The daily phoenix. (Columbia, S.C.) 1865-1878, July 08, 1868, Image 4
the "T????dency at the term of the court, should there be any, by
drawing taft? jurors. .' li "
The expons* of dieting prisoners will not be lees than $60,000;
for continuing'the construction of ?tho Penitentiary and for guard?
ing and subsisting convicts, not less than $75,000; for salaries,
according to estimates, $90,000; for contingent accounts, $60,000;
for public printing, $10,000; for contingent fund of tho Executive
Department, $20,000; for the Lunatic Asylum, $20,000; for th J
University, $12,000; for claims against the State, $10,000; for other
expenses, ordinary and extraordinary, $40,000; making a sum total
of $470,224; to w^0^ ft<*d *or expenses of tho Legislature, $150,000;
for deficit the present year under Gen. Canby's tax order, ending
October 1, 1868, $100,000; and $331,414.59-being the interest on
the State debt due 1st October, 1868-and tho amount to be raised
by taxation will reach the enormous sum of $1,057,638.59, without
one dollar being appropriated for free schools.
To redeem the BUls Receivable, which may be outstanding on tho
1st day of October next, to pay the interest upon the Stato debt
which may be due at that time, and to furnish sufficient funds to
carry on the operations of the State government until the taxes
may be collected in the spring of 1869,1 recommend that $1,000,000
be borrowed by the State upon bonds, provided the bonds can be
disposed of at no greater discount than twenty per cent.
It is now believed by the financial officers of the State, in which
opinion I concur, that the tax order of Gen. Canby, together with
the tax levied by the Convention, will not realize to the Treasury
more than $375,000. There is one striking and even alarming fact
with reference to the pocuniary and financial condition of the State,
to which it is here proper to advert. Notwithstanding the order of
Gen. Oanby provided for a more particular and accurate assessment
of real estate the present year, than has been made heretofore, a
revision of the assessments shows a very considerable declino in the
value of all real estate and town properly. Lands in the country
?re worth from fifty to one hundred per cent, less than they were
on the 1st of September, 1865. Nearly as great a depreciation
exists in the villages, towns and cities of the State, especiallv where
the lots are not yielding rents. The above estimate, which it will
be necessary for you to provide for, embraces only the ordinary
expenses of the State governments and does not include the amount
necessary for free or public schools. If the taxes of the present
year proved oppressive to all branches of industry in the State, and
yielded but $375,000, the expenditures of the next year should, if
possible, be curtailed by the reduction of salaries and otherwise, so
as not to exceed that sum, exclusive of interest on the public debt.
By the new Constitution, the poll tax is required to be appropri?
ated exclusively to educational purposes; and, under t?- circum?
stances, it would be unwise, in my judgment, to appropriate any
other sum.
The taxing power is always a delicate one to manage, and is
invariably regarded by the 'tax payer with jealousy. In the recent
political changes that have occurred, the fact cannot be denied that
the General Assembly are tho representatives of a very inconsider?
able proportion of the property-holders and tax-payers of the State.
The colored population, wno constitute the large majority of voters,
have little property; and yet, all the expensive machinery of
courts, juries, jails and the Penitentiary, is as much to give protec?
tion to their persons and property as to the tax-payer himself; and
it would seem to be only right and proper that some portion of this
burden of taxation should be borne by this [most numerous class of
society. If the General Assembly, regardless of these views, should
levy the entire tax of the State upon property, it would necessarily
lead to much dissatisfaction and discontent among the class thus
taxed-very many of whom are not only prohibited from filling any
official position in the State, but ore actually excluded from the pri?
vilege of the elective franchise.
THE BANK OF THE STATE OF SOUTH CAROLINA.
In estimating the contingent liabiHties of the State, the notes issued
by the Bank of the Stato of South Carolina, amounting, according to
the report of the President to the Legislature, dated 1st of October,
1866, to $3,867,549.61, were not embraced, for the reason that, in my
judgment, there is no legal liability devolved upon the State to make
good any portion of this issue. This report shows" that the issues
of the Bank of notes under one dollar, up to and since 1861,
amounts alono to tho enormous sum of $790,000. It is not stated
what sum in bills above the denomination of one dollar were issued
after December, 1860; but it is believed that a very large amount
was advanced to the Confederate Government.
The new Constitution, in one of its clauses, expressly prohibits
the payment of any debt "contracted in behalf of the late rebel?
lion. In the present instance, it is impossible to distinguish what
bills were issued prior to and since the beginning of the war. If,
however, no objection of this sort existed, there would be, in my
opinion, no liability on the part of the State to redeem any portion
of these bills. It is true, that the capital was originally furnished
by the State, but the Bank was an incorporated institution, Hable to
sue and be sued, and the bill-holders can enforce the same remedies
against it and make its assets liable as against any other bank. The
obligation of the State to receive bank bills in the payment of taxes,
is qualified by the provision that the banks must be specie-paying
institutions, and no such obligation exists unless the notes are
redeemed in specie.
A bill has already been filed in the Court of Chancery for
Charleston District, by Dabney, Morgan & Co., bill-holders, against
the President and Directors of the Bank of the State of South
Carolina. The Attorney-General called my attention to the fact and
desired to know whether it was my purpose to have an answer filed
in behalf of the State. Entertaining the opinions already expressed,
that there is no liability on the part of the State, I instructed the
Attorney-General that it was my determination to take no notice what
ever of tho proceedings. If the General Assembly should arrive at
a different conclusion, they can adopt such a course as will insure
the representation of the State by counsel upon the trial of the
cause.
THE GREENVILLE AND COLUMBIA RAILROAD COMPANY.
This Company issued its bonds in 1852. 1853 and 1854, to the
-amount of $800,000, and secured payment of tho same by first
mortgage upon tho road. In 1861, when tho debt was about falling
due, the General Assembly authorized the Comptroller-General to
?endorse the guaranty of the State upon tho bonds of the Company
to the amount of $900,000, thereby pledging the faith and funds of
the State for the payment of the principal and interest of said
, bonds-$800,000-to redeem and cancel the mortgage bonds, and the
remaining. $100,000 to liquidate tho then floating debt of the Com?
pany. In conformity to this Act fho first mortgage bonds were all
redeemed except $326,000.
Tho Act provided that these original mortgage bonds, when
taken up and deposited with tho President of tho Bank of the
State, should Bland as security to the State and give the State a lien
under the first mortgage until all the bonds now secured by mort?
gage should be retired. These mortgage bonds were deposited from
time to time as they were exchanged with thc Bank of the State of
South Carolina. The Act further' provides, that when the whole of
the mortgage bonds shall have been redeemed by the guaranteed
bonds, the whole estate, property and funds of the Company within
the State, which they shall then have, or afterwards acquire, shall
stand pledged and mortgaged to tho State without any further act
or deed on the part of the Company, for tho faithful and punctual
payment of these guaranteed bonds, in preference to any other
debt which the Company may owe. ,
The parties holding the outstanding $3?5,000 of original mort
gage bonde, baye neglected or refused to surrender them and take in
their stead tho guaranteed bonds aforesaid. Some of these bond?
holders, representing about $80,000, a year' ago filed a bill iii the
courts to foreclose the mortgage and force the road to a sale. This
was resisted by the Company and by counsol representing the State.
Subsequently a bill was filed by those holding the guaranteed bonds,
very properly maintaining that when surrendered by them the bonds
were simply retired and not redeemed or paid until tho conditions
of the Act were fulfilled; and claiming that they should be permit?
ted to come in and share equally with the original bond-holders in
the proceeds of the sale; and further, that the reservation by tho
State of the original lien for the benefit of tho State should be
declared to inure to their benefit, which would seem to be honest
and proper.
Subsequently, another bill was filed by a clas? of creditors who
represented the second guaranty upon the road. With the view of
having all parties in interest properly before the court, the Attorney
General was instructed to file an information in the nature of "a
cross bill and bill for injunction and relief," in which bill all suits
and creditors were enjoined from proceeding further against the
Company, and required to como in as parties defendant to thc bill
filed by the Attorney-General. It is insisted hi thi3 bill that thc
State, or the parties holding tho guaranteed bonds of the State,
shall be permitted to share equally in tho proceeds resulting from
thc salo of the road and its entire estate, if it should be sold ; and
there is littlo reason to doubt that such will be the decision, since it
is so manifestly just. Any other decision would operate as a fraud
upon the State and the guaranteed bond-holders.
These cases have not been brought to a final hearing, and it is
not known whether the court, at the instance of a very small portion
of the bond-holders, representing less than one-tenth of the general
interest of that class, will permit them summarily to foreclose the
mortgage and bring the road to sale; but I have felt it to be my
duty to lay the subject before you and invite io it your special atten?
tion, in consequence of the large interest which the State owns in
this corporation.
Its interest as a stockholder. $433,900 00
Under tho Act of 1861, in guaranteed bonds, (only
$700,000 of tho $900,000 authorized have been actu?
ally endorsed,). 700,000 00
Under the Act of 18GG, endorsing certificates of in?
debtedness to pay interest and coupons. 203,848*89
Under the fourth section of the Act of 18GG, where
de aands have been surrendered three for one. 41,622 38
Which makes an aggregate of.$1,379,431 27
If an arrangement could be made by which the remaining
$326,000 of original mortgage bonds could be redeemed and can?
celled, there would bo no pressure of creditors which would inter?
fere with the operations of the road for years to come. There could
be no greater misfortune to the public, or no proceeding more ruin?
ous to the State, than that the road should be brought to sale at a
time when the financial embarrassments surrounding individuals
and corporations arc so wide-spread. If a decree should bc made
for its sale, it is not improbable that this large interest of the State
would be entirely lost, and that the people, by future taxation, will
have to make good the whole amount of the guarantees upon the
bonded debt, to wit: $945,029.87.
I therefore recommend that provision be made for the satisfac?
tion o? the original mortgage bonds upon some basis fair and just
alike to the State, the Company and the creditors; or, if that can?
not bo done, that such action may be taken as will to some extent,
at least, secure the large interest of the State in this corporation, in
the event of its being ordered to be sold. I have felt it to be my
especial duty to postpone and defeat the foreclosure of tho mort?
gage, at least until thc subject could be brought ta the attention of
the General Assembly, and ample time be given your body to make
such provision to guard the State against ruinous loss, as in your
discretion may be judicious.
THE BLUE RIDUE RAILROAD.
I commend, with great earnestness, to your favorable considera?
tion thc completion of the Blue Ridge Railroad. This national
highway, intended to connect the great West with the sea, was
commenced in South Carolina long before the inception of any of
the enterprises in the North and East looking to the same end, and
more than thirty years ago enlisted the active energies of the bright?
est intellects of the State. The financial crash of 1837, however,
suspended this great work after it had reached the city of Colum?
bia; but, in 1852 or 1853, it was again revived, a new lino of survey
was adopted and the work was carried on with redoubled activity.
The war alone prevented its completion.
The interest of the State, financially and commercially, in this
undertaking cannot be over-estimated. The stock which it now
owns in the Company amounts to $1,310,000, and unless the work
shall be accomplished, this large sum of money will necessarily
become a total loss to tho State, in addition to losses which will
result from the depreciation of stock in other roads whose prospe?
rity is absolutely dependent upon the success of this undertaking.
In round numbers, the whole amount heretofore expended upon the
road is $3,250,000. The road has been completed, and is in running
order, from Anderson to Walhalla, a distance of thirty-four miles.
Near the latter place it penetrates a spur of the Blue Ridge Moun?
tains by a tunnel a little more than one mile in length, and upon
this tunnel two-thirds of the work has already been completed.
Much of the grading and masonry in the remaining territory of
South Carolina, Georgia and North Carolina, has also been finished.
It is estimated by skillful and competent, s, that the entire
sum requisite io complete the road, put it in running order to
Knoxville, and stock it with motivo and car power, will not exceed
$3,500,000. From Knoxville to Marysville, there is already nearly
completed a section of twenty miles of the road, and it is under?
stood that the Legislature of Tennessee has appropriated a sufficient
sum per mile to purchase the iron and erect the bridges necessary
to complete its construction to thc North Carolina line.
Tho advantages of this route over the Virginia, Maryland, Penn?
sylvania, New York and Eastern roads, are most manifest. The
trains will not be interfered with to the same extent during the
winter season by the heavy freezes which prevail at the North, and
this road may therefore bo worked moro regularly and economically
throughout the year. In addition to these advantages, a very mate?
rial saving will be effected in the transportation of all supplies
seeking a market upon tho seaboard from tho West, and upon all
goods, passengers and emigrants going from the seaboard to tho
West. Cincinnati and Louisville are brought ono hundred miles
nearer the coast by this route than by any other now in operation
or which has been projected. The advantage which this road will
possess over every other terminating upon the Gulf of Mexico, is
manifest. All the supplies carried by theso roads to the Gulf ports
for foroign markets must necessarily round the capes of Florida,
where the navigation is difficult and dangerous, to say nothing of
tho larger consumption of time in reaching tho markets of the
world, and the increased cost of transportation upon steam and
sailing vessels, by tho increased rates of insurance required.
Every consideration, therefore, which can move a people in the
promotion of a great enterprise, should operate upon the citizens of
South Carolina and induce the speedy completion of the Blue Ridge
Railroad. When finished it becomes the great feeder of every
other railroad in the State. It will not only furnish freights for
transportation, but in ? fireat degree add to the trade and prosperi?
ty of every village, town*ana pity in the Commonwealth.
The present bonded debt Of the Company, for which a mortgage jn
^ hasten executed, amounte to about $230,000. But as the road ^
termin?tes upon the edge of the mountains, stops short of any con?
necting lines and is dependent alone upon tho production of a small
tract of . country between Anderson and Walhalla, it has not
yielded a sufficient revenue to pay even the interest upon the first
mortgoge bonds. The bondholders have not yet instituted any pro?
ceedings to foreclose the mortgage, and it will be a most unwise
financial policy for the Stato to allow it to be done and the Road to
be sold out for so paltry a sum, when its sale would transfer all ik&t
has been done, together with the estate and francliittes of the Com?
pany, to strangers, and thereby lose to the State and her citizens
to thc individual stockholders and to the city of Charleston-the
enormous sum of $3,225,000. It is, therefore, indispensably neces?
sary that soino steps should bc taken to redeem this outstanding
debt of $230,000-tho first mortgage bonds-which constitute tho
only existing Hen upon the Company. Tho Legislature authorized
the Conipony to issue bonds under their first mortgage to the
amount of one milfion of dollars; but the Company, exercising a
prudent precaution, suspended tho work about the commencement
of the war, when they had issued, as aHeady stated, only $230,000,
It is highly important that theso bonds should be promptly renewed,
by substituting bonds guaranteed by the State for the principal and
interest, and that steps be taken to resume the work at the earliest
practicable da}', looking to its completion.
THE SOUTH CAROLINA PENITENTIARY.
I transmit you herewith tho report of Major T. B. Lee, Engineer, A
Architect and Superintendent of the Penitentiary, covering the
operations and progress of tho work up to the 1st of January, 1868.
Also, a supplemental report of tho operations of the Penitentiary
from the 1st of January to the 1st of May, 1868. Also, the report
of thc Commission appointed by Major-General Canby to investi?
gate certain charges of harshness and cruelty towards convicts made
against the Superintendent; embracing the minutes of the Commis?
sion, the evidence taken, the opinion of the Board, and accompany?
ing documents.
From the report of Major Lee, it wiU be observed that, although
by tho Act of September, 1866, authority was given the Governor
to appoint three Commissioners, to select a site for the Peniten?
tiary, and an appropriation of $20,000 was made for the erection of
temporary cells, there was Httle or no progress made with the
work until January, 1867. Since that time, the work has been
pushed forward with remarkably energy and economy, and the con?
struction, as far as it has been extended, w?l show a larger amount
of labor performed than was ever before done in South Carolina
for the same amount of pubHc money.
Upon examining tho original report, it wiU be seen that the value
of the work and material on hand up to the 1st of January, 1868,
was $72,171.79, the cost of which to the State, including the j
expense of subsisting and clothing the convicts, paying officers and j
guards, and subsisting the guards, was only $72,139.87. The sup- *
plcniental report shows that the value of work done and material
on Hand from tho 1st of January to the 30th of April, 1868, was
$26,219.47, from which amount is to be deducted the sum of $4,450,
being the worth of material on hand on the 1st of January; and
tho aggregate of expenditure for the same time was $23,004.76,
showing a balance of expenditure in excess of receipts of only
$1,285.20.
This result shows that the convict has not only sustained himself
by His labor, but has placed the State in possession of a building
and material nearly equal in value to thc entire expenditure required
both for the construction of the Penitentiary and the maintenance
of the convicts.
The Superintendent's report also exhibits the gratifying fact that
the cost of supporting a convict, including clothing, diet, guard and
medical attention, since the 1st day of January last, has been only
thirty-four cents each per day; and that the average cost, including
the above items, from the date the first convict was received, is but
forty-one cents per day.
The rapid progress which Has been made in teaching various
mechanical employments necessary to the construction of the build?
ing in all of its parts, as well as for the shoeing and clothing of the
convicts, has enabled tho Superintendent to dispense with all hired
labor, with the exception of foremen of some two or three of thc
most important departments, such as quarrying and laying stone in
the wall. . 4
The entire report will show that this most important State insti?
tution has been satisfactorily administered in all of its affairs, and
promises, if tho same good management is continued, to yield from
the labor of convicts, when completed, a handsome annual revenue
to tho Treasury of the State. The abiHty and fideHty of the officer
in charge of the work furnish every guaranty that it will be-ener?
getically pressed and speedily completed, and with an economy to
which tho people of South Carolina Have heretofore been strangers
in the erection of pubHc works. The great advantage of establish?
ing a Penitentiary is illustrated by the fact that the 280 convicto
sent there, thus far, have not only earned their subsistence, but by
their labor have also materiaUy contributed to the erection of the
prison. These prisonors, but for the Penitentiary, would Have been
lodged in jail, at an expense of at least forty cents per day each,
with no return whatever to the State for this heavy expenditure.
Tho accompanying paper, marked "E," shows that the convicts
in prison on the 1st day of January, 1868, were: Whites 29;
colored 158; total 187. Received between that date and the 30th
of April: Whites 10; colored 82; escaped prisoner recaptured 1;
total 93 ; making a grand total of 280. Of this number, 19 have
been discharged by the expiration of their sentences; 21 Have been
pardoned by the Governor; 4 Have died, and 4 escaped. Remain?
ing in prison on the 30th of April, 1868, 232.
By order of Gen. Canby, the sum of $6,500, monthly, was appro?
priated, subject to the draft of the Governor, for the support of the
Penitentiary and for carrying on the work.
This sum has been regularly drawn, and would have been entirely
sufficient for all purposes, but for the fact that the drafts were paid
in Bills Receivable, and the discount at which they have been sold
has not only entailed a considerable loss, but has embarrassed the
operations of the institution, in materially reducing the monthly
allowance much below $6,500. The appropriation hereafter should
at least cover $6,500 per month in currency; and if the number of ^
convicts is much incrensed, it may be necessary to enlarge the appro?
priation to $7,500 per month.
Full plans and specifications of the building have been submitted
by the Engineer and Architect, and are on file in the office of this
Department. When completed, the institution will accommodate,
with one person in each cell, 530 convicts; with two in a cell, 1,060
convicts, which would not bo an inconvenient number, as the colls
are larger than those in most of the Penitentiaries of the North
and West.
The water power furnished by the canal has aHeady proved valu?
able in transporting granite from the quarry, one mile and a quarter
distant, to the foot of Penitentiary Hill; and also In supplying
motive power for driving cars up tho inclined plane, whereby stone,
sand and other building material are delivered, in tho yard at the
spot at which it is required. A machine shop has Just been com?
pleted on the bank of the canal, the machinery or which will bo
driven by water power. When the outer walls are completed, this
building may be indefinitely extended and every species of mecha?
nical and manufacturing industry operated therein, at Httle or no
expense to the State.
[Concluded in our Next.']