780 



TENNESSEE. 



In 1877, for counties $1,271,561 23 



lu 1877, for cities and towns 1,044,467 90 



Total local taxes, 1877 $2,416,619 05 



In 1S7S, for counties $1,392,888 89 



In 1S78, for cities and towns 991,407 03 



Total local taxes, 1878 $2,1 84,295 97 



" These figures," says Comptroller Gaines, 

 "are really appalling, especially when it is 

 considered that they do not include all the 

 counties and corporations about one tenth of 

 them (in valuation) having failed to report. 

 It would seem, indeed, as if the simple state- 

 ment of these figures would be sufficient to 

 create an overwhelming public sentiment de- 

 manding no more debt, and a rigorous econo- 

 my in current expenses of counties and cor- 

 porations. The devices, however, by which 

 debt is created and taxes increased, are legion, 

 and they are so skillfully managed that no one 

 seems willing or dare raise his voice against 

 them." 



Tennessee is burdened with a heavy State 

 debt. Grave questions have been raised as to 

 the nature and extent of the State's liability 

 on the bonds which have been issued by it, 

 and as to what course should be pursued with 

 reference to the bonded indebtedness. At the 

 ^beginning of 1879 there were outstanding 20,- 

 219 bonds, amounting to $20,221,300. In ten 

 years the State has paid three installments of 

 interest, and seven are past due, amounting, 

 after deducting $149,050 paid to educational 

 and charitable institutions, to $4,052,717, mak- 

 ing a debt, principal and interest, of $24,274,- 

 000. In his message to the Legislature of 

 1879 the retiring Governor, James D. Porter, 

 said: 



The settlement of this debt is paramount to all 

 questions of legislation that can engage the atten- 

 tion of the General Assembly ; it involves the honor 

 find good name of the State, the credit and honor of 

 every one of its citizens ; it is a liability that was 

 voluntarily contracted, and, whether it was wisely 

 created or not, can not now be a question. I hold, 

 and have always believed, that in the light of moral 

 and legal duty, as a question of commercial honor 

 and of State pride, the best settlement of the debt for 

 Tennessee would be to pay the entire debt accord- 

 ing to the terms of the contract ; this would be a 

 heavy burden, but when it became oppressive a tem- 

 porary suspension of the interest payment could be 

 made, and with a return of prosperity, with a mod- 

 erate increase of populatipn and a reasonable devel- 

 opment of our resources, now in full fruition, the 

 whole debt could be paid without serious embarrass- 

 ment to any one. But the creditors themselves have 

 relieved the State of the necessity of providing for 

 the entire debt bv offering such an abatement of the 

 principal as to bring its payment within the ability 

 of the State, without making it burdensome. In 

 December, 1877, certain creditors of the State pro- 

 posed to adjust that part of the debt held by them- 

 selves, upon a basis of fifty cents for principal and 

 past-due interest, and offered assurances that the 

 Teat body of the creditors would accept the same 

 terms ; this proposition was submitted to an extra 

 session of the Fortieth General Assembly, and its 

 acceptance earnestly recommended. I am satisfied 

 that the creditors making this proposition would 

 still make the adjustment; settled at fifty cents, the 

 debt would amount to $12,137,000 : the annual inter- 



est upon this sum, at six per cent., would amount 

 to $728,220. I do not hesitate to again urge the ac- 

 ceptance of this proposition. 



I can not be mistaken in the opinion that the peo- 

 ple of the State are anxious to be delivered from a 

 further discussion of this question, and from a longer 

 postponement of its settlement. If this recommen- 

 dation is adopted, the Comptroller should be invested 

 with authority, after a day to be fixed by law, to 

 make publication, with notice to financial agents of 

 the several counties, announcing the number of old 

 bonds returned and canceled, with the number of 

 new bonds issued, and the amount of revenue to be 

 provided to meet the interest, with the amount as- 

 signed to each county ; upon this publication and 

 notice, the County Courts should be required to 

 make the necessary levy to meet the interest, with- 

 out further legislation. 



A committee of the Legislature, appointed 

 to investigate the extent and character of the 

 bonded debt of the State, made an elaborate 

 report early in 1879, giving among other facts 

 and opinions the following : 



And, first, we are directed to investigate and re- 

 port: 1. As to when and for what purpose were the 

 bonds now outstanding against the State of Tennes- 

 see originally issued ; what amount of said bonds, 

 when issued, were a part of the State debt proper, 

 and what amount were railroad bonds, as they were 

 distinguished in all official reports, messages, etc. f 

 up to the late war, and what part are post-bellum 

 bonds. 



In answer, we beg leave to say that there are 

 outstanding bonds of the State, which have been 

 presented, registered, and renewed, to the number of 

 20,219, amounting to $20,221,300, and that there are 

 outstanding bonds which have not been presented, 

 registered, or renewed, to the number of 789, amount- 

 ing to $789,000. These bonds were issued all along 

 from January 1, 1833, to 1875 or 1876, under the act 

 of 1832, act of 1836, act of 1835-'36, act of 1838, act 

 of January 30, 1850, act of 1851-'52 and amendments, 

 act of January, 1852, and March, 1854, nnd also un- 

 der acts of 1848, 1850, 1852, 1854, 1856, and 1860, act 

 of 1866, 1867, 1868, and 1873. 



The State debt proper } as known' before the war, 

 was composed of bonds issued for the stock of the 

 State in turnpike companies', in railroads, in banks, 

 for the construction of the Capitol, for the purchase 

 of the Hermitage, and to the Agricultural Bureau. 



Specifically, there were issued to the Union Bank 

 of Tennessee, for stock of the State therein, un- 

 der the act of 1832, 5 per cent, bonds to the number 

 of 500 ; to the Bank of Tennessee, under act of 1838, 

 6 per cent, bonds to the number of 2,500 ; to build 

 the Capitol, under the nets of 1848, 1850, 1852, 1854, 

 1856, and 1860, 6 per cent, bonds to the number of 

 1,166; to purchase the Hermitage, under the act of 

 1851-'52, bonds to the number of 48; to Agricultural 

 Bureau, under act of 1851-'52, bonds to the number 

 of 30 ; for stock in various turnpike companies, 

 under the acts of 1835-'36 and 1838, 5, 5J, and 6 per 

 cent, bonds to the number of 1,386 ; for stock in the 

 Hiawassee .Railroad Company, under act of 1838, 5 

 per cent, bonds to the number of 449 ; to the East 

 Tennessee and Georgia, 201 ; for stock in Lagrange 

 and Memphis Railroad Company, under act of 1835 

 -'36, 5^ per cent, bonds to the number of 110, and 

 underact of 1838. 90 5 per cent, bonds. The above 

 sums, aggregated, make 6,481 bonds, amounting to 

 $6,485,716. Quite a number of these bonds were 

 taken up before the war, some have been taken in 

 and canceled since, and some have been renewed 

 under the funding acts of 1866 and 1873. There are 

 still outstanding, by virtue of renewals, funding, 

 etc., of the bonds issued to the Union Bank, 125 ; of 

 those issued to the Bank of Tennessee, 214 ; of those 

 issued to build the Capitol, 493; of those issued to 



