 '
fundiug stock under llie Act? of September
and December, 18UG.
It will also l>e Been that I huvo divided tlio
debt into two historical periods, viz.: "Ante
Reconstruction Funded Debt," or the amount
of bonds ami stocks outstanding when tho
reconstruction government assumed control,
and " Post-Rcconstruction Funded Debt," or
tho amount ol bonds und stocks which bear
the signature* of tho officers of tho recon
structed government This hjtfter debt has
been subdivided as follows: Tafte first subdi
vision shows the tlonliug debt/itrontracled by
tho untc-reeoiistnicted governmsmt, which the
officers of tho reconstructed government found
outstanding when they camo into power, and
which thoy converted iuto a funded debt by
tho issue of bonds aud stocks; tho second
subdivision represents the funded debt ac
tually creatod by tho reconstructed gororn
metit, und for which only thvy ore entirely
histohy or TtiK nosonp nsirr.
The stock kuown ns tho three por cents of
17D4, was issued for the purpose of funding
certain debts incurred by tho State to aid iu
carrying on the revolutionary wur. At tho
close of the war tho United States govern
ment assumed the debts of tho States, in
curred in carrying on the war. Tho interest
upon this dobt wits paid by the national gov
ernment to the Slate, and the Stale disbursed
tho amount so received to her creditors.
When tho Bauk of the State was chartered in
1812 tho moneys received from the United
States were turned over to tho bank aud
formed u portion of its tlrst business capital.
After u few years the I'm ted Stales paid to
iho State tho entire principal of this debt,
which amount whs also turned over to the
bank, and it was made the duty of iho bank
to pay the interest annually accruing upon
these three per cents, und to redeem tho prin
cipal upon presentation. It is. therefore,
assumed that this debt is a prior lien upon tho
assets of the bank. Tiiia stook is held almost
exclusively by citizens of this State, having
been in tbe ltossessiou of single families from
generation to generation from 1794 to tbe
Tito Firo Loan stock, amounting to $303,
343.89, and Fire Loan Lends, amounting to
$481,944 3], ure outstanding balances of an
original issue of $2,000,000 uf bonds issued as
a loan to rebuild tho burnt district of tho city
of Charleston under act of .tune 1, 1838. The
bonds are byld in Kuropo and matured in
1808. The Mock muluied in 1870 and is
owned by ciluona of tho Unite** ??*?..??.
In my opinion those bunds and stocks,
amounting In the uggreguto to $785,288.20,
which uro now past duo and payable, and
ulso the throo per cents, making a total of
$824,134, are not on actual, but a contingent,
liability or tho Stale.
The act authorizing the issue of tho " Fire
Loan bonds" provides thai "it shall be the
duty of tho President and Directors of the
Bank of tho State of South t.'urolinn to make
proper provision for tho punctual payment of
the interest of auch loan us may bo effected
upon tho credit of the Slate, under the provis
ions of this act, aud also for tbe ultimuto
redemption of tho principal thereof;" and.
further, ihat when the profile of tho suid
Bank of the State of Suulh Carolina shall huvo
paid tho iiitorost on certain stocke aud re
deemed said atocks (all of which, suvo the
throe por cents, huvo boon redeemed lung
since), for which thoy huvo heretofore boeu
pledged and sot apart, the said prouls shall
ubio bo considered solemnly sot apart for the
payment of the interest or. the said loan und
tho final redemption of tho principal thereof."
The history of this loan is as follows : Tho
$2,000,000 of bonds were issued to tin* Bunk
of the Statu. Tho bank through its agent,
General McDuKie, secured tho services of
the Baring Hrolhora, of London, to nego
tiate them. They succeeded in disposing of
nbbul $1,000,000; the rewslndor wan returned
to tho bank, coiiTPttod into registered stook,
und sohl in tlio Sutoa. The proceeds of the
sale of those bonds and stocks were dopoeilod
in the bunk us a part of Its working capital.
Persona desiring to rebuild tho burnt district
of Charleston obtained a loau for that purpose
from the batik', giving a mortgage upon the
property as security for the loao. The bank
received tho moneys from the sale of the
bonds and stocks; it received the interest
upon the loans mado to the builders; it re
ecived the principal of the loans at their ma
turity. In Jmtice, therefore, to the lax payers
of tho Statu the assets of tho bank, which
have repeatedly been solemnly pledged and
set apart for tho redemption of thoao bonda
and stock*, ought to ho immediately so ap
In tho report of th - officers of this institu
tion to the Legislature of 1841 it is emphati
cally asserted ?' that the it hole of tho means of
Iho bank stand as security for this loau."
The president of iho bank iu his report to
the'Legislature or date July, 18G8, referring
j to this subject, very justly observed " that it
[ might ? |ih propriety bo regarded us a debt uf
tho bank rather thau a dobt of the State. The
bonds and slocks wore sold and the funds
placed under control of tho bauk, which was
charged with tho distribution of tho funds,
and also tho duty of providing for tho pay
ment of the Interest and principal of tbe obli
gations as they became due."
Tho Legislature, uuder act of December
21st, 1805, again pledged and appropriated
tho assets of the bank?flrat to tho payment
of tho Hre loan bonds in F.uropo ; second to
the fire loau stocks iu America, aud third to
the bills of tho bank.
Tho Legislature, uuder act of Septembor
15th, 1808, disregarded this contract with
tho holders of this loan, aud directed
tho sale of the assots, uuder the direc
tion of tho Uovcrnor, tho proceeds to be sub
ject to the order of tho legislature ; and also
authorized tho funding of tho hills issued
prior to Decemlier 20. I sou. The sale of the
assets was enjoined by tho courts, aud the
claims of these several classes uf creditors
are still the subject of litigation.
The whole history of this loan, as read in
the annual reports, both of tho officers of the
bank and the comptroller-general, conclusive
ly provos that tho interest on the loan aa it
accrued, aud the principal as it matured,
were mado a pi cl ot red claim upon the entire
funds of tho batik.
In 1843 the late C. al. Furmati, thou cash
' ior of Ute bauk, made a statement showing
Ibo probable operation of the bank in tho
payment of i|>9 publlo dsbt, in which he
aliovred that on tho 1st of Juminry, 1870, af
ter tho redemption of the last instalment of
tho fire loan, there would be a balance of
funds iu tho bimk to tlio amount of $'2,418,
I am aware that tho available assets of tho
bank, according to the reports of tbe Legisla
tive committee of 1838, appointed to investi
gate this matter, if sold, would probably bo
insufficient to cancel this ontiro indebtedness,
vi/... $824,124; but theBo facts have been
adduced to show that tbey should be so ap
plied as far ns they will go, aud tho deficien
cy, if any, cou'd attcrwurda bo provided for
by tho Legislature.
I repeat, therefore, that tho firo loan bonds
and stocks and tho throo por cent, stock ore
not actual, but couting.-nt debts of tho State.
The actual debt is thus reduced to $16,027,
The aggregate amount nf bonds and stocks
originally issuod under tbe several acta au
thorizing tho issue of bonds and stocks for
tho construction of tho new State House
was $2,280,600. Of ibis sum $1,034,811.59
huvo Ixen cancelled, and conversion bonds
issued in lion thereof, aud $212.000 have
bceu redeemed, and $1,251,788.41 uro now
outstanding in their original form, as wiU
more fully appear by roferenco to the state
ment of tho bonded debt.
Tho faith and funds of Iho State are sol
emnly pledged for the payment uf tho inter
est aud principal uf this debt. Of tho amount
outstanding $38,000 ol bonds of 1853 are
past due, and no provision has boon mado for
The bonds originally issued under tho act
of 1854, as m subscription to tho Blue Ridge
Railroad amounted to $1,000,000. Of this
sum $34,000 huvo bceu converted and con
celled, aud conversion bonds issued iu lieu,
and $U66,0U0 are now outstanding iu their
original form. Unlike the bonds and slocks
previously mentioned, no provisiou lias been
mado by pledgo of the faith or credit of tlio
Slate, or otherwise, for the payment of tho
principal or interest of these bonds.
Tho bonds aud stocks originally issued
under tho nets of September nnd 1 Vcombcr,
I860,'for funding the interest and principal of
certain bonds and stocks past due, aggregnto
$1,166,287.35, as follows :
Borat? maturing in 1837. $?09.000 00
Uonila maturing In Isfl'i . 611.000 Ort
Stock mat art ns in lbs7. 140,187 83
The total amount convortod wns $156,
673 41, ns follows :
Honda maiming In lss>. S4V0O0 00
Uoiut? maturing In 1887. 4o,*.*o oo
Stuck mal in Ine in l?sl. 60 STe 41
Til" ?..'?..! b ,1. n,ilyl??.li-.b U .1.1.".ii.
613.04, as follows :
mimt? maturing In 1887. $46*1,400 00
HoDiW matin line In lsl?7. 464.S00 00
stock manuring in l*?7. 7v,tia ?4
T"l?J. ?1.000,616 ?4
These two nets authorised tho funding of |
the interest due upon the outstanding bonds
und stocks to the 1st July 1367. amounting to
$969,090.44 ; and ulso tho funding of the
principal of the bonds of 1859, to aid tho Blue
Ridge Railroad, due in 1865, amounting to
$310,000 ; ulso buluiico of certain stork,
amounting to $3,705.46, utaking a total
amount fumluble of $1,282,801.90 ; total
funded, $1,1(10,287,85: hulunco not yet
fuuded, $110,514 55 ; additional amounts paid
In by parties to make even sums of $100, or
.s,u, $531.17 : less fractioual amounts relin
quished by stockholders, $298.09 ; balance
Tho bondu originally issued tinder tho act
of August 26, 1868. to redeem tbe obligations
known as tho bills receivable of the State,
amount to $500,000. 'I ht-se bills were issued
und. r an act of December. 1863. The amount
redeemable under the act of 1869, wus $300,
000. Of this sum $298,702 were redeemed by
ex-Trouatirer Purker, and $82 huvo been re
deemed by the present treasurer, as cash on
account of taxes ; tbero is, therefore, u balance
outstanding of fcl.?l?.
It appears, by tho reports of tho financial
agent, that these bonds were sold for
70 conts on the dollar, realizing $350,000.
I Tho total amount of bills redeemed by the pro- <
vious administration was, sa boforo staled,
$298,702 : Ihoro ought, therefore, to havo
been a balance of cash to tho credit of this
account on the 30lh of November, 1872, of
In comparing the aggregate receipts and ex
penditures of the last administration, this
amount is acoouutod for in the expenditure for
genera! purposes, still 1 found it impossible to
ascertain tho object of expenditure to
which it wns actually applied.
Puder thu ad ol August ?>(?>. 186 8, to au
thorise a loan to pay interest upon the public
dobt, the Am ilc'iu Bunk Kote Company
printed $2,000,000 in two issues. The first
issue uinouuted to $1,000,000. Oti account of
some alleged omission, they weru not consid
ered as saleable as were other bonds of tbe
Slate. It was, therefore, determined to pre
pare a second issuo of $1,000,000, and
to retire and cancel the first issue. Of
ssid issuo $500,000 were retired and do
alloyed by burning, ss appears by tho
certificate of five of the officers of tho exe
cutive department; $50,000 were can
celled aud are on file in the treasury ; $450,
000 were never retired, aud therefore exist as
a debt of Die Ststo. The entire amount of
the second issuo was also negotiated. The
total debt created under this act thou amounts
to $1,450.000. Of this amount $253,000 havo
Inen cancelled, and conversion bonds issued
hi lieu, and $1,197,000 are outstanding in their
I original form.
In order fo ascertain what proportion of
this dobt is chargeable to the an ten count ruc
tion administration, the following inquiries
should be mado:
1st Tho whole period iu months from tho
date the interest was last funded to tbe date
to which the intorest was payable under this
1 act. from tho proceeds of tlio sale of these
2nd. What proportion of this period be
longed to tbe aule-recoustructioB period, and
what proportion to tho fioat-rceonst ruction
The language of the set is rather ambigu
ous, but taken in connection with tbe recoea
mendation ol Governor Scott, in his first mes
sage, \\ hieb recommendation it was the evi
dent intention of tho Legislature to adopt, it
appears that the proceeds from tho salo of
these bonds were to bo applied to tho pay
ment of interest on the public debt accruing
from the 1st July, 1807, to 1st July, 1860, a
period of twenty-four months. Tho interest
accruing from July, 1867, to August, 1868, a
period of thirteen mouths, is chargeable to the
ante-recotiHtruetion period, and the interest
accruing- from August. 1808, to July, 1809. u
period of eleven months, is chargeable lo the
post-reconstruction period ; or, iu other
words, 13-24 of the endre deht of $1,460,000 ;
amounting to $785,410 Cfi|. is chargiuhh? to
tho former period, and 11-24, amounting to
$604,683,334;, ia chargeable to tho latter pe
It may be proper to state, In connection
with this auttject. that the Legislature, at Ha
session of 1868-'09, appropriated $500,000
for the payment of tho interest due for this
same period, so that there wero really two
sources of income to meet this indebtedness.
In comparing the amouui of moneys rccei.
from taxes, with tho money a cx\
count of appropriations for this same jioriod,
it appeara that the expenditures, exclusive of
tho paymenU for interest, exceeded the re
ceipta from taxes, and therefore, it is resumed
that the interest wna paid from the remaining
source of revenue, vir.: the proeeeda from thu
aalo of these bonds.
Under tho net of September 15, 1808, for
fttnding the bills of the Bonk of the Slate, tbo
American Bank NoteOotnpunv printed$1,500,
000. Of this ?um $1,259.000" wore issued, tho
others were cancelled unused. Of the amount
issued $69,400 werofon verted and $1,189,600
are outstanding in I heir original form. Tho
bonds prepared tinder tbo act of February 17,
1889, for tho relief of tbo treasury, amounted
to $1,000,000, of which $101,000 were nether
issued, and aro caucelied and filed in tho
treasury; $43,000 of the remainder have beeu
exchanged for conversion bonds and $850,000
aro now outstanding in their original form.
Tho stock originally issued mirier tho act of
March 23; 1809, for the conversion of 8tato
securities, amounted to $775,700; of which
$711,700 bavo boon convorted into conver
aion bonds. $0,000 represent stock transferred
and $64,000 are outstanding in the original
The issue of the conversion stock ia ex
plained in this way: whoii application was
mado to the treasurer by a pet son holding a
bond of the State to havo the name ex
changed for a conversion bond, tho treasu
rer took up auch bond and issued iu lieu a
piece of conversion stock of equal amount,
which stock was thou cancelled aud exchanged
for a conversion bond. This roundabout pro
cess was prescribed by the net for tho conver
sion of State aoenriti**. Several persona pre
ferred to hold the conversion Ktock, and. there
fore, did not carry the operation further,
which accounla for the outstanding balance of
$64,000 before referred lo. Of course this
amount doea not represent an itiowv of the
public debt, but merely represents in another
form aomo pro ex Utting Obligation.
au.? ??t? uMini nt X?-.7- :?.t?
the said act for tho conversion ot State secur
ities was $7,570,500. Of this sum $1,011,
600 were iaatiod merely to change the form of
aomo pre-exiat'ug outstanding indebtedness,
in thu form of bonds and stocks previously
authorized, and henco do not represent an
inereate of tbo public debt.
The $34,000 of conversion bonds converted
and caucelied arc thus explained.
A. person holding $1,000 of bonds of dillbr
out classes (s.iy funding interest, etc., $300 of
the denomination of $100; funding bills Hank
of tha State, $500 of tho denomination of $50,
and conversion, $200 of the denomination of
$100,) would present them to tho treasurer,
and reeeivo iu exchange a piece of conver
sion stock of lb* denomination of $1,000,
and in exchange for said stock a conversion
bocd of equal amount. Thus, $34,000 of
conversion bonds found their way back into
the treasury, aud bonds of the same class,
but larger denomination, found their way into
tho market without mortaring the volume of
I repeat, therefore, that there aro now out
standing $1,677,500 of conversion bonds is
sued in strict accordance with law, which n?e
merely tbo representatives of bonds aud
stocks of various clasaee, and, in tbo aggre
gate, of equal amount cancelled and tiled in
the treasury. This statement ia based upon
my personal examination of said cancelled
bonds aud stocks, and may bo relied upon aa
accurate In every particular.
There are also outstanding con vor? Ion bonds
to the amount of $5,965,000, which repre
sent an actual mcrratr of the public debt.
It haa been alleged that thoso bonds were
hypothecated for security ot loans, by order
of the Financial Hoard, and the moneys re
ceived therefrom used to cover the deficit of
revenue from taxation, or lo ''bridge tbo
chasm " between the receipts aud appropri
ations, and tho State being unable to redeem
the bonds at tho maturity of the loans, they
wore forfaited and sold, aud thus, by the
amount represented upon their face, iucreaacd
tho public debt
I will not venture to assert that these nllo
atioos are entirely at variaiico with the facts,
because I havo been unable to get access to
tho records ol the Financial Hoard, or to ascer
tain the exact time oaob particular loan waa
negotiated, and tho amount thereof, us also
iho amount of bonds forfeited for each loan
the State failed to diacbargo at maturity. Hut
this I assert with certainty, that more than
ooe-soTCOtlt of said amount is accounted for
in anothor war.
It appeara, that on the Mb of December,
1870, tbo then treasurer of the State, in a
letter addressed lo tho financial agent, (a
copy of which is of record in the trcusui;.- )
stated that the Stale owod a debt o'' $303,
343.89, due hi 1870, known as Firo Loan
Slock, and also a debt of $'260,000, duo in 1871,
known aa Statu Capital Bonds, which debts
the financial board had instructed him, tho
treasuror, to discharge, with authority to
j make whatever arrangements might be neces
sary therefor. 11s accordingly placed in said
?gent's poeaeasion bonds for tbo conversion
I of Stnto securities, amounting to $800,000,
[ directing him to make such use of said bonds
aa he might deem necessary to redeem said
The sequel of this arrangement shows that
$213,000 of Slate capital bonds have been
redeemed, $203,000 by tho f.oancinl agent,
and $9,000 by tins treasurer.
Whethor tha entlie amount realised from
tho aale or hypothecation of the said $800,
000 of oonveraiou bond* was barely sufficient
to redeem the $212,000 of Slate capital
bonds, (purchaseAble at that time at a price
below 80 per cent.,) does not appear, in the
absence of evidence to the contrary, and in
asmuch ae (,? fire loan Ktock waa redeomed,
it mny safely be assumed, that such waa
actually the case.
The bonds issued under the act of March
St, 1869, for the purpose* of the Land Com
mission, amount to $900,000, and under tha
set of March |, 1870, for the same purpose,
to $500,000, milking n total of $700,000. Of
(he (Irrt inane $76,000 "nave been cancelled, and
conversion bonds issued iu lieu, and of tbe
Hccond issue $157,000 have changed their form
in tbe samcm nui-r, leaving $407,000outstand
ing in llieir original form.
This concludes the history of the bonded in
debtedness of iho State.
I !.<;WIM, DKUT.
Th? lab i cht ?lue em) (lajrabl* upon t Im
bonded ilftit, on th? Siat of tlciotwr, <
1as appear* l>jr> th? treaaurwr**
hooka, ; mounts to. SI,428,81?. 85
Tlio Intert-at iluo ami pntkUr- on tlit>
Slat of October, ls;3, amount* U>_ tlSjBSt W
751.63, rundnble under Um acta of September
ninl Docember. 1866, which may properly bo
included in tho floating dobt of the State.
Tho special committee appointed by Ute
Legislature, session of 1872-7:t, to invest'gato
the nmouut of outstanding pay certificates
ami bills payable, reported that thoy had ex
amined outstanding pay certificates and billa
payable to tho nmouut of $401,869.98. The
committee asked for further time to continue
their examination, which was granted. It Is
assumed that there is an additional amonnt
outstanding, which tlte committee will prob
ably examino and report upon at your
present session. Tlio total amount outstand
ing n ay be safely estimated at $500,000.
It is u'.so estimated that there is an unpaid
balance of pay certificates or the session of
ll872-73, amounting to about $100,000.
It appears by tho treasurer's booka that
tho Stale :s charged with tho sum of $1,797,
362.94, on account of $3,395,000 of bonds
surrendered by tho Blue Ridge Railroad in
accordance witli the provisions of an act of
tbe Legislature, approved March 2, 1872.
There- is also upon the treasurer's book a
largo miscellaneous floating debt, including
unpaid lice school fund, and all unpaid ap
propriations, not payable an deficiencies after
October 31, 187:t, which is estimated at about
Inter, st open Domini Debt to October SI,
Debt laiohiM.- under Acts September and
Decemlier, 1S&?.. 116,70188
Pay cerllrleates and bills nayabla sessions
oC 1S70-71,1871-7*.. 500,000 00
l'ay certificates ?eaalon of 1S7*-7S.. 100,06006
Debt due Ulue Uldtfe Hallres.l. 1/1*7,802 94
MUcrlUnums Mooting Dtbt. 450,000 00
Funded Debt.115,027fM $5
Flucti Dg Debt. S^06,S97 75
AsRrrs?U Floating and Kunde?! Dobt .. .6tD^3&,?el 10
The passive, or do-nothing policy whjch
lias outntneu In tuo ireaviiieiii oi tue piiuiie
Idobt, since 1871. haa unquestionably proved
disastrous to the credit of tbe State.
Tbe tax payer,' relieved for tho time being
I front the payment of an extra tax, regarding
Ithe bondholder as a parasite, living at tho ex
pense of forced i-on tri but ions from his small
laud insuflicioiil revenue, "reaping whore he
hue not sown,'' lias been disposed to lot the*
Idobt and tho holders thereof take care of
themselves; hoping that some beniflcent
providence would ultimately rolieve Aim of
I the burden; curing litlio whether relief came
from repudiation or .the assumption nf the
debt by iho uulional government. But in the
meanwhile iho unpaid interest accumulates;
ibe probability of the assumption of our debt
by the national government is remote; threats -
of reptidiutinu begin to assume tangible shape*
and citizeus are found bold enough to give
them utterance; tbe bonda of tbe State are no
longer enquired for nt tho stock oxchange;
tho credit of the Stale is lost almost beyond
It is patent to the unprejudiced mind that
unless wo propose to adopt in thia State that
policy which haa made tbe name of tho one*
proud Stute of Mississippi infamous in the
commercial markets of the world, stach prompt,
immediate action is imperatively demanded aa
will demonstrate to the creditors of the State
our honest determination to adjust and settle
our ontiie indebtedness according to our beat
No one doubts that to levy at this time a
tax large enough to cancel our floating indebt
edness, or even to pay the accrued and accru
ing interest upon the bonded debt, would
paralyze iho business energies of the State, and
would be equivalent to an actual confiscation
of tbe property of every citizen.
To fund tbe whole of the floating debt at
par would increase the public debt of
tho State. Thia ia expressly Fcrbidden by
a recent amendment to tbe constitution,
unless two thirds of the qualified electors
of the State, voting upon the ques
tion, should give their assent to such
increase. F.von assuming that their assent to
such increase could be obtained, iho present
condition and resources of the Stato do not
warrant tho collection of an annual tax oi
about nine mills on tho dollar, in addition to
all other taxes, to pay interest upon tho public
Tbe question thou arises what Is to he done
under tho circumstances ? There are these
who even object, atrenuously, to the levy of
any tax nt all for the present to pay interest;
but tee must either pay or repudiate. If from
..'.innary 1871 to October 1073 does not furn
ish the tax payer a sufficient breathing spell to
prepare tho way for the resumption of the
interest payments, then three additional years
with all their interest accumulations will not
oflbrd it. But I am satisfied that this class of
grumblers comprises but a small minority of
the lax payers of tbe State.
They would grumble whether tlte tax bo
one mill or ten.
Taxation is considered an evil always to
si ui titled; but there are evils murh %torse than
that. The loss of credit, public and private,
the continuation of such aoUon as will bting
discredit upon tbe fair namo of tbe State and
cloud tho honor nnd ultimate good intentions
of iho people with imapteion of dishonorable
repudiation. History is pregnant with illus
trations of the fact that such a remedy is far
worao titan tho disease. It is Irrelevant to ear
present purpose to reflect tipw? ?kj way the
debt has been contracted, or to estimate what
consideration the State received in return. Tho
debt exists, ami sound public policy demands
that kmm provision be made at once for its
Tim language of the treasurer of North
Carolina in his annual report of November,
1872. applies with peculiar forco to the present
condition of affaire in thht State. I can do tv>
better tlisn quote his words and recomv-aowi
their careful perusal and consideration:
" I much fear, while. I do not opproheee?