VIRGINIA. 



763 



authorizing the Governor "to tender to tho 

 State of West Virginia an arbitration of all 

 matters touching a full and fair apportionment 

 between said States of the said public debt," 

 and providing that, "in the event of the ac- 

 ceptance of such offer of arbitration by West 

 Virginia, the Governor, Lieutenant-Governor, 

 President of the Court of Appeals, Auditor of 

 Public Accounts, and the Secretary of the 

 Commonwealth, should appoint two arbitra- 

 tors on the part of this State, who shall not 

 be citizens of this State, to meet any two arbi- 

 trators selected by West Virginia, not citizens 

 of said State. The arbitrators so appointed 

 shall, if they deem it advisable, appoint an 

 umpire. Said arbitrators and umpire shall, as 

 soon as practicable, proceed to adjust, award, 

 and decide, upon fair, just, and equitable prin- 

 ciples, what proportion of said public debt 

 should be paid by West Virginia and what 

 part thereof should be paid by this State. Said 

 apportionment, when ascertained and made, 

 to be reported by said arbitrators to the Legis- 

 latures of said States, for their ratification, and 

 to enable them to carry out such award or 

 apportionment, so ratified, by appropriate legis- 

 lation." 



The opposition to this arrangement was 

 directed mainly against that part which re- 

 quires a ratification by the Legislature of the 

 terms agreed upon, many 'members contend- 

 ing that the result of the arbitration should be 

 final. The vote on this resolution in the Sen- 

 ate was 31 to 4, and in the House of Delegates 

 90 to 0, a part of the preamble, alluding to 

 previous efforts to secure an apportionment, 

 having been struck out in the latter body, as 

 well as the provision for a ratification of the 

 decision of the arbitrators. There was much 

 opposition to a concurrence in these amend- 

 ments in the Senate ; but the point was finally 

 conceded, and the resolution received the ap- 

 proval of the Governor. 



During the discussion on this resolution 

 there was no hint of a disposition to repudiate 

 any obligation of the State ; but, as soon as it 

 was disposed of, a proposition was made that 

 an offer of a compromise be tendered to the 

 creditors, on the basis of the payment of fifty 

 cents on the dollar. This, however, met with 

 little favor, and a bill was introduced provid- 

 ing for the funding of two-thirds of the public 

 indebtedness, standing in the name of Virginia, 

 which would cover approximately the portion 

 which this State is bound to pay, leaving the 

 rest to be provided for when a settlement 

 should be made with West Virginia. This 

 bill, which was prepared by the Finance Com- 

 mittees of both branches* of the Legislature 

 working together, provoked a long and ani- 

 mated discussion, but was finally passed, after 

 considerable amendment, by a strong majority, 

 in both Houses. The bill, as passed, provides 

 that the owners of- 

 the bonds, stocks, or interest certificates, hereto- 

 fore issued by this State, which arc recognized by its 



constitution and laws as legal, except the five per 

 cent, dollar bonds, and what are known as sterling 

 bonds, but including the stock of the old James 

 River Company, and the bonds of the James Eiver 

 & Kanawha Company, guaranteed by the State, may 

 fund two-thirds of the amount of the same, together 

 with two-thirds of the interest due or to become due 

 thereon, to the first day of July, 1871, in six per cent, 

 coupon or registered bonds of this State, of the de- 

 nominations of one hundred, and multiples thereof, 

 dated that day, and to become due and payable in 

 thirty-four years after date, but redeemable at the 

 pleasure of the State after ten years, the interest to 

 be payable semi-annual ly, on the first days of Janu- 

 ary and July in each year. 



It is further provided that 



Upon the surrender of the old and the acceptance 

 of the new bond for two-thirds of the amount due, 

 as provided in the last preceding section, there shall 

 be issued to the owner or owners, for the other one- 

 third of the amount due upon the old bond, stock, 

 or certificate of indebtedness so surrendered, a cer- 

 tificate bearing the same date as the new bond, set- 

 ting forth the amount of the bond which is not 

 funded, as provided in the last preceding section, 

 and that payment of said amount, with interest 

 thereon at the rate prescribed in the bond surren- 

 dered, will be provided for in accordance with such 

 settlement as shall hereafter be had between the 

 States of Virginia arid West Virginia, in regard to 

 the public debt of the State of Virginia existing at 

 the time of its dismemberment, and that the State 

 of Virginia holds said bonds, so far as unfunded, in 

 trust for the holder or his assignees ; and provided, 

 further, that until such final settlement with West 

 Virginia, there shall be paid, upon what are known 

 as sterling bonds, in the manner now prescribed by 

 law, two-thirds of the interest accruing on the prin- 

 cipal of said bonds, after July 1st, 1871 ; and for the 

 interest accrued to said date, certificates, dated on 

 that day, shall bo issued, drawing the same rate of 

 interest as the bonds, two-thirds^ of which shall be 

 paid as provided to be paid on the bonds. The re- 

 maining one-third of unpaid interest, both on tho 

 bonds and certificates, shall be payable in money, 

 and the principal of said certificates in new sterling 

 bonds of the same character as the old, in accordance 

 with such final settlement as shall be made with 

 West Virginia. 



The other portions of the act direct the car- 

 rying out in detail of these provisions, and 

 create a sinking-fund, to be applied to the 

 payment of the debt. All sums realized from 

 the claims of this State against Selden, Withers 

 & Co. and the Chesapeake & Ohio Canal Company, 

 and'from the sale or disposition of the stocks and 

 bonds, and debts owned by the State in and against 

 all railway and other improvement companies, and 

 all sums which may be realized from the claims of 

 this State against the United States, and from any 

 Bales of any real estate now belonging to the Com- 

 monwealth, are to be paid into the Treasury of ths 

 State to the credit of the sinking-fund. In the year 

 1880, and annually thereafter, until all the bonds 

 issued under and by authority of this act shall have 

 been paid, there shall be levied and collected, the 

 same as other taxes, a tax of two cents on the one 

 hundred dollars of the assessed valuation of all the 

 property, personal, real, and mixed, in the State, 

 which shall be paid into the Treasury of the State to 

 the credit of the sinking-fund. The Treasurer, tho 

 Auditor of Public Accounts, and Second Auditor, aro 

 appointed commissioners of the sinking-fund, and 

 shall have (a majority acting) the control and man- 

 agement thereof, and shall annually, or oftener, apply 

 whatever sum or sums may be to the credit of the 

 sinking-fund to the purchase and redemption of 

 bonds issued by authority of this act. 



