Historical Newspapers of South Carolina

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M\3 35 BY ?. R. D?RISOE. ....,.w?.....?.n...^....M?.M?...W...?-M....H..M..n,...^M...?..'..M.. BER 30. 1873, mtME ^SSSS > Fellow- (Siizens^ttelS?nate and Souse of Representatives? .:; Ol.baw aaHeritogethex your, honor able bodies by virtue of the power j&es^dJ&iWe,; b^.jtb^ "(tonstitu^onj?f .tieState, which, authorizes the Gov ernor, '"?n extraordinary occasions, ' ' to convene the General Assembly. I 'heave been impelled to exercise this power by my sense of public duty, ?he occasion is ah "extraordinary" one, and its responsibilities, which attach- alike to the legislative and ex ecutive deportments of the State gov ernment, will be met, r I trust, with a strict regard to the. interests of the people-at large, from whom they de rive powers. Certain bond creditors of the State, holding or representing bonds of sev er?ll?TOse?i having, in the last resort, app??llVltti^pwi111? ?O^turt to pass upon the validity of the State securities held by them, and to afford .them the r ?lief to which, they deemed themselves entitled, the court have decided that the bonds in question are v?-l?^,* and:&aVthe comptroller general shall, " in obedience to the constitution and laws," levy ? tax to pay \he interest* oni the said several classes of bonds, such levy to be made before the . 15th. day of November proximo, the rate per centum of the , tax^to be thus levied to be adequate to'liquidate the interest past due, and also that for the present year. This mandamus covers five classes of bonds, amounting in aggregate to $3,549,000, fivtf'hhodred and forty-five thousand of which .have been exchanged for conversion bonds, and are how out standing in that form.- This decision of the "highest tribunal of the" State, thus invoked by a portion of the prfblic- 'creditors,' would t. js-to ad ' monish the State Govornment that it shonloV^?nout . -delay; provide for the hcruidation: of its whole bonded debt, upon some practical basis of ad justment-honorable alike to the State and its creditors-or prepare to witness proceedings, on the part of j those wh^hojdjts securities, which Statist eventuate1 in standing- the-State -?by.the decrees of its own or Fed eralCourts--as totally wanting in re gard for private rights or public faith. If the General Assembly Oould, by an instant exercise of constitutional powers, DESTROY EVERY BOND that bears upon it the impress of the great seal of the State, they would thereby confer a -very great present benefit upon the entire people, but it would be, at the same time, an act of monstrous injustice. There is a tri banal before which States are judged, as well as individuals. It is the tri bunal of public opinion. The verdict of impartial and inexorable history is .?nade up from the axpressed judg ment of fair-minded men, delivered on current events. Let not that ver dict be, fEiFtHe'Govarnment of South Carolina-based upon a broad recog nitioif of the rights of man-contract ed a large poblic debi to ?provide for its maintenance in the hour of its weakness, and remorselessly repud?ate that 'debi; in the day > of its .assured power. While I do not. for an in stant, assume that any honorable leg islator*woald avowedly repudiate any obligation of the- State, yet it must be patent to the world that to refuse, or to fail to provide, the means. for liquidating; the public- debt, is, in effect, lo repudiate it.' Further delay to act in <the premises, by meeting the just demands of our public credi tors,, to -the extent of our ability, without imposing a grievous burden on the people, is to fix upon South Carolina the stigma of repudiation, which must indelibly mark her as the shame and opprobrium of Ameri can States. I would, however, deem myself unmindful of the high trust that I hold from the people, and which they have also conferred upon you, fellow-citizens, as their chosen representatives, if I were to advise that the debt of the State should be liquidated at its full ascertained amount. The State satisfies the de mands of honor and good faith when it does all thai its circumstances al low. The existing bonded debt rep resents, in great .? part, an exemption of the people from high taxation du ring the period of four years, com mencing in 18fj8. Its liquidation confers upon uifcast responsibilities and solemn duties. .These responsi bilities and duties we cannot delegate to others, but we must act^according to our best understanding, confiding in the integrity of our motives, and in the just judgment of the people, whose lights ana obligations arr. alike representad by tht gevernment of the , State. A further and important con sideration that has induced me to convene your honorable bodies in ex traordinary Fession is that the act, which I have seen by your journals waa passed and ratified at your last annual session, withdrawing from the . 'honorable the comptroller-general all authority, to order "any tax levy, has newr reached this department, and hence, has not become a law, as was intended by the General Assembly. The decision, therefore, of the Su {>reme Court requiring the comptrol er-general to order , THE NECESSARY LEVY TO PAY TIIE " " 'INTEREST on the adjudicated bonds, on or be - iib? the 15th of November pyximo, would-if your honorable bodies had ? not been convened-have been imper ative upon-j rho, said officer, ami he would thu* 'have exercised a power under the ? ^operation j of a statute which the law-making department of the. State Government had clearly shown their purpose to repeal. I therefore thougntit proper that you, ns the representatives of the people, iii y?trrw legislative capacity, should be afforded the opportunity in season, after (ureter .reflection, of affirming y oof rjr?vious action in the premises, "reflecting, as you do, the direct ex pression of the popular. will. For yoni" information, and that of thc people bf the State, I have made a thorough and exhaustive examination of the varions classe? of. our public idebt, and have prepared tabular i?Utefl?ents exhibiting .the^trne^status thereof.' ' In this work-I' have been ably sec.on.led by the unremitting U bora of'"Si?.'Warre? R. Jones, clerk of tho financial hoard, to whom I 'take tKw p?bli?'meth?d of .returning nry thanks for hin valuable a^r?tance. It is'dnV also to the honorable the Unamrrr of the Stat?, and io his efficient bookkeeper, Mr. T. J. Minton, that I should say that I have been afforded every facility in making this investigation, and that I have ob tained reliable aid from them in ac I quiring the information desired. Eve ' r7 piecg of stock or bond cancelled : and filed in the treasury, which has been re3eemed, or for which con ver - I sion stock or bondfl have been ex changed, has been separately and carefully examined, its number and denomination noted and compared with the treasurer's registry of bonds and stocks converted. By elimina ting from the bonds and stocks out standing August 1, 1868, and from those printed since that period by Messrs. Murphy's- Sons, of rhiladel Shia, and the American Bank Note bmpany of New York, such as have been converted and cancelled, or can celled unused, I have'obtained a com plete registry of the bonds and stocks oatstanding at the present time. The j following statement will exhibit the j present condition of the bonded debt: .RECAPITULATION. Ante-reconstructiou bonded ?vdeht, outstanding Oct. 1873, $3,7(11,713 41 Post-recoiistruction bonded debt, first sub-division out standing October, 1873 2,748,830 60 Post-reconstruction bonded debt, second sub-division, outstanding, October, 1873, 9,341,033 34 Total, ?15,851,G27 35 It will be seen from the preceding statement that the bonded debt ag gregates $15,851,627 35, or $300 more than the amount reported v/utstand ing on the 31st of October, 1872. This difference is accounted for by the issue on the 18th of November, 1872, of $300 funding stock under the acts of September and December, 1866. It will also be seen that I have divided the debt into two his torical periods, viz : " Ante-recon struction funded debt," or the amount of bonds and stocks outstanding when the reconstruction? government as sumed control, and " rost reconstrucr tion funded debt," or the amount of bonds and stocks which bear the sig natures of the officers of the recon structed government. This latter debt has been sub-divided as follows : The first sub division shows the float ing debt contracted by the ante-re constructed government, which the officers of the reconstructed govern ment found outstanding when they came into power, and which they converted into a funded debt by the issue of bonds and stocks; the second sub-division represents the iunded debt actually created by the recon structed government, and for which only they are entirely responsible HISTORY OF THE BONDED DEBT. [Gov. Moses here gives a long ac ;ount of the origin of the ante-bellum ieU oi the State.] The bonds originally issued under ?he ace of August 26, 1868, to redeem ;he obligations known aa the bills re ceivable of the State, amount to >5O0,OOO. These bills were issued i ider an act of December, 1865. The imount redeemable under the act of L86& was $300,000. Of this sum 5298,702 were redeemed by ex-Treas irer Parker, and $82 have been re leemed by the present treasurer, as !ash on account of taxes; there is, ?herefore, a. balance outstanding of ^1,216. It appears by the report of ;he financial agent, that these bonds frere sold for seventy cents on the foliar, realizing $350,000. The total imount of bills redeemed by the pre cious administration was, as before ?tate.d, $298,702 ; there ought, there fore, to have been a balance of cash to the credit of this account on the 30th bf November, 1872, ot 851,298: In comparing the aggregate receipts and expenditures of the last adminis tration, this amount is accounted for m the expenditure for general pur poses, still I found it impossible to ascertain the object of expenditure to which it was actually appiled. Under the act of August' 26, 1868, to au thorize A LOAN TO PAY INTEREST upon the public debt, the American Bank Note Company printed $2,000, 000 in two issues. The first issue amounted to $1,000,000. On account of some alleged omission, they were net considered salable as were other bonds of the State. It was, there fore, determined to prepare a second issue of $1,000,000, and to retire and cancel the first issue. Of said issue $500,000 were retired and destroyed by burning, as appears by the certifi cate of five of the officers of the ex ecutive department ; $50,000 were cancelled and are on file in the treas ury ; $450,000 were wwr retired, and therefore exist as a debt of the State. The entire amount of the second issue was also negotiated. The total debt created under this act then amounts to $1,450,000. Of this amount $253,000 have been cancelled, arid conversion bonds issued in lieu, and $1,197,000 are outstanding in their original form. * In order to ascertain what propor tion of this debt is chargeable to the ante-reconstruction administration, the following iuquiries should be made: 1st. The whole period in months from the date tue interest was last funded to the date to which the interest was payable under this act from the proceeds of the sale of these bonds. 2. What proportion of this period belonged to the ante-re construction period, and what propor tion to the post-reconstruction period. The language of the act is rather ambiguous, but taken in connection with the recommendation of Gover ner Scott, in his first message, which recommendation it was the evident intention of the Legislature to adopt, it appears that the proceeds' from the sale of these bonds were to be applied to the payment-of interest on thc public debt accruing from the 1st July, 1867. to 1st July, 1869, a period of twenty-four months.. The interest accruing from July, 1867, to August 1868, ? period of thirteen months, is chargeable to the ante-reconstruction period, and the interest accruing from August, 1868, to July, 1869, a period of eleven months, is chargeable to the post-reconstruction p?riod ; or, in other word?, 13-2? of the entire debt of $450,000. amounting to $785,416 G6it, ia chargeable to the former pe riod. Mud 11-24, amounting to $664, 583-33-J, is chargeable to the lutter period. It may be proper to state in connection with this subject, that the Legislature at its session of 18^8-69 appropriated $5?G,000 tor the pay ment of" the interest due /or thip same period, ao that lhere were really two sources of income to meet this in debtedness. In comparing the amount of moneys received from taxes with the moneys expended on account of appropriations for this same period, it appears that the expenditures, ex clusive of the payments for interest, exceeded the receipts from taxes, and, therefore, it is assumed that the in terest was paid from the remaining -source of revenue, viz: the proceeds from the sale of these bonds. Under the act of September 15, 1868, for funding the bills of the Bank of the State, the American Bank Note Com pany printed $1,500,000. Of this sum $1,259,000 were issued; the others were cancelled unused. Of the amount issued $69,400 were con verted, and $1,189,600 are outstand ing in their original form. The bonds ?repared under the act of February 7, 1869, for the relief of the treasu ry, amounted to $1,000,000, of which $101,000 were never issued, and are cancelled and filed in the treasury ; $43,000 of the remainder have been exchanged for conversion bonds, and $856,000 are now outstanding in their original form. The stock originally issued under the act of March 23, 1869. for the conversion of State secu rities, amounted io $775,700 ; of which $711,700 have been converted into conversion bonds. 6,000 represent stock - transferred, and $64,000-are outstanding in the original form. THE ISSUE OF THE CONVERSION STOCK is explained in this way : When ap plication was made to the treasurer by a person holding a bond of the , State to have the same exchanged for a jonversion bond, the treasurer tool up such bond and issued in lieu a ' piece of conversion stock of equal ' imount, which stock wasSthen can-" j jelled and exchanged for a couver- ] ?on bond. This roundabout process j vas prescribed bf tfie act for the , jon version of State securities. Sev- j jral persona preferred to hold the . ?ooversion stock, and, therefore, did < lot carry the operation further, 11 tvhich accounts for the outstanding >alance of $64,000 before referred to. ] )f course this amount does not rep- j ?e8ent an increase of the public debt, mt merely represents in another form 1 ome pre-existing obligation. The j :ntire amount of bonds issued under he said act for the conversion of J ".tata securities was $7,576,500. Of ? his sum $1,611,500 were issued mere ja to change the form of some pre- 1 listing outstanding indebtedness in 1 he form of bonds and stocks previ usly authorized, and hence do not epresent an increase of the public .ebt. The $34,000 of conversion v .onda converted and cancelled are o hus explained: A person holding u 1,000 of bonds of different classes t say funding interest, &c, $300 of e he denomination of $100 ; funding t ill Bank of the State, $500 of the ii enomination of $50, and conversion ii 200 of the denomination of $100.) h 'ould present them to the treasurer r nd receive in exchange a piece of s inversion stock of the denomination d f $1,000, and in exchange for said c X)ck a conversion bond of equal b mounts. Thus $34,000 of conver- 1; on builds lound their way back into 1: ie treasury, and bonds of the same d lass, but larger denomination, found b leir way into the market without tl icreasing the volume of debt. I a ?peat, therefore, that there are now a utstanding $1,577,500 of conversion ti onds issued in strict accordance with o iw, which are mei ely the represen- g itives of bonds and stocks of vari- b us classes, and, in the aggregate, of ti qual amount cancelled and filed in ii he treasury. This sta.ement is based ti pon my personal examination of said b ancelled bonds and stocks, and may t ie relied on as accurate in every par- p icular. There are also outstanding p onversion bonds to the amount of t 6,965,000, which represent an actu- ii 1 iyicrcasc of the public debt. o It has been alleged that these bonds a ?rere hypothecated for security of a Dans by order of the financial board,. o nd the moneys received therefrom t ised to cover the deficit of revenue ii rom taxation, or to a " BRIDGE THE CHASM" a letween the receipts and appropria- c ions, and the State being unable to ? edeem the bonds at the maturity of 1 he loans, they were forfeited and 1 old ; and thus by the amount repre- ? ented upon their face, increased the ^ rablic debt. I will not venture to e assert that theBe allegations are en- " irely at variance wita the facts, be- f ause I have been unable ?te get access J o the records of the financial board, ' ir to ascertain the exact time each c articular loan was negotiated, and "2 he amount thereof, as also the nmount v if bonds forfeited for each loan the 8 Jtate failed to discharge at maturity. 3 Sut this I assert with certainty, that c nore than one-seventh of s dd amount c a accounted for in another way. It c ippears that on the 7th of December, ? L870, the then treasurer of the State, n a letter addressed to frbe financial j .gent, (a copy of which is ef record . n the treasury,) stated that the State >wed a debt of $303,343 89, due in . L870, known as Fire Loan Stock, and ilso a debt of $250,000, due in 1871, 1 mown as State Capitol BondB, which t lebt8 the financial ooard had instruct )d him, the treasurer, to discharge, ? with, authority to make whatever ar- J rangements might be necessary there- j for. He accordingly placed in said j igen t's possession bonds for tie con version of State securities, amount- J ing to $800,000, directing him to make such use of said bonds as he ^ might deem necessary to redeem said j obligations. The sequel of this ar rangement shows that $212,000 of - 3tate Capitol Bonds have been re- > deemed, $203,000 by the financial ? agent, and $9,000 by the treasurer. , Whether the entire amount realized ! from the sale or hypothecation of the . Baid $800,000 of tne conversion bonds ( was barely, sufficient to redeem the $212,000 of State Capitol bonds, ! (purchasable at that time at a price below 80 per cent.) does not appear. In the absence of evidence to the contrary, and inasmuch as no Fire Loan stock waa redeemed, it may safely be assumed that such was ac tually the case. The bonds issued under the act of March 27, 1869, for the purposes of the land commission, amount to $200,000, and under the act of March 1, 1870,. for the same purpose, to $500,000, making a total ' of $70: ?,000. Of the first issue, $76,- j 000 have been cancelled, and conver sion bonds issued in lieu; and of the ' second issue $157,000 have changed their form ia the was iBMaer, Je av ing $467,000 outstanding in their original form. This concludes the history of the bonded indebtedness of the State. FLOATING DEBT. The interest dneand payablo upon the bonded debt, on the 31st of Oct. 1872, as ap pears by the treasn roi's books, amounts to $1,423,912 85 The interest due and payable on the 31st of October, 1873, amounts to, 918,380 33 Total interest, accrued and accruing, Oct 31st, 1873, $2,342,29318 There is also an unfounded bal ance of $116,751,63, fundable under the acts of September and December, 1866, whic'h may properly be inclu ded in the floating debt of the State. The special committee, appointed by the Legislature, session of 1872-73, to investigate the amount of out standing pay certificates and bills payable, reported that they had ex amined outstanding pay certificates and bills payable to the amount of $401,869 98. The. committee asked for further time to. continue their ex amination, which was granted. It is assumed that there is an additional amount outstanding, which the com mittee will probably examine and re port upon at your present session. The total amount outstanding may be safely estimated at $500,000. It is also estimated that there is an un paid balance of pay certificates of the session of 1872-73, amounting to about $100,000. It appears by the treasurer's books that the State 'is charged with the sum of $1,797,352 94, on account of $3,395,000 of bonds surrendered by the Blue Ridge Rail road in accordance with the piovi ?ions of an act of the Legislature, approved March 2, 1872. There is siso upon the treasurer's book a large miscellaneous floating debt, induci ng the unpaid free school fund, and ?\ unpaid appropriations, not paya Dle as deficiencies after October 31, L873, which ?8 estimated at about ?450,000. TJEQA ITULATION. interest upon bonded debt to October 31, 1873. $ 2,342,29318 Debt funded under acts Septem ber and December, 1866 110,751 63 'ay certificates and bills payable sessions of 1870-71, 1871-72 500,000 00 ?av certificates session of 1872-73. 1 100,000 00 )ebtdue Blue Ridge Railroad 1,797,352 94 Miscellaneous floating debt. 450,000 00 Total. $ 5,306,397 75 funded debt. 15,027,503 35 floating debt. 5,306,397 75 Lggregato floating and funded debt. $20,333,90110 The passive or do-nothing policy vhich has obtained in the treatment f the public debt sin"e 1871 has mquestionably proved disastrous to i he credit of the State. The taxpay- ] r, relieved for the time being from he payment of an extra tax, regard og the bondholder as a parasite, liv og at the expense of forced contri ?tions from his small and insufficient evenue, " reaping ..where he has.not.j, o.vn," has been disposed to let the lebt and the holders thereof take |1 are of themselves, hoping that some leneficent providence would ultimate y relieve him of the burden ; caring ?ttle whether relief came from repu- j 1 iatiou or the assumption of the debt y the national government! But in he meanwhile the unpaicL interest ccumulates ; the probability of the ssumption of our debt by the na ional government is remote ; threats f repudiation begin to assume fall ible shape, and citizens are found old enough to give them utterance ; | j he bond? of the State are no longer squired for at the Stock Exchange ; he credit of the State is lost almost eyond redemption. It is patent to he unprejudiced mind that unless we ropose to adopt in this State that olicy which has made the name of he once proud State of Mississippi [lfamous in the commercial markets f the world, such prompt, immedi ate action is imperatively demanded | j s .will demonstrate to the creditors f the State our honest determina ion to adjust and settle our entire adebtedne88 according to our best .bility. No one doubts that to levy .t.this time a tax large enough to ancel our floating indebtedness, or ven to pay the accrued and accruing nterests upon the bonded debt, would laralyze the business energies of the Itate, and would be equivalent o an actual confiscation of the prop rty of every citizen. To fund he whole of the floating debt at tar would increase the public .debt if the State. This is expressly for ?idden by a recent amendment to the onstitution, unless two-tiiirds of the [ualified electors of the State, voting ipon the question, should give their .ssent to such increase. Even as uming that their assent to suchjn rease could be obtained, the present ondition and resources of the State lo not warrant the collection of iN ANNUAL TAX OF ABOUT NINE MILLS ON THE DOLLAR, n addition to all other taxes, to pay nterest upon the public debt. The [uestion then arises, what is to be lone under the circumstances ? There ire those who even object, strenuous y, to the levy of any tax at all for he present to pay interest ; but wc nust either pay or repudiate. Il from Fanuary, 1871, to October, 1873, does lot furnish the taxpayer a sufficient >reathing spell to prepare the way br the resumption ot the . interest jay ment', then three additional years, vi th all their interest accumulations, viii not afford it. But I am satisfied mat this class of grumblers comprise jut a small minority of the taxpay ers of the State. They would gru?? ale whether the tax be one mill or ten. Taxation is considered an evil always to be shuned ; but there ore evils much worse tha:a that.* The loss of ;redit, public and private, the con tinuation of such action as will bring discredit upon the fair name of the State, and cloud the honor and ulti mate good intentions of the people with suspicion of dishonorable repu diation. History is pregnant with illustrations of the fact that such a remedy is far worse than the disease. It is irrelevant to our present pur pose to reflect upon the way the debt has been contracted, or to estimate what consideration the State received in return. The i debt exists, and sound public policy demands that some provision ne made at once for its adjustment. FLAN OF ADJUSTMENT. It is a Well established principal of political economy that an individual having money to invest will make an investment in that class of " secu ties" which offers the best guarani of safety-securities .which will n only pay a premium upon the mon invested, but which may be dispos of, without loss, whenover a chan, ol' investment is desired-in otb words a marketable security. Tl value of. a State, security depen largely upon the confidence to tl purchaser in'the good faith of tl ? State, but more especially upon tl means, which the . State places in tl hands of every holder of her bond to compel the punctual payment the interest as it accrues, and tl principal at maturity. The State sov?reign and cannot be sued ; bt when she enters into a contract wit an individual through her agents an directs said agents to perform certai duties in fulfilment of that contrac such individual can compel the agent of the State to execute the will c the State as expressed in such cor tract. Thus, in three-fourths of th States, whenever the financial officer are authorized'to create debts by th issue of State obligations, the mo chinery for the punctual payment c the interest and principal is pr?vida as a part of the contract ; and ever individual who accepts such obliga tiori in exchange for the money h advances, receives a remedy-ofwhicl the obligations themselves are th evidence-for every neglect of dut] in the premises on the part of th* agents of the State. Such an obliga tion offers the best investment tha could possibly be made, inasmuch ai the holder thereof has a lien upon the entire property of the citizens 0 the State. How is it with the bond ed debt of thia State ? Our debt maj be divided into three classes. Tin first class includes all those bondi (originally issued) of the five classes enumerated in the decision of the Supreme Court upon the Morton, Bliss & Co. mandamus case, amount ing to $3,549,000. The second class includes all those bonds and stocke whose only guranlee for the payment of principal and interest ia the good faith of the State. This class com prises the old bonds and stocks, (ex cept the Blue Ridge bonds,) the bonds for funding past due interest and principal, and funding bills Bank of the State, and amounts to $4,513,503 35. The third class are those for which no provision has been made for the payment of interest or principal hy guaranteeor otherwise, and includes the Blue Ridge bonds, (the absence af the guarantee in this instance be ing probably au oversight,) and the lonversion bouda issued directly by wile or hypothecation. This class ag gregates $6,955,000. Thi3 concludes ihe history of the character of our bonds. Let us now inquire their ?.resent market value. Our " Janua ry and July bonds," old and new, ?vhich comprise the eutire amount, ?xcept $2,189,000 of " Aprils and Dctobers," are quoted at fifteen cents, rt?e latter,'o????g a 'portion bf those .ecently before the courts, are quoted it twenty-three cents. Now it is ev dent, from the arguments previously idvanced, that the State is unable to Day the interest upon the debt as it :tands, and that it is to the interest )f every bondholder that THE DEBT BE REDUCED n volume to a reasonable limit, so ?hat the payment of interest may be -esmned. If, when the holders of >ur boncU and stocks agree to eurren ler them for a new and consolidated jond or stock, the State agrees as a Dart of the contract, (of which such jond or stock itself would be the ev dence,) to provide for the payment )f. thc unuually accruing interest and 'or the extinguishment annually of i portion of the principal until the >vhole shall be thus redeemed ; if, in Dursuance of such agreement, she in kructs her agents (whoever may rep resent her from the date of the con tact until the debt is entirely extin guished) to levy and collect annually ;axeB sufficient to pay said interest ind retire a portion of the said prin ;ipal-if she instructs her agents as iforesaii to disburse the funds so joTlected tb the purposes aforesaid, ind if embezzlement or diversion of said funds be made a felony, punish ible as the constitution directs, it is jvident that it would be to the best nterest of the bondholder to accept willingly such a compromise: For if these remedies be placed in the bands of every bondholder it ?H evi lent that while his new bond would represent ?75071 its face a sum equal ynly -to two-thirds or one-half the Pace value of his old bond, the mar ket value of the nmv bond would undoubtedly be from one-third to one-half greater than the present value of the old. For ' instance, if $3,000 of old bonds, worth 15 cents an the dollar, or $450, be exchanged for $2,000 in new bond3, worth at least 40 cents on the dollar, or $800, tho holder willhave madeaclear gain upon the actual value, of his bond of $350 ; and again, if $3,000 in old bonds, worth 23 cents on the dollar, or $690, be exchanged for. $2,000 in new bonds, worth at least 40 cents on the dollar, or $800, the. holder will have made a clear gain upon the ac tual value of his bond ofr$110 ; and in addition thereto, the payment of the interest, and redemption of the principal of his new bond will be ac-ply secured by remedies in' his immediate possession. I RECOMMEND ; \ First, That all the bonds of the State for which the State -is,actually, liable, less$38,000 State Capitol bonds of 1853, past due, to be otherwise provided for, be scaled in the follow ing manner, to wit : That the State treasurer be author ized and instructed to ' receive from the holders milling to surrender ?he. same, all the bonds and stocks of the State previously issued and now out standing against the State, (not in- ? clading the State Capitol bonds be fore referred to, and oonda known as "Conversion bonds," issued directly by sale or hypothecation, the numbers and denomination of which wiil more fully appear by reference to the trea surer's registry of bonds and stocks converted, or issued directly, amount ing to $5,965,000.) and shall there upon, in exchange forand in lien of ?aid bondB> or steaks *d jauripndered, issue to said holders other ^bonds or certificates of stock,' as tt'eyfaay! ?9?'* .sire, equal in amount to jj- of the face value of th? bonds or stocks BO surrendered. That the State treasu rer be authorized ana instructed to receive from the holders willing to surrender the same, all the bonds of the State, known as " conversion bonds," issued-directly, by sale or hy pothecation, the number and denomi nation of which will fully appear by reference to the treasurer's registry of bonds and stock converted, and issued directly, and shall thereupon, in exchange for andr in lieu of such bonds so surrendered, issue to said holders bonds or certificates of stock equal in amount to -- of the face value of the bonds so surrendered, and no liability on the part of the State is recognized further than is herein limited and expressed. That the State treasurer be authorized and instructed to receive from the holders willing to surrender the same, all the coupons upon the bonds before men tioned, which have accrued or will accrue on the 31st of October, 1873, and the interest orders upon interest due upon certificates of stock as afore said to the date aforesaid, and shall thereupon, in exchange for and in lien of such coupons or interest or ders so surrendered, issue to said hold ers bonds or certificates of stock equal in amount to-of the face value of the coupons or interest orders so surrendered, as follows-: Coupons and interest orders of the principal of bonds and stocks scaled at-to be scaled in the same proportion, and coupons and interest orders of the principal of bonds scaled at-to be scaled in the same proportion. That the State treasurer be instructed to receive from the holders willing to surrender the same all the pay certifi cates, bills payable, scrip, or other evidence of State indebtedness out standing against the State on the 31st of October, 1873-except appropria tions payable as deficiencies-and shall, thereupon, in exchange for and in lieu thereof, issue to said holders bonds or certificates of stock equal in amount to-of the face value of the pay certificates, bills payable, scrip,, or other evidences of State in debtedness so surrendered : Provided, That no liability to pay the aforesaid pay certificates, bills payable, and scrip or other evidence of State in debtedness is recognized other than i; herein limited ana expressed. Sec ond. The bonds and certificates of stock herein authorized to be issued ?hall bear upon their face the words 1 bonds.and certificates of stock," aud mall ?Iso bear upon their face a de claration to the effect that the pay ment of the interest is secured by the levy of an annual tax, and the r? demption of the principal is likewise secured by a sinking fund provided For the purpose, which declaration thall be considered a contract entered nto between the State and every , lolder of such bond or stock. Said jonds and stocks shall be signed by ;ho-, countersigned by the-, ' md have the great seal of the State iffixed thereto, and there shall be j ^reserved, in the offices of the secre tary of State and the State treasurer, i d?scriptibn of the amounts, dates,. . md time of issuing said bonds, and , ;he bonds and scrip so taken up shall De cancelled by the treasurer, aud a j ist of their dates, numbers and imounts, and by whom signed, re- j :orded in the offices of the State trea lurer and secretary of State. Third, rhat the faith, credit and funds ol' - ;he State be solemnly pledged for the j junctual payment of the interest and ; inal redemption of the principal of ;aid bonds and stocks, and for provi- , ling a sinking fund for that purpose. Fourth. That there shall be annually ( evied and collected from-until ;he bonds and stocks herein author- ? zed are extinguished, principal and ( riterest, in the name manner and at ;he ?'ame time the general State taxes ire levied and collected, a tax of nills upon the dollar of each dollars' . vorth of taxable property in the State, n addition to all other taxes. That ,he fund so created S1IAT.L BK KEPT 'SEPARATE 'rora all other funds, and shall be ap ??lied: First, to the payment of the ; mnually accruing interest upon the jonds and stocks herein authorized. Second, the surplus of said funds re naming in the treasury after thepay nent of thc said interest shall be ap plied on or before the-of each rear to the extinguishment of the principal of the public debt, as fol ows: The- and-shall con stitute a board of commissioners for . ;he management and control of the ?aid surplus fund for the extinguish nent of the public debt. The said Miar? shall give notice, by public ad vertisement for thirty days prior to ;he- day of- of each year, ;hat they have under their control the ?um of-- dollars to be applied to ?he purchase of such bonds or stocks 18 may he presented for payment by toe holders thereof, on the-day jf-as aforesaid; provided that said bonds be purchased at a price not above their market value at the time of purchase, said value to be as certained from the principal stock markets of the United States. Third, that the bonds and stocks so redeem sd shall be immediately cancelled by the treasurer in the presence of the board, and be entered as credits upon' ind to that extent in extinguishment 3f the public debt. That a detailed statement of the number, denomina tion and series of the bonds and stocks 30 redeemed and cancelled, together, with the price paid for each bond and ?tock as aforesaid, shall be prepared by the treasurer, signed by the board, and.furnished to the General Assem bly at the. commencement of each an nual eeBsion thereof. That embezzle ment or diversion of said funds, whether directly or indirectly by speculating in said bonds, or purcha sing them at fictitious prices, be made a felony, punishable by a fine of not more than-nor less than-, and imprisonment "for not more than or less than-. proportionate to the amount embezzled or diverted ; and days ante bellum," real ; estate bore but an inconsiderable portion of the public expense. That species of prop erty which paid the largest annual premium upon the capital invested could best afford to bear the burden of taxation, and hence the revenues of the State came chiefly from the tax on slaves and an arbitrary tax on free-persons of color;- -For-instance, .$600. invested in a slave, -waaia real ize yearly at least $170 trpori the ipr j vestment! ' The owner could there fore well afford to pay the tax ira- ! posed, as in 1860, of $1 26 upon his slave. In I860, according to the cen aua of that date, there were in South Carolina 402,406 slaves, y i el di nc the State a tax of $1 26 per head, $507,034 56, and 9,914 free pers< of color, paying a tax of $3 per be; or $29,742, making a total revei from taxes upon slaves and free p I sons of color of $536,773 56, or ne; ly nine-tenths of the entire amoi: necessary to carry on the governme The practical working of this syst< was the fostering ana building up a large and powerful landed arist< racy. A man's title to rank and i cial position depended upon his prim ly acres. The greatest boast of South Carolina gentleman was his i heritance of vast landed possessioi the hunting grounds of his fathe the pride of his children. The cora troller-general, in his report to tl General Assembly for 1860, stat that " the tax on all the land of tl State, amounting to 17,558,401 acrt produced* only $82,515 51, which less than an average of five cents p acre !" Valuable cotton lands, whit the owners would not have sold f< hundreds of dollars an acre, we: valued, for the purposes of taxatioi at five cents per acre. Now, huma slavery is abolished. Millions of cap tal invested in human chattels ha\ been swept out of existence with single stroke of the pen. Some oth< species of property must bear the e: penses of government in its steac Which is it ? The experience of th civilized world answers that THE TRUE BASIS OF TAXATION is real and personal estate, and th new regime, in conformity to that ex perience, hoj adopted that system fo the new order of things. The prac tical operation of this new and equi table system in South Carolina is th same as that experienced in the Nortl a half century ago. The taxes fal chiefly where they belong-upon rea estate. The owner of real estate can not afford to keep thousands of acre! idle and unproductive merely to gr?t ify his personal vauity, and becau? he inherited them from his fathers and pay the tax upon them. Stern necessity, therefore, will compel hi DD to cut up his ancestral possessions in to small farms and sell to those whc can and will make them productive ; and thus the masses of the people will beeome property holders ; wealth will be more widely diffused; the people will become more prosperous ; immigrants will come and settle amongst us and develop the vast re sources of the State. Thus onward the march of civilization will mak? its way, and no cry by the large real estate owner of excessive taxation can 3tay its progress. But aside from this view of the question there is ari other matter which Twill now pre sent. That the aggregate arnon i re ceived from taxation since 1860 has greatly increased, isa fact which none will deny ; but this is also true of the National Government, and of every State of the Union. The question is not whether taxation has or. has ? no1 ' increased, but whether the compara tive rate of increase is greater in, this than other States of the Union: . The following 'table will.show the increase of taxation between the years I860 and 1870, in five Democratic' States, as shown by the ninth census: Slate?. Aggregate Taxation, Inc. in Av'ag ISM. 1S70. .lt) y'rs. un.inc Georgia....$ 797,895 $ 2.G27.029 $2 27 22 Mn lenneiMiO.. 1,1? 2,798 S^S1.579 2 1'6 2U 6-1 Maryland.. 2.15i)l895 6,922,9u0 2 2<> 22 Kentucky.. .2.148.341 ?,"8?,118 166 IC 6-ln Missouri... 4,109,063 13.9oS,49S 2 14 21 4-lU General average annual increase, 2i) 0-10. lSCO. 1170. i, Car. Una..$1,280.386 * 2.767,676 $116 110-10 Thus it is seen that while the av srage annual increase of taxation in: those five States has been 20 6-10 per lent, in South Carolina it has been, wily 116-10 percent. Toe aggre-' ??ate taxation of the national govern inent has increased from $94,186.74(> in 1860, to -$280,591,521 in 1870, 01' an average annual increase of 19 4^0 per cent. The following table will exhibit tho per capita taxation in several of the States, (as shown hythe ninth census,) ;iinl by this table aldo South Carolina gain ? I?;- the comparison: Slatm. Popula- Aggregate Per lion. Taxation. Capita. UamehRMUl.1.457.851 tMJSSJflO $16 S4 New York.4.352,759 " 43J5^u8 ll l?9 Dhio.S??,ttn S! 526,64$ ? 8 75 Maryland. "Sn,S?4 6682.842 3 49 Kentucky .I ?81,011 , 578,',118 4 38 South Carolin?. 7v6 (-titi 2,767,675 8 9* . The per capita taxation of the Uni ted Sutes, according to the ninth cen sus, is $7 27. The State of Nevada, with a per capita taxation of $19 40 and the State of Florida, with a pei capita taxation ot $2 64, probably represent the extreme and mean of tho per capita taxation of the differ ent States. Tho average per capitn taxation of the thirty-seven States comprising the American Union is $7 27, ol- $3 36 more than that of South Carolina. The foregoing illus trations prove conclusively that the rate of taxation in this State is not excessive, and that the increase since I860 has not been greater than that of the United States.or the several States. It, will be noticed from the foregoing tib?es that the State ot Massachusetts, unquestionably the best governed State of the Union, is, with one exception, the MgJicst faxed of any State in the Union, and, not withstanding' che magnitude of taxa tion, the aggregate receipts have..not been sufficient to prevent an annual increase of-the public debt. . CONCLUSION. . Senators and Representatives, per the person or persons . so offending shall be forever thereafter disqualified from holding any office of profit or trust under the-constitution, unless the General Assembly shall, by a two thirds vote, relieve him or them of siich disability, upon payment into the treasury of tne amount so em bezzled or diverted. It will be ob served that the plan I have, proposed , for the extinguishment of the public debt differs materially from the one proposed by Governor Orr,. The scheide here presented is in successful operation in the best governed States in the Union. Experience has de monstrated that a sinking ft?nd ope-: rating at compound inte>'cst is not only liable to great abuse, but very-seldom* , if ever,, accomplishes the object 6f ita projectors. In the. words of ,T)r. Ham ilton, of Aberdeen, " the increase of revenue or the diminution of expense are the only means by which, the sinking fund can.be enlarged-and?its operations rendered more effectual ; ?iud'all tH'e?scT(im?8"'for"*'jdi?c'fiargjng trf? li?t?on'l? debt hy ?i?fkit?g?iftitfda, operating at compound interest'or in any other manner, unless so far as they are founded upon thislprinciple," or by borrowing money elsewhere at ' a cheaper rate of interest ..than: at. home, to redeem the debt at present worth, are completely illusory." A forcible illustration of the correctness of th?R argument ' may 'be* j nd here at home. f THE CITY OF CHARLESTON has sunk iu her sinking fund the sum of $891,624 33, which was invested to compound interest and pay th?city debt. The. estimated value of 'the assets of this fu Hd is s?t down, at $246,99V26, showing a loss of 73 per cent, pf the amouut invested.- Thus it haj actually added to the debt which it was intended to extinguish. The plan here proposed ?8 free from the objections.urged against the other. On a certain date.of each year, the surplus of revenue, after paying the interest due for suet year,, is applica ble to the extinguishment, Dy the purchase at its then present '.worth, of a portion of the debt itself, which amount so purchased will be immedi ately cancelled, and to that extent each year the debt ' will be actually reduced. For instance,1 if? one-year after the passage''?of'the act herein proposed,-there be A surplus of $50( 000 to be';applied :to the' 'extinguish ment of the debt, and the then pres? ent worth of the debt be fifty cents on the dollar, the board of commis sioners could purchase $100,000 of bonds or stocks, having attached thereto nineteen years' worth o"f Mi niatured coupons or interest orders, or $114,000. Thus $50,000 in cash would reduce the debt, principal and interest, by $214,000.' If during tne tenth year of the operation of this fund there be $500, 300 applicable to the extinguishment of the debt-and' we propose to show that there will be that amount-and if the then present worth of the bonds be as high as ninety cents on the.dol lar, the board.of commissioners could purchase $555,555 of bondB oi stocks, laving attached thereto ten years' vorth of unmatured coupons or in cest orders, or $333,333; and $500, )00 would reduce the debt by $888, 588. . Even at par $500,000 at this rime would reduce the principal and nterest of the debt by $800,000. The iccompanying . table will exhibit' the )robable:, Operations of this surplus und in the extinguishment' pf the mblic debt. . * ;* * * . * * -.: ' ? i -? VJ??P? WW .yVutoUMH This table, as has been seenr has >een based upon' your, reduction^ he public debt by a scaling process, ^-a" maximum of even the large imou'nt of $12,0.00,000, which amount . have selected' simply for the pur >ose of illustration-. " TAXATION. Taxation ia defined as the .taking if private property for public use" Che exercise of this power is always egarded by the individual with-a ealous eye, and is a subject of espe ir.l interest. It affects, in its opera ion, every individual who Torin's a omponent part of the body .f olitifc whether he be the owner ot property v not. . The discussion of the VUT?OUB ystems and the best methods of taxat ion, engrosses the attention of the tatesinen of the civilized world. 'Vhetherin "proud Britain, restive ?rance, imperial Eusaia, or feverish Italy," it is at the present momenta [uestion of all-absorbing interest, taxation, in some form, ia as ancient n origin he society itself. "No civi ized community can exist without axation, and no' hi^h degree of civi ization is attainable without com batively, large tuxation. The prin riple, hud down by Adam Smith, vhich has been engrafted upon the undamental lawaof-ev?rv civilis??d iountry, "that the subjects of every State ought to conti ibute towards the iiippoft^'i' the government as nearly is possible in- proportion to the reve ille they respectively eujoyjainder the u-otec:ion of the State," is a truism miversally accepte<l. That system >f taxation, therefore, is most just md equitable, ami least oppressive, .vhich is so framed as to carry this iropositiou intouctual operation. The Jonstitution of this State eviden?ea the intention of its framers to illus trate this principle in that secti?n ivhich provides fer ?i uniform and iqiial rate of assessment and taxation, ind which declares that all property, ce4. personal or possessory, shnll:be iubjeel to taxation. But says some taxpayers, "I admit the necessity for taxation; I admit that it is a desirable form of^expen iitu're. Bili our representatives cora ng, as the majori ty_ of. them do,"from the non-property holding class of oiir ?itizena, nave 'been' inconsiderate and jarele^-K in the levy of an excessive md burdensome rate of taxation, taxation:'ka,s increased atan enor nous rata since the palmy days ante helium, .anrl.Jo a-,far, greaten extent ;han,is necessary-to meet the public .equireuients.". , L.9t,.?s inquirtti how .'ar this taxpayer'.s.assertious Hie-uor -ect: Under the anomalou8.sy.<<tetn.'of taxation '-'in vogue during the palmy nit... ne to express the hope that, while iiifereUces-of opinion, incident to;-the ?ight.bftfre? dhwnssion! vimon? r?iie :>endrnitatadtintrammelledlegi8k?iter8, . viii be asserted in yoiir respeotive lorises-as to Ure grave questions pre lented for your consideration/ ybur leliberation'8 ra^'/be'marked by an sarnest arid umuvjdea ji'tlrpose to ad vance ";the. J comnirtn int.?r^'?f'jbe leopl'e and the true wei fare r afc the State. And to these ends -I sincerely n voice upon all your counsels the. be* lign guidance ol an Omniscient Provi lencet - - -X .T FRANKLIN J. MOSES,. Jr.,': Governor of South Carolina. An honest rustic went into thtf sliop )f a Quaker to buy a hat fer 'which twenty-five shfllirigs was demanded. Coffered twenty snillings. " A's I ive," said.' the, Quaker,tinpot iSfcpL. liq mye '.'to "thee.' at thai pnce." ' AaVjo? jive," exclaimed "thejtjo'un ;ryman, then Uye more, moderately^ md be hanged to,^pu J",-. ? Friend," said- the. Quaker,, ,? thou. shalt ?haVe that hat; for nothing. ...I haya.wld hate-for twenty; years,-: and rn? .trick was never-found out untihJioWs"?j<ii . Jami All, - Once a-careless''-matt want'tr>4he cellar'and'stuokf^tto o?ndle-irt'wfcat he thought was a&eg'/'?f 'black e?ftd.. He sat riearlfc^nnking wine until the candle - mirrisd 4dW:{'4eax^r and nearer jtgbttb th?-bfacfcsait?^n?ater anet nearer", u?tit'th?1 blaze reached tba black sand, and/ as it waa n?thj ing else but black sand, nothing hap pen ed. .'.v/-> i ?wdffad-it ?ifoda tc