VIRGINIA. 



823 



Brought forward $2,789,480 52 



Deduct commissions for collecting, etc 18'J,670 02 



2,549,810 50 



Deduct insolvent capitation and property and 

 delinquent land tax 135,789 SO 



$2,414,020 64 

 Deduct current expenses of government 1,000,000 00 



$1,414,020 44 

 Deduct amount due to public free schools 441,757 95 



Net revenue applicable to payment of interest. $972,262 49 



Amount of interest on debt of $29,350,826.38, at 



6 per cent $1,742,865 82 



Deficit $770,603 33 



This $1,742,865.82 does not include the annual 

 interest due on bonds belonging to the literary 

 f\wd, full interest on which would be $84,349.64. 

 If this item be added to the first statement of in- 

 terest as above, the total annual deficit would be 

 $854,952.97. 



The question thus presented was as follows : 

 Shall the rate of taxation upon the values in 

 the State be so far increased as to cover the 

 existing deficiency of nearly a million dollars 

 in the annual revenue, or shall there be a re- 

 adjustment of the debt, or repudiation? The 

 last measure might he set aside from considera- 

 tion, for it would find scarcely any advocates. 

 "There are only two ways," says the Govern- 

 or, " open to us for any honorable settlement 

 by increasing the taxes, or by fair and friendly 

 adjustment with the creditors. Between re- 

 pudiation or any settlement by force on the 

 one hand, and an increase of taxation on the 

 other, I would not for one moment hesitate. 

 The former would bring ruin ; the latter, how- 

 ever much suffering and privation it might cause 

 for a time, would in the end bring prosperity 

 and peace." It was further urged, in reply to 

 those who advocated a State tax of twenty 

 cents, that it could not be collected. The 

 events of the last few years showed it. Vir- 

 ginia, as the principal arena of the armed con- 

 flict between the States, was left by the war in 

 a condition of prostration and poverty wholly 

 unparalleled in any other Southern State. She 

 was shorn of a large portion of her population 

 and territory, as attested by the existence of 

 West Virginia. No equity, nor justice, nor 

 mercy was exercised toward her, either by her 

 creditors or their agents in and out of the Le- 

 gislature, as is established by the funding bill, 

 which, so far from abating war interest, capi- 

 talized that and other interest as part and par- 

 cel of a new principal debt as great as that 

 pretended to be decreased. That any of the 

 debt was even pretended to be deferred until 

 a settlement between Virginia and West Vir- 

 ginia (as to that portion) should be effected, is 

 proof enough that the whole debt should have 

 been postponed to an adjustment between the 

 two States. That Virginia was solely and 

 wholly to be victimized in this transaction is 

 evident from the entire exemption of West 

 Virginia from all trouble and responsibility 

 in the matter. The State taxes, in the mean 

 time, have been kept up to the rate of five 



mills on the dollar of assessed values, with a 

 constantly decreasing currency, a rapidly di- 

 minishing market price for lands and all they 

 produce, and a widespread prostration and 

 stagnation in all enterprise of every kind. 

 The principal staple, tobacco, has been and 

 still is burdened with an unconstitutional and 

 discriminating tax, amounting to the enormous 

 rate of twenty-four cents on the pound ; so 

 that, under this burden, what was once the 

 chief money-crop, best adapted to the soil and 

 climate, is now unable to realize the cost of 

 production. A bondholder who was a citizen 

 expressed the following views on the ques- 

 tion : 



There are but two modes to settle the State debt. 

 One is, to raise the taxes thirty or forty cents addi- 

 tional to the present rates, in order to carry on the 

 government, keep up the schools, and pay the in- 

 terest upon the unfunded debt, and arrears of inter- 

 est now due. Now, the condition of our people in 

 South-side Virginia is such that they can bear no 

 more than they now pay, and even the present tax 

 is so onerous that the public officers have great diffi- 

 culty in making collections ; and when property is 

 levied on for taxes, very often it can not be sold at 

 all for want of buyers. Eeal estate, if now reassessed, 

 would not generally be assessed at more than half 

 the present valuation ; for our lands are going down 

 lower and lower every year indeed, often can not 

 be sold at any price, and if sold scarcely ever paid 

 for, and generally fall back into the hands of the 

 seller. I know of many fine tracts of land that have 

 been sold for two, three, and four dollars per acre 

 which formerly brought twelve and fifteen dollars 

 per acre, and which are now taxed at seven and eight 

 dollars valuation per acre. Individually I would not 

 regard a considerable increase of taxation in order to 

 pay the interest on our public debt ; but I know our 

 farmers generally could not stand any further in- 

 crease without very great suffering in fact, I do not 

 believe twenty, thirty, or forty cents additional could 

 be collected at all; and, without some greater un- 

 expected improvement, I think the present rate will 

 be annually more difficult to collect. 



The other mode of settlement is by a fair and just 

 readjustment of the whole debt, funded and unfund- 

 ed, and I think the simplest way is the best. Put 

 the funded and unfunded debt upon the same footing 

 exactly, and the arrears of interest, including the un- 

 funded debt to "West Virginia, as was done in the 

 funded coupons, and make one consolidated debt of 

 the whole, and pay 4 per cent, upon the amount, 

 after support of State government and schools. Issue 

 new bonds to effect this object, and let these bonds 

 be taxed as other property, ana abolish for ever the 

 tax-redeemable coupons, the most odious feature in 

 the ever-to-be-lamented funding bill. This plan, or 

 one similar, I am sure would meet tbe approval of a 

 large portion of the State's creditors, excepting per- 

 haps a number of funded bondholders who bought 

 their bonds in past times at very reduced prices. 

 The expenses of the State and county governments 

 reduced to the lowest reasonable amount, biennial 

 sessions of the Legislature, and the present rate of 

 taxation, or a very small increase, will effect this ob- 

 ject, which I am certain would be sanctioned by a 

 large majority of our people. 



The views of the Governor were delivered in 

 his message to the Legislature. He said : 



It would be wrong for us to shrink from a full and 

 square view of this matter of increase of taxation. 11 

 is not the part of wisdom to unreflectingly annoi 

 our favor of increased taxation, without considering 



