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SUPPLEMENT TO THE PHMIX. WEDNESDAY, OCTOBER 33, 1??73. MESSAGE. FeUoW'citizens of the Senate and JIon.sc of Representatives : I have called together your houontblo bodies by virtue of tho power vested In mo by the constitution of the Stato, which authoi izoa the Governor, " on extraordinary occasions," to convene tho Goneral Assombly. I havo been impelled to exercise this power by my sense of public duty. Tho occasion is nu " extraordinary " one, and Us responsibilities, which attach uliko to tho Legislative and .Exccutivo departments of tho Stato government, will be met, I trust, with a strict regard to tho interests of tho people at largo, from whom they derive their powors. Certain bond creditors of tho State, holding or ropro8onting bonds of so vend classes hav? ing, in the last rosort, appealed to tho Supromo Court to pass upon tho validity of the Stute securities held by thorn, und to afford them tho relief to which they dcomod themselves entitled, the court have decidod that the bonds in quostiou are valid, and thnltho comptroller general shall, " in obedience to tho constitu? tion and laws," levy a tax to pay tho interest on the said several classes of bonds, such levy to bo made before tho 15th day of November proximo, tho rato per centum of tho tux to bo thus levied to bo adequate to liquidate the in? terest past due, and ulso that Tor tho pr?sent year. This jnandamus covers five classes of bonds, amounting in tho aggregate to $3,&49.Q00,(ivo hundred and forty-live thousand of which havo been exchanged for couversion bonds, and are now outstanding iu that form. This decision of tho highest judicial tribunal of tho State, thus invoked by a portion of tho public creditors, would seem to admonish the State government that it should, without do lay, provido for tho liquidation of its whole bonded debt, upon somo practicable basis of adjustment,?houorable alike to the State and its creditors,?or prepare to witness proceed? ings, on the part of those who hold its securi? ties, which must eventuate iu stamping the State?by the docrcos of its own or Federal Courts,?as totally wanting in regard for private rights or public faith. * If tho General Assembly could, by un inBtant exercise of its constitutional powers, destroy every bond that bears upon it tho impress of the great seal of the State, they would thereby confer n very great present benefit upon tho entire people, but it would iK), nt tlio same lime, an act <if nionsirona in justice. There is a tribunal hcfhro which States arc judged, as well us iwlivLhiuK It is the tribunal of pWlic opinion. The verdict c?f impartial and inexorable his? tory is tiindo up from the expressed judgment of fair minded men, delivered on current events. lA't not that verdict be, that tho govern? ment of South Carolina?bused upon a broad recognition of tho rights of man?contracted u largo public dobt to provide for its mainte? nance in the hour of its teeafoness und remorse? lessly repudiates that debt ?"? the day of its assured power. Whilt* 1 do not. for an instant, assume that any honorable Legislator would avowedly ro ptidiaio any obligation of the Slate, yet it ?mist be patent to the world that to refuse, or to fail to provide. Ihu means for liquidating tho public ilpbt, is. in effect, to repudiate it. Further delay to net in tho premises, by mooting the just demands of our public credi? tors, lo the extent of our ability, without im? posing n grievous burden on the people, is to tlx upon South Carolina the stigma of repu? diation, which must indelibly mutk her iislhe shame and opprobrium of Amor can Slates. I would, however, deem myself unmindful of ihe high irott thai I hold from the people, and which they have also conferred upon you, fellow-citizens, us I heir chosen representa? tives, if I were to advise that the dobl of the Stale should be liquidated at its full ascertain? ed amount. The State salisflos tito demands of honor and good faith when it docs nil that its cir? cumstances allow. The existing bonded debt represents, in great purl, an exemption of the people from high taxation during the period of four yours, commencing in 1H<>S. Its liquidation confers upon us vast re? sponsibilities mid solemn duties. These responsibilities and duties wo cannot delegate to others, bul we must net according lo our host understanding, confiding in tbu integrity of our motive-', and in tho just judg? ment of the people, whose rights awl obligations are. alike represented Inj the Uofernment of the Stale. A further and important co isidcriiliou Hint has induced me to convene your honorable bodies in extraordinary session is thai the act, which I have seen by your journals, was passed und rntilicdiil your last nuiiiitil session, withdrawing from the honorable the comp irollur-gonorul nil authority to ordor nny tux luvy, has nuvor reached this department, and hence, hns not become a law, tta was intended by ihu Gouoral Assembly. Tho decision, therefore, of iho Supromo Court, requiring tho comptroller-goncrul to ordor tho ueeossary lovy to jmy tho interest on the iidjtidicalod bonda, on or heioro tho lGth of November proximo, would?if your honorable bodies had not been convened? havo boon imperative upon the said officer, aud ho would thus have exercised a power under tho operation of a statute widen tho law-making department of tho ?Stato gpvorti uiont had clearly shown their purpose to re? peal. I therefore thought it proper tlmt you, as the representatives of tho people in your leg? islative capacity, should be afforded the oppor? tunity iu season, alter further retlectiun. of affirming your previous action iu the promises, rollucling, as you do, tho uirect expression of the popular will. For your information, and for that of tho people of tho State, I have made a thorough .nid exhaustive examination of the various classes of onr public debt, and have prepared tahular statements exhibiting the trim status thereof. Iu this woik I have been nbly seconded by tho unremitting labors of Mr. Waller It. Jones, clerk of the Financial Hoard, to whom I lake this public method of return? ing my thanks for his valuable assistance. It is due ulso to the honorable the treasurer of the Slate, und lo his efficient hook keeper, Mr. T. J. Minton, that I should say that I have been allbrdcd every facility iu making ibis investigation, and thai I have obtained reliable aid from them in acquiring the infer iiiatiou desired. Kvery piece of stock, or bond, cancelled und Ii led in tho treasury, which has been re? deemed, or for which conversion stork or bonds havo been exchanged, has been sepa? rately and carefully examined; its number and denomination noted and compared with the Treasurer's registry of bonds and stocks converted. Hy eliminating from the bonds ami slocks outstanding August I, ISliS, and from those printed since that ]K5riud by Messrs. Murphy's Sous, of Philadelphia, and the American Hunk Notu Company, of New York, such us Imvo been converted mid can? celled, or cancelled umifod, I have obtained n complete registry of the bonds and stocks outstanding ul thu present time. Thu follow? ing statement will exhibit tho present condi? tion ofiho bonded debt: ANTE-RECONSTltUCTION BONDED DEBT. Statement of the Banded Debt August 1, I808, Showing the Amount of K?clt Claas since Converted or Redeemed and the Outstanding tUlottcr, 187?. CLASS. UegMtered Stock.. Regiitered Stock.. Registered Stock.. Registered Stock.. RegMtered Stock... UegMtered Stock... Regutered Stock.. Registered Stock... Registered Stock ? Registered Stock... Registered Stock... Registered Stock... Bond*. Bond*. Bonil*. Bond*. Boud*. Bond*. Boud*. Bond*. Boud*. Bond*. Bond*. UNDER WHAT ACT I 8 S U K D . 1704. Juun I, 1838. December 1??, 18.111. December 21; 18.17. December 21, IHAS. December 21, 18.18. December 22, 18.111. Decent ber 22, iKfiO. January 18ISI. January '?!, 18111. February 6,18?3. September und December, IMfiU., Juno 1118118. Decoinber, 18.13. Doceiuber, 18.1.1. December, 18llii. December, lxM. December, 18.14., December, 18.14. December, 18.14.. December, 18?4. Septeiul>er ami Deceiilber, lsrii;. Sept unit mi und December, 1 sin;.. Kott WHAT I'UlirOSB. Revolution?r? War Claim".: At tttiarleiitou Km- Ihmui.i ICollMtrUi'lloll Neu Slain HiHiHe.! ItSoiiMlmction New Stale Hi huh*..| l(V>IIMtrili*lloU N>'\v StlltU lloilBe.I IConHtruclimi New Stute lloinie. tVllMtrui'tiiMI New State Hianae. j t'.itlrltrilctliill New Stuli- llotlM-. O'lllMtnictliill New State limine. '('oilHlriieilmi New Stale lliiitde. llVllntl Ultimi New Slate House.. KuiiililiK Waal Due Interval ami I'lliu-ip.il.? I Charleston Kliv I,".m. ICuilHlrilcliou New Slain HollMU.? ICollHlrill'tiull New State House..,.I OtllMlrtlltllwII New Slate HnUHe. iAi.t to llllli- Itlllgf Kuilroail. Aid In lllue Itldg? lUilnaid. Aid to lllne Itldite llnllnmil. I Aid to lllue Hill?? Ititilrosd. IAid to Blue Ridge Kuilnmil. j KlindltlK l'a?l Due llltertwt ami I'rilicipnl.. {Funding I'rtHt Duo Interval ami Priiirip.il. Pleasure ls7H 1S77 lK-h 1*83 188.1 1S87 lHhtl IMI2 18811 IStKI 1887 181? In7I 1**1 IH8.1 IXTft 187? 1877 1*7* I87U 1887 18'.l7 S 38,8311 314.4A3 ?j.'hi.ikki lllKI.IKKI -Ji?l,l?*l 2U0.IMKI ?JlHI.IKKI 2UH,INKJ 2lhl,INHI 2"H,M4I 'i"?.IHM| ?.i3 istil 484.444 2.K 1,1? M "iV 1,1 H? I 11,mio 2lKI,IMNI UMIJMII ??'I?I,IH?I ^UU,IHMI 'ilMI^JUU ZMNl.tMMl UtHi.tlMI S * 5o SU.llii no m?,iil4 ?.'<? 17*,'.M8 1)3 i 411,2811 on i4.i?ln no; 124,2.13 7? lril,.17o 142.1 In Mi l: 14,.18.1 in1 211,4411 ixi, See Nell ? ?J,.'iiin on i.imki mi! 32I2.MMI no. 32,11011 IUI] :u.\\>\ iu Sl.iiU IM Total. :|.i,ii|ii,im|8 33 S'.i|.?,72i .111 %i\i,o\*\ uulftjnij POST-RECONSTRUCTION BONDED DEBT. FIRST SUB-DIVISION. Statement of Ante-Reconstruction Floating Debt ami Debt Fuwlublc ander Acts September and. December, August 1, 1808, t- October, 1H7?. lSiiti, Funded Ji'om CLASS. U N D K R W II A T A C T ISSUED. KHK WHAT I'iritl'liSK. Registered Stock I Sept'bcr und Den'r, 18tni.. I Funding I'hhI Due Int. ami I'rill. .8*7; Bond*.|Sept'bcr ami Dee'r, I8U0..I Funding INwl Due int.anil I'riu '1887 Boud*.iSept'lwr and Dec'r, 186?.. Funding I'aat Due Int.ami l'iiii. 18117 Bond*. August 2?, 18118.jKiili-Ulpiioli ltilK Itec. ivuhle.... I Baud*. August 21), 18118. 1'aymeiit Inl-re.i Public pchl.. 1888 Buud*. September 1.1, lMliS.|Funding JliMm Hank Siale. 1888 *fA2,RA4 irj in,n<?i iH? i: ;,?*?) nn ?'iii MM i ik i *. 8/.,.||i; nil ini,ihmi no |,; i a i.ik to o>i 8?.4!? iw M'.i.ihki ini StU'i.87.1 II 8...ihi 111 '.1,1 k hi i m i |li,UHI lm $7 .non 8(C_',i?ni Total. ?Printed by Murphy'.* Sunn, i'liiladelpliia. fin hand* of Kimjiton. 111,41*1 on :;j!i,i?mi {-j UNI J11,4 ?, S7U.4i.11 S7U.41.t ?l 1 IM,/xxi no KCi.tMid i n 1 n 1 i ii mi no 78.1,1111 lilt |,I81I.IMIII no . O-'Sii.-V.! irj ft.?,871.4lli lii>if2,.Fi44,4lli in. Slti!i,77.l 41 ?.111 Total Fillidiiig Stock Imiii'H, ?| lii.-.'ST.:(".. Total Cuuverteil, fli(l,87:l.41. Ilnliuit SECOND SUB-DIVISION. iM..i <fj,74?.S.ln I'At ii Statement of Bonded Debt Created hi/ Recnnateucted Government from August 1, lKW, to October, 187H, nod floads nntf Sforfo Issuett fa C/iaiui'- b'ortn of Hundt d Indebtedness, CLASS. BrgUlcred Slock... Bond*. BouiIn. Bond*. Bond*. Bond?. T V X D K II ! II WHAT ACT Knit WHAT PIUII'CMK. ' S ISSUKIi. - h . < i-M ft c Uarrii 21?, 1K?.1I.|l'onver*loli Stale Sii-lllilien.11888 Aneiiht -IC, ISI1K...IPaymi'iit Int. I'lllillc Debt... Ishk. February 17, IHI5SI. Relief uf Tniuuiry. 1888 Marcli 23, ISfill. Cuiiveniiuii Slate Securilifrt.l 1888 March 'ii, lsr.ti. IpiiiiI Uunimtmioti.Iishm March 1, 1870. i.nml Comiuimiiiiu. 1888 ToUl. SJ..ViO,nnii i?i 1,214/iKI :m 1,1k >! t.( hki im i H,7lMI,INill mi Jimi imhi no .'.nil line ihi Slu'rl/nCt :M sti*.i,i?*i mi r>,iNk>,iNMi im 'ji?|,ihmi im .iimi,i?ki mil 1 Fs l.lill.M-l JlJ S7I1.7KI 2lKl,i ii hi I t an tl.lMMI 7r.,iHHi i;,7.i?m ?$i;.ihhi ?| M ?I.I? HI ,ii|ii,Ihm }J:.S,.',no. . ,1 i.i h ?i im ,um llOt^.'flHI > 17,1 IHI f.m.i.ihmi ihi It I,.1811 .11 s.M;.i?hi ihi 7,1 ij.'.IM? l?l I24.INMI ihi :i4:?.i?. ISI4.lrtJ.58n IU Ss,-jjH..'.a;t :ii||2,:is7,2i?i *l.274.7i?i; S.iihi.uni ?i.i7o..'rfHi Jl,:.7.i,:ii?i <:i,-.'||,iim;i.;H ?fly tranifer. RECAPITULATION. Anto-necon*tnicllon Bondod Dobt,niitntamlinxOctolM>r, 187:'.. ?l,7ti1,7i:i 41 ' Convertinl from Aiiwimt I, Im,?, |o Hi-folier, ta7;l Voct-Becon*tnictliiu Bonded Debt, Kind Suli-Dlvinioii, inilalMiiiliug October, 18711. '.i,7ls,8:in Wi Converted rroiu Auginit I, I8W8, to fR'tuU'r, |SI3 Po*t-R?couatriirtlou Bonded Unlit, Second Silb-DlfMon, nuUluudiug Uctober, 1873. !i,:ill,ns:i ?1 llitiverted from AugiiHt i, I8IW, to (Mober, IH73., TuImI. TuUl.?i:i^.ii,i'.27 :i *S!>.'JO In currency wiw paid iu lu make even auin uf Slot), lielicu real auioillil CuilVeniioll Honda und Slock? iMiied |2^167,2WI 81M2.72I li'.i,77:t 41 1,271,71? Ml <*2,:i87,ia"i ihi It \rill be suou fruin tho preceding Hinte nieni Unit the bonded dohl aggregates $ 1 5, ? 851,027.35, or $300 more than tho amount reported outstanding on tho 31*1 of October, 1872. This diflbrouco is accounted fur by tho issue on tho 18th of November, 1872, of $300 funding stock under tho Acta of September and December, I860. It will also bo seen that I have divided the dobt into two historical pounds, vir..: "Ante-1 Kecoustruction Funded Dobt," ur the amount of bonds and stocks outstanding when the reconstruction government assumed control, end " I'ost-Ueconstruction Funded Debt," or the amount of bonds uud slocks which bear the signatures of tho ollicers of iho recon? structed govornment. This latter debt has been subdivided as follows:, Tho tirst niibdi visiou shows the tloaliug dc\)t contracted by tho nnle-roconstrucled governinont, which the otlicors of tho roconstruclud government found outstanding when they enme into power, und which they converted into a (unded debt by tho issue of bouds and stock h ; the second subdivision represents tho funded debt ac? tually created by tho reconstructed govern? ment, and for which only they are entirely responsible. histokt or thu iioxdko DK1IT. The stock known as tho three jair cents of 1704, was issued Tor the purpose of funding certain debts incurred by the Stute lo aid in carrying on the revolutionary wur. At the close of the war tho United .States govern? ment assumed the debts of Iho Stales, in? curred in carrying on ihc wur. Tho interest upon this debt wua paid by the national gov? ernment to the Stute, und the Stulo disbursed iho amount so received to her creditors. When tho Hank of tho Statu was chartered in 1812 the moneys received from iho United Stales were turned over to tho hank and formed n portion of its tirst business capital. After a few yeurs tho United Stales paid to Iho State the entire principal of this debt, which amount was also turned over to ihe bank, and it was made the duty of the bunk to pay tho interest annually accruing upon these three per cents, and lo redeem the prin? cipal upon prescntution. It is. therefore, nt .-mined that Ibis dobt in a prior lien upon tho assets of the hunk. T.iis stock in held almost exclusively by cili/.ouH of this Stale, having been iu the possession of single families from generation to generation, from 1794 to the present time. Tho Firo Loon stock, amounting lo $303, 343.89, and Firo Loan bonds, amounting to $481,914 31, aro outstanding balances of nn original issue of $2,000,000 of bonds issued ua a loan to rebuild the burnt district of thu city of Charleston Under *Ct of Jim? 1, 1338. The bonds are held in Kmope und matured iu 1808. Tho stock matured in 1870 and is owned by citizens of the United States. In my opinion those bonds and slocks, amounting iu the aggregate to $785,288.20, which nre now puat due aud payable, und also the throe pur cents, milking a tolul of $824,124, are nut an actual, but a contingent, liability of Ilm Stute. Thu uet authorizing the Ishu? of tho " Fire Loan bonds " provides thai " it ahull bu Ihe duty of thu I'rouidcni and Directum of the Dunk of the Stute of South Carolina lo inuko proper provision for the punctual payment of ihe interest of. uuch loan as muy bo effected upon the credit of the State, iiudor the provis? ions of this .act, uud also lor the ultimate redemption of the principal thereof;" uud, further, " that when the protlls of thu said lluuk of tho Suite of South Carolina ahull huve paid ihe interest on certain flocks and re? deemed said stocks (ull of which, Knvo the three per cents, huve been redeemed lone since), for which they huve heretofore been pledged and act apart, the said protlta ahall also he considered solemnly set apart for iho payment of thu interest or. tho said loan uud the final redemption of thu principal there, t." The history ol this loan is as follows: Tho $2,000,000 of bonds wuru issued to the Hunk of the State. Thu hunk through its agent, (Sonera! UcHiitlie, hocured Ihu services id the Ha ring 11 rot hers, of l<uildou, to nogo. liale iliem. Thuy biicoocdud in diH|>oamg of ut um I $1.000,000; thu remainder wiu returned to thu bank, converted inlo registered slock, and Hold iu the Slates. The proceeds of thw Sale ol these bunds and slocks were deposited iu the hank as ? purl of its working capital. Persons desiring to rebuilt] iho burnt district ol Charleston obtained a loan for that purpose from the hank, giving a mortgage upon the property as security for tho loan. The bank received tho moneys from tho salo of tho bonds and stocks; it received the interest upon tho loans made lo tho builders; it re? ceived the principal of tho loans at their ma? turity. In justice, therefore, lo the tax payers of the Slate the assets of tho bank, which have repeatedly been solemnly pledged aud ??et apart for. the redemption of these bouds and stocks, ought to l>u immediately so ap? plied. Iu iho report of ihe officers, of this institu? tion lo the Legislature of 1811 it is emphati? cally asserted " that tho irhole of tho means of the bank stand as security for this loan." The president of the bank in his report to the liOgislniuro of dato July, I.SOS, referring to this subject, very justly observed " thnt u might with propriety be regarded as a debt of the bank rather than a debt of the Stale. Tho bonds and slocks were sold and the funds placed midcr control of the hank, which was charged with the distribution of ihn funds, nnd also tho duly of providing for the pay? ment of the interest ami principal of iho obli? gations as they became due." 'flip I,e?ielnluro, under act of puceniher 21 si, 1805, again pledged and appropriated the assets of iho bank?flisl to the payment of the lire loan bonds iu Kurope ; second to iho fire loan st icks iu America, mid third lo ihc bills ol the bank. Tho Legislature, under act ol September lath, 1808, disregarded this contract with the holders of this loan, and directed the hiiIu of thu assets, under the direc? tion of the tioveruor, tho proceeds to be sub? ject lo the older of tho Legislature; and also HUthorixcd tho funding of the hills issued prior to December 1:0, 1800. The sale of the asHoH was enjoin mi hy Ihn courts, ami the claims of these several classes of Clt'ditolS are siill the subject ol litigation. The whole history of this loan, as read in the annual reports, bull) of the ollicers of thu bank and Ihe comptroller-general, conclusive? ly proves that the interest on ihe loan us it accrued, and Iho principal iih it matured, were made u piofcrrod claim upon tho entire funds of the bank. In 1S4:; the lalo U. M. Formal), then cash* 1 ier of the bank, made a statement showing the proliabl? operation of ihu bunk iu \\\u payment of thu public debt, iu which he showed Unit on thu I.Ht of January, 1870, af tur Ihu redemption of tho Inst instalment of tho Uro loan, thoru would ho a balance of funds, in thu hunk tu tho ainuunl of $2,418, 027.35. I am ownro that tho available assets of tho hank, according to thu reports of thu Leg is la livo commiltoo of 1808, appointed to investi? gate I his matter, if sohl, would probably be insufficient to cancel this entiro iudohledncss, vix., $824,124; but theso facts hnvo been adduced to allow that they should be so ap? plied as far as they will go, and tho deficien? cy, if any, eon'd nflerwurds ho provided for by the legislature. 1 repeat, therefore, thut the lire loan bonds und stocks and thu throe per cunt, stock aro not actual, hut contingent dubts of ihe Stuto. Thu actual debl is thus reduced to $15,027, 503.35. Tho aggregate amount of bonds and stocks originally issued under tho several uetH lilt tbori/.ing the issue of bonds and stocks for tho construction of the new State House was $2,280,000. or this sum $1,034,811.5:1 have Iwen cancelled, mid conversion bonds issued in lion thereof, and $212,000 havo been redeemed, and $1,251,788.41 are now outstanding iu their original form, us will more fully appear hy reference to the state? ment of tho bonded dobt. The Iniih und funds of tho Stute are sol? emnly pledged for tho payment of tho inter? est nud principal of this dobt. Of thu amount outntauding $38.000 of bonds of-1853 aro past due, and no provision hus been made for their redemption. The bouds originally issued under Iho act of 1854. as a subscription to the Blue Ridge Railroad amounted to $1,000,000. Of this sum $34,000 huve been converted und can? celled, and conversion bonds issued in lieu, anil $000,000 aro now outstanding iu their original form. IJuliku the Imnds and slocks previously mentioned, no provision has been made by pledge of the faith or credit of Iho Slate, or otherwise, for the payment of thu principal or interest of these bouds. The bonds and stocks originally issuod under ihe nets of September and December. 1300, for funding the interest and principal of certain bonds und Stocka past due, aggregate $1,100,287.35, as follows : Bouds nialurlnK Iu ls$7. |Aa9,000 00 Heads maturing In ls!)7 . Mt.OOUiHi Stock maturing- Iu IssT. 140.287 tb Total.tl.10o.287 8.'? Tho total amount convened was $150, 073.41, ns follows : Honda maturing In 1N?7. #48.600 00 Honda maturing In isin. i&jUHi no Stuck maturing Iu l?s7. 66 878 41 Tula!.81M.67H 41 Thu tolul balance oulataudiiig is $1,009, 013.04, as follows : llonda maturing la 188". *46.\400 oo lliiiitla maturing in ikvt. 4ft4.;>oo uu Stock muiming In lihl,',. 70,418 04 Total. 8l.ii u4 Tbeae two acta authorized the funding of the inlerest due upon the outstanding bonds und slocks to the 1st July 1807. amounting lo $0011,000.44 ; mid also 'the funding of the principal of the bonds of I8S9, to aid the blue Kidge Railroad, due iu 18tj5, amounting to $310,000 ; also balance of certain UtO?k, amounting to $3,705.40, making u total amount fundiihlc of $1.282,801.00; total funded, $1,100,287.35: balance not yet fm.tied, $110.514.55; additional amounts paid in by purties to make even sums of $100, or $50, $534.17: luSH li notional amounts relin? quished by stockholders, $298 09 ; balance fiiuduble $110.751.03. The bonds originally issued under the act ol August 20. 180S. lo redeem the obligations known a.-- the bills receivable of the State, amount to $500,000. 'these hills were issued under nil ad of December. 1805. Tho amount redeemable under the act of 180S, was $300, 000. t H this sum $208,702 were redeemed by ex-Trou hi iror Hnrker, uml $K2 huve been to devmed hy the present truusiiror, ua cash on Hccounl of tuxes ; there is, therefore, m balance outstanding ol $1.210. 1 It appears, by the reports of the Hnancinl agent, that 111 use bonds were sold for 70 e-i;nt*i on the dollar, realizing $350,000. The total amount of billa redeemed by ihc pre? vious administration was, us before stated, $21(8,702 ; these ought, therefore, to have been a balance of cash lo thu credit of this account on the 30th ol Nuvcmhur, 1872, of $51.208. In comparing the aggregate receipts and ex? penditures of the lasi administration, tins amount is accounted for in the expenditure lor general purpose.', still 1 found it impossible to ascertain ihe object of expenditure to which it was actually applied. Under the net ol August 20. 1S08, in nu ihoricu n loan to pay interest upon the public debt, the Amoricin Hank Note Company printed $2.iiimj,ooo in two issues. The lirst issue amounted to $l.uoo,ouo. On account of some alleged omission, they were not consid? ered ns saleable as were oilier bonds of the State, it was, therefore, determined to pre? pare a second issue of $1,000,000, and lo retire nml cancel the tirst issue. Of ?aid issue $500,000 weru retired and de? stroyed by burning, as appears by the ccrlilicale ol live of the officers of the exe? cutive department; $50,000 were can? celled and arc on flic iu tho treasury ; $450, Oim were never retired, and therefore exislns a debt of tho State. The entire amount of the second issi|0 was also negotiated. The lotn) debt created under this act then amounts to $1,450.000. Of this amount $253,000 have hfen cancelled, and conversion bonds issued in lieu, find $1,107,000 arc outstanding in their original form. In order lo ascertain what proportion of this debt is chargeable tothv aiitc-n const ruc? tion administration, the following inquiries should be made : 1st. The whole period in months from the date iho inleresi was last funded to the dale to which the interest was payable under this act, from the proceeds of the sale of these bonds. 2nd. What proportion of Ibis period be? longed io the uute-reconstriicliou period, and what propoition lo iho |Hi*t-reconstruction period. The language of the act is milter ambigu? ous, bin taken in connection with, the recom? mendation ol liuveruor Scott, in his lirsi mes? sage, which 1 ecommemlalioii it was the evi? dent intention ol the Legislature to adopt, it appeals that i lie proceeds I rum the sale of these bouds wore to be applied to the pay? ment of iuleieat 011 the public debt, accruing from (he 1 hi July, 1.4117, to )ul July, 18811, a period of twenty-four month)*. The interest accruing from July, 1307, to August, 18?8, u poriod of thirteen inuntliH, is chargeable to the ante-reconstruction period, and the intercut accruing from August. 18(18, to July, 18U9. a |>eriod of eleven months, is chargeable to tho post-reconstruction j oriod ; or, iu other words, 111-24 of tho entire debt of $1,450.01111; amounting to $785,41G till}, is chargeable to the former period, and 11-24, amounting to $604,583,334;, is uhurgcublo lo the hitler pe? riod. It may bo proper to stato, in connection with this subject, (hut tho Legislature, ut its session of I SOS-Y,;?, appropriated $50(1,000 for the payment of the interest due for this ssmo period, ho thnt tbcro were really two sources of Income to mcot this indebtedness In comparing ibe amount of moneys iccoived from tuxes, with the moneys expended on ac? count of appropriations for this same period, it appears that tho expenditures, exclusive of tho payments for in (crest, exceeded the re? ceipts from taxes, und therefore, it is nssutned that tho interest was paid from Ilm remaining source of revenue, viz: the proceeds from tho sale of these bonds. Under the net of September 15, 18(58, for funding the bills of the Bank of (bo Slate, iho American Bank Note Company printed $l,fino, 0U0. Of Ibis stun $ 1,259,1100 woro issued, tho others were cancelled unused. Uf tho amount issued $00.400 were converted and $1,189.000 are outstanding in their original form. Tho bonds prepared under the act of Kobnuiry 17. 1809, for the relief of the treasury, uinotinied to $1,000.000, of which $101,000 "were never issued, and uro cancelled and filed in the treasury; $43,000 of the remainder have been oxchunged for conversion bonds and $850,000 are now outstanding iu their original form. Tho stock originally issued under the act of March 23, 1809, for tho conversion of State securities, amounted to $775,700 ; of which $711,700 havo been couvertcd into conver? sion bonds, $6,000 represent stock transferred and $04,000 arc outstanding in tho originul form. Tho issue of tho conversion stock is ex? plained iu this way: when application wtts made to the treasurer by a person holding a iKind of tho Stato to havo Hie same ex changod Tor a conversion bond, tho treasu? rer took up such bond und issued iu lieu n piece of conversion stock of equal amount, which stock was thou cancelled ami exchanged Tor a conversion bond. This roundabout pro? cess was prescribed by the net for the conver? sion of Stale socuritio?. Severnl persons pre? ferred to hold the conversion stock, und. there? fore, did not curry the operation further, which accounts for the outstanding balance of $04,000 before referred in. Of course this amount does nol represent an increase of the public debt, but merely lepresents in another form some .pre-existing obligation. The'entire amount of IhiiuLi issued under the said ucl for the conversion ot Sluto secur itioR was $7,57 U.50O. Of ibis sum $1,011. 500 were Isaued merely to change the form of some pre-existing outstanding indebtedness, iu the furip of bonds and stocks previously authorized, nnd hence do not represent mi incrtU.it of the politic debt. The $34,000 of conversion bonds converted and cancelled uro thus explained. A person holding $i,000 of bonds of differ? ent classes (say funding interest, etc., $300 of the denomination of $100; funding bills liitnk of tho State, $5(10 of the denomination of $50, and eon version, $20o of the denomination of $100.) would present them to iho treasurer, und receive in exchungo a piece of conver? sion stock of the denomination of $1,000. and iu exchange for said stock u conversion bond of upiul amount.. Thus, $34,000 of conversion bonds found their way buck into the treasury, und bonds of tho same class, but larger denomination, found their way into tho market without increasing tho volume uf debt. I repent, therefore, that there nre now out? standing $1,577,5(10 of conversion bonds is? sued in strict accordance with law. w hieb are merely the representatives of bonds und slocks of various classes, und, in the aggre? gate, of equal amount cancelled mid filed ill the treasury. This statement is based upon my personal examination of said Cancelled bonds and slocks, nnd may be relied upon ai accurate in every particular. There are also outstanding conversion bonds lo tho amount of $0,905,000, which repre? sent an actual ?tirrcoar of ll.e public debt. It has been alleged that these bonds wcro hypothecated for security ol loans, by order of tho Financial Hoard, and tho moneys re? ceived therefrom used lo cover the deficit of revenue from taxation, or lo ?'bridge the ehaam " between the receipts nnd appropri? ations, nnd the State hiring unable to redeem the bonds at tho maturity of the loans, they were forfeited and sold, nnd thus, by the amount represented uj>oii their face, increased tho public debt. I will not venture to nssert Unit these alle alums nre entirely :it variance with the facts, because I have liucu unable to gel access to tho records ol the Financial Hoard, or to ascer? tain ihe exact time each particular loan was negotiated, ami the amount thereof, as also the amount of bonds forfeited for wich loan the State failed to discharge at maturity. Hut this I assert with certainty, that more than one-seventh of said amount is accounted lor in another way. It appear*, that on the 7th of December, IR70, the then liensuror of Ihe St.-ite, inn letter addressed lo tho liiiaucial agent, (a copy of which is of record in ihe treasury,) stnted thai the Stale owed a debt of $303,. 343 89, duo iu IS70, known as Kiro Loan Slock, nnd also a debt of $250,0011, due in 1871, known ns Slate Capital Hunds, which debts ti c finaucial board bad instructed him, the treasurer, to discharge, with authority to make whatever arrangements might bo neces? sary therefor. He ticcnidingly placed in said agent's |K)sscssiou bonds for the conversion of Slab; securities, amounting Iu $800,000, directing him to make such use of said bonds as he might deem necessary lo redeem said obligations. The sequel of this arrangement shows that $212.000 of State capital bonds have been redooinoil, $203,000 by the I'.naucial agent, ami $;?,0(io by (ho treasurer. Whether I lit? entire amount realized from the sale or hy|Kilhecntiiin of iho suid $800, 00(1 of con version bonds was barely sufficient to redeem the $212,0011 of Statu capital bonds, (purchusealilo nl that time at n price below SO per cent.,) does not appear. In the absence of evidence lo the contrary, and in? asmuch as no tiro loan slock was redeemed, it may safely bu assumed, thai such was actually tho case. Tho bonds issued under the act of March 27, 1809, for the purposes of the Land Com? mission, amount to $200,000, and under the net of Mnreli 1. 1870, Tor the some purpose, lo $500,000, making a total of $700,000. Of Iho lirst issue $70,000 have been cancelled, and conversion bonds issued iti lieu, and of the second issue $167,000 havo changed their form iu the sameimiuu?r, leaving $4G7,000outstand ing iu their original form. This concludes tho history of the bonded in debt cd ness of I lie State. t'l.OATtSG OKI IT. Tin* hit-rent due anil payable u|m>ii ttio Imnilctl debt, on Ihe Bist of October, lsT'2, n? >>|>|ienrs liy thu ' treasurer's books, oinoiitita t. #1,4'28,914 85 Tim Interim illlii mill payable un tllu him ??( October, 1818, iiiiiouuU tu_ 018,880 88 Total Interest, iiecrtieil and accruing, October 81, I $73. *'2.84'2.491 18 There is also un unfunded balance of $110, 751.03, fuuduble under tho acts of September und December, 180G, which may properly bo included in iho llouling dobt of the State. The .special committee appointed by the Legislature, session of 1872-73, to invest gata the IllUUtlUt ol* outstanding pay certificate? and bills payable, reported that they had ex? amined outstanding pay certificates and bills payable to ihe amount of $4,01,809.98. The committee asked for further time tu continue their examination, which was grunted. It is assumed that there is an additional amount outstanding, which the committee will prob? ably examine uud repot t upon at your presolit session. The total amount outstand? ing may he safely estimated at $000,000. Il is also estimated that there is an unpaid balance of pay certiticates of tho session of 1372-73, amounting to about $100,000. It appears by thu treasurer's books that tho Stale !S charged wilh ihe sum ol $1,797, 352.91, on account of $3,395,000 of bonds surrendered by tho Blue Ridge Railroad in accordance with the provisions of an act of the Legislature approved March '2, 1872. There is also upon the treasurer's book a large miscellaneous flouting dobt. including unpaid freu school fund, aud ail unpaid ap? propriations, not payable us deficiencies after October 31, 1873, which is estimated at about $150,000. BKOAPtTULATIOK. Interval upon ltomled Dvt.t to October 81, lfi7a.vs.iMa.mis Debt ruiulabte uinler Acts 8epteiuher anil December, IS??. . 110,751 08 l'at errllflcatc ? ami bills payable Sessions of IS7U-71, 1-S7I-7ti. 500,000 00 Pay rerttnYatee *eB*i?ii of lh74-7t$.. 100.000 00 Debt due Itlue Kidge Haitrond. 1,797,8.72 V4 Miscellaneous Floating l)?bt. 450.000 00 Total.45,808,897 75 Funded Debt.11^0*27,608 85 FloatlaV Debl. .?>,surt.>:07 7.% A^greRato Flouting and Funded Debt...#4u,33S,9ol u> The passive, or do-nothing policy which has obtaiuod in the treatment of tbe public dobt, since 1371. bus uncpioaliuiiably proved disastrous lo the credit of the Stale. The tux payer, relieved for thu time being from the payment of un extra lux, regarding Ihe bondholder us a parasite, living at the ex? pense of forced contributions from his small und insuflicieul revenue, ?'reaping where he bus not sown," bus been disposed lo lei the debt and thu hi Iders thereof lake care of themselves; hoping thai sumo bonifieent providence would ultiuiutuly ruliove him of the burden; curing little whether relief came from lepudiution or tho assumption of the debt by thu national government. But in tho menu while iho unpaid interest accumulates; the probability of thu assumption of our debt by the national government is remote ; threats of repudiation begin to ansumu tangible uhup? und citizen* arc found bold enough to give them utterance; the bouds of thu Statu are no lunger enquired lor ut thu slock exchange; the credit of thu Stale id lost almost beyond redemption. It is patent to tho unprejudiced mind that unless we propose to adopt iu this Stale that policy which bus made the uamo ol Ihe unco proud Stato of Mississippi infamous iu the commercial markets of tho world, such prompt, immediate action is imperatively demanded as will demonstrate to the creditors of the Stato our honest determination to adjust and sotlle our entiie indebtedness according to our best ability. No one doubts that to levy at this time a tax large enough to cancel our Homing indebt? edness, or even to pay thu accrued and accru? ing interest upon thu bonded dobt. would paralyse the business energies of tho State, and would be equivalent to an actual confiscation of the property of every ciliton. To fund the whole of tho tloating debt at par would increase the public dobt of the Slate. This is expressly forbiddeu by recent amendment (o the constitution, unless two-thirds of thu qualified elector* of the State, voting upon iho ques? tion, should give their assent to such increase. Kvun assuming that their assent to such increase could tic obtained, the present condition and resources of the Stato do pot warrant tho collection of tin annual tax of olaiui nine mills on tho dollar, iu uddition to II other luxes, lo pay interest upon tho public debl. The question then arises what is to bodouo under the circumstances T Thcro aro thoae who even object, strenuously, to Ihe lovy of any lax at all for the present lo pay interest; hut we must either puy or repudiate. If from January 187 1 lo October 1873 does not furn? ish the tux puyora nuDiciout breathing spell to ptepare the way for ihc resumption of tho interest payments, thou three additional yours with nil their interest accumulations will not afford it. But I am satislled that this class of grumblers comprises-but a small minority of the tax payers of tho Stute. They would grumble whether the tax bo one mill ?r Un, Taxation is considered an evil always to bo slimmed; but there are evils murh worse than that. The loss of credit, public and private, the continuation of auch action as will bring discredit upon the lair unmo of tho Stato ami cloud thu honor and ultimate good intent ions of the people with suspicion of dishonorable repudiation. History is pregnant with illus? trations of the fact thai such a remedy is far woiso than the disease. It is irrelevant to our present purpose lo relied upon the way the debl has been contracted, or to estimate what consideration the Stute received in return. The debt exists, uud sound public policy demands that some provision la* made ut once lor ila adjustment. The language of the treasurer of North Carolina in his annual report of November, 1872, applies with peculiar lorco lo tho present condition ol affairs in this State. 1 can do no bettor than quolu his words und recommend their careful perusal uud consideration : " 1 much four, while I do not apprehend