804 



VIEGINIA. 



Legislature at each biennial session, and re- 

 ceive a salary of $1,500 a year, besides having 

 all the direct expenses involved in the per- 

 formance of his duties paid by the State. He 

 is required to devote his whole time in pro- 

 moting the highest educational interests of the 

 State, and visit every part thereof during each 

 year, deliver lectures upon the subject of edu- 

 cation; confer with town superintendents, visit 

 schools in connection with them, and furnish 

 each of them blank forms for collecting school 

 statistics. He is also required to hold a teach- 

 ers' institute in any county on application of 

 twenty-five teachers therein. Town superin- 

 tendents make their reports to him each year 

 on or before the 10th of April, and he must 

 make a full report to the Legislature on the 

 first day of each biennial session. Another 

 act provides for the appointment of teachers 

 and the conduct of examinations, etc., in the 

 normal schools, of which there is one in each 

 of the three congressional districts. Still an- 

 other defines the duties of town superintend- 

 ents, and another provides for the division of 

 public money among school districts. An act 

 providing for a strict supervision of the insur- 

 ance business, another providing for the taxa- 

 tion of the real estate of railroads, and several 

 intended to secure a more efficient provision 

 for the insane poor, were among the other legis- 

 lative acts of the session. The amount appro- 

 priated for the support of the government was 

 $980,000 for two years. 



On the 20th of October, George F. Edmunds 

 was reflected to the United States Senate, re- 

 ceiving the vote of every Senator but two, one 

 of whom was absent, while the other voted 

 for Edward J. Phelps, and a majority of 97 in 

 the Hou^e, out of a total vote of 257. 



VIRGINIA. The most important matter 

 considered by the people of Virginia during 

 the past year related to the financial condition 

 of the State. A joint resolution was passed by 

 the Legislature, and approved April 30, 1874, 

 providing for the holding of a conference in 

 Richmond, on the 10th of November, between 

 the Governor and Treasurer, on behalf of the 

 State and the creditors of the Commonwealth. 

 The object of the conference was " to effect 

 such exact and authentic understanding of the 

 resources and liabilities of Virginia, and to con- 

 sider such propositions for final agreement be- 

 tween the parties interested, as will afford the 

 best attainable security for the rights and in- 

 terests both of public creditors and the Com- 

 monwealth,'" The meeting was held at the 

 time and place indicated, when an elaborate 

 review of the recent financial history of the 

 State was presented by Governor Kemper. The 

 Governor attributed the present unsatisfactory 

 .state of the finances to the effect of the funding 

 bill of 1871. He says: 



The passage of the act of the 30th of March, 1871, 

 commonly called the funding bill ; the circumstances 

 attending its passage ; the exposition then made to 

 the world of the resources of this State by those who 

 stood forth as its organs and representatives : these 



are the causes of all the subsequent misunderstand- 

 ings and of all the criminations under which the State 

 has suffered and now suffers. They are causes which 

 have inflicted equal injury upon all parties concerned 

 in the debt and the credit of the State. When the 

 incontestable facts are disclosed to you, they will be 

 found to constitute a stupendous and disastrous mis- 

 take which you are bound to know in order to pro- 

 tect your own interests. They are the origin and 

 seat of the disease which this conference seeks to 

 remedy. 



The funding bill became a law when nearly all the 

 experienced public men of the State had been shut 

 out from participation in its government. They were 

 practically disfranchised by measures resulting from 

 the late war. Those who legislated for Virginia were 

 generally new men, unused to public affairs, and 

 called suddenly to the control of the most important 

 and intricate financial and other interests. 1 testify 

 that many of those who voted for the funding bill 

 were patriotic and incorruptible men, who acted on 

 the purest convictions. 



At the time of passing this measure the whole in- 

 debtedness of the former Commonwealth amounted 

 to $45,718,119.73. One-third of this amount was set 

 apart for future settlement with West Virginia ; the 

 balance, 30,478,746.49. was assumed as the debt 

 proper of Virginia, and provision was made for at 

 once funding that amount in bonds, with tax-paying 

 coupons, and bearing annual interest at the rate of 

 six per centum excepting sterling debt. The fund- 

 ing bill unconditionally pledged the State to pay full 

 interest on the new bonds to the extent to which 

 creditors should accept them. The annual interest 

 on the whole of the debt proper thus proposed to be 

 funded was $1, 810,540.73,which, added to the amount 

 yearly expended for the support of government and 

 of public schools, to wit, $1,528,295.84, made it ne- 

 cessary to raise an annual State revenue of $3,338,- 

 836.57 in addition to the local taxation before men- 

 tioned. But the result proved that so far from tax- 

 ation at the rate of forty cents on the one hundred 

 dollars sufficing to support the government and pay 

 six per cent, interest on the original debt of $45,- 

 718,119.73, an addition of 25 per centum to that rate 

 of taxation fell far short of enabling the government 

 to pay two-thirds of the interest on two-thirds of the 

 debt. The increased rate of taxation has fallen short 

 of enabling the government to pay full interest on 

 two-thirds of the original debt, by an average an- 

 nual deficiency of $1,062,578.05. If full interest had 

 been hitherto paid on the debt intended to be as- 

 sumed by the funding bill, no more than a balance of 

 $465,717.79 of the annual State revenue would have 

 been left in the Treasury : of that balance, $371,998.- 

 56 would have been absorbed by the mandatory pro- 

 vision of the constitution in favor of public schools, 

 so that only $93.719.73 would have been left annually 

 for defraying all the expenses of supporting the 

 government. 



When a new Legislature had been elected by the 

 people, with special reference to the funding-bill 

 legislation of the previous Assembly, and when its 

 members were convened in December, 1871, they 

 found themselves confronted with appalling finan- 

 cial entanglements which threatened to speedily stop 

 the wheels of the government. The work of issuing 

 the new funded bonds had been rapidly progressing, 

 and influences were being exerted to hasten and 

 urge it forward. It was evident that, if two-thirds 

 of the original debt should be funded in bonds with 

 tax-paying coupons, the coupons would annually ab- 

 sorb the bulk of the State revenues, and the gov- 

 ernment would be left without the means to pre- 

 serve its existence. Thereupon the funding act was 

 so modified as to prevent the further issuing of 

 bonds with coupons receivable for taxes, and to pro- 

 vide for funding the residue of the debt in like 

 bonds, but with coupons not receivable for taxes. 



But, before this legislation took effect, $17,- 



