Page images
PDF
EPUB

repudiated. The debauchery during the years succeeding the war was so great, and the over-issues so enormous, that the exact debt was never ascertained. From about $4,000,000 in 1867, the debt suddenly rose to an estimated amount, in 1870, of $30,000,000, for which the State had little to show. Of course this was an enormous sum, and much of it was not binding on the State either morally or legally. Then ensued a long period of litigation and attempts at compromises with the bondholders. A compromise at fifty cents on the dollar was agreed on, but before it was entirely carried out the State failed to pay interest on the new bonds, and this further complicated matters. Of the old debt $6,000,000 issued entirely without warrant of law were repudiated in toto. Finally the entire debt was fixed at about $7,000,000, which represented the scaling down of about $22,000,000 which had been declared wholly or partially legal. The total repudiation was over $17,000,000, including the bonds declared invalid.

Georgia's

Experience

The case of Georgia is somewhat peculiar. The State had little debt after the war debt had been declared incollectible, but the carpet baggers got promptly to work. The Constitution of 1868 forbade the State to purchase stock in any corporation, or to lend its credit to any corporation, unless it got a first lien on the property, and, in addition, that its bonds should at least be equalled by the holdings of private parties. This looked fair enough, but in execution there was little attention paid to these strict provisions. Bonds were granted to many railroads, and, in some cases, issued before the road was built, sometimes twice on the same mileage, and sometimes when there

was no railroad at all. When the carpet

baggers lost control, an investigation was made. It appeared that in very many instances the law had not been complied with, and the bonds in such cases were promptly repudiated. It is a little difficult to get at the total, but including interest it was about $10,000,000. The Georgians say this was not repudiation, as the debt never legally existed.

Louisiana's re- Louisiana is in many remarkable Debt spects the most remarkable example of all the States. Its record during reconstruction days was of the

most unsavory kind, and it would be impossible to give more than a hint as to what took place. The necessity for levees along the Mississippi made a large debt necessary early in the history of the State. In 1840 the debt was over $23,000,000, including sums granted in aid of banks, railroads and levees, but some of these investments were good, for in 1861 the debt was only about $10,000,000, which was increased about $1,000,000 during the war for non-military purposes. The legislature ran riot for several years. Although the Constitution forbade a larger debt than $25,000,ooo, the schemes were so many that this was not enough to go round. In 1871, the total debt was found to be nearly $42,000,000. There is something cheerful about the way in which these legislators in the South piled up debts by the million. It was easy got and the payment was left to posterity. Such an enormous load of debt was impossible for a state to carry. In New Orleans the taxes rose to over five per cent., and the people demanded an investigation. Of the subsequent history of the State, up to 1876, much has been written, but there are few who understand it, so full is it of incident that it makes an honest man blush. There was a great deal of litigation over some of the debt, much was declared to be illegal, and several offers of compromise were made as to the rest. Finally a settlement was made, and the debt was fixed at $13,000,000, the total repudiated or scaled down as to principal and interest amounting to about $27,000,000. This is one of the banner states in the country in this respect.

Arkansas' Strug- Arkansas was another

gle with Debt State that got into trouble before the war by aiding banks and levee companies, but did not begin repudiating until after the war. The carpet bag leglarge debt in aid of railroads, some of islatures then got to work and piled up a

which was declared unconstitutional, and finally, in 1884, the people passed an amendment to the Constitution making it illegal to pay principal or interest on bonds issued to corporations. The total thus repudiated amounted to about $13,000,000, including accrued interest. Arkansas had few resources and the debts were beyond her ability to pay, but she made no discrimination between good,

bad, and indifferent, as all the investments turned out be poor.

Tennessee's Unsavory Record

Tennessee got badly into debt helping corporations before the war. In 1861 the State debt was about $21,000,000. Ten years later it was about $43,000,000, the increase being due largely to the aid given to railroads. These roads got into trouble as usual, but the State made an arrangement by which the State bonds were partially exchanged by the companies for their own bonds, which reduced the indebtedness by 1873 to about $28,000,000. This was more than the State was able to carry, and refunding was resorted to, and for a time it seemed as if the State might get along without repudiation, but the panic of 1873 made matters worse and the State prepared to scale down its debt. There was litigation besides experimenting for some years, when someone discovered that some of the bonds had been illegally issued. This was rather late to make

such a discovery, but it was claimed that over $11,000,000 were void. Many plans were proposed for reorganization, and curiously enough there was a spirit of chivalry that in every case provided that certain bonds held by Mrs. Polk, widow of the president, should not be touched. The debt issue got into politics and on this State issues were made for a long time. One effort was made to take care of the debt in a tolerably honest way but it failed. Finally the entire debt was scaled in different proportions from twenty-one to fifty per cent., the latter representing bonds issued to fund unpaid interest, as well as a large amount of bonds issued in aid of the railways. The total repudiation amounted to about $9,000,000, which was doing better than other states have done with smaller debts.

[blocks in formation]

the continued devastation of both armies, so that at the close of the war its condition was deplorable in the extreme. It had lost the western counties out of which the State of West Virginia had been formed and which had suffered least during the war. It was out of the question to pay interest on the outstanding bonds, and the principal and interest in 1870 amounted to over $45,000,000. At this time an effort was made to financially rehabilitate the State. To begin with, one-third of the bonds were turned over to West Virginia to pay as its portion but the new state naturally refused to pay them, though there may have been a moral obligation to do so. States however do not hanker after paying debts of that kind, and the West Virginians claimed that the old state should pay them as its price for the experiment of secession.

Refunding

Tried First

The legislature provided for a refunding of principal and interest of the remaining two

thirds of the debt and made a manful effort to pay it, but had hardly got fairly started when the repudiationists got to work. The original refunding act allowed coupons of the bonds to be used in paying taxes. A subsequent act forbade this but was declared unconstitutional. This resulted in a great portion of the coupons being turned in in payment of taxes so that the State had little money to pay the expenses of government and the remainder of the interest. Then began a warfare on the original refunding act which lasted for many years and became the chief issue in the politics of the State and is still a factor. The Read

justers, so called because they proposed to make a new settlement of the debt, entered into politics and got control of the State. Senators Mahone and Riddleberger were elected on this issue and by reason of the close vote in the Senate Virginia's debt at one time was an important factor in National politics. Both of the Readjuster senators affiliated with the Republicans and gave that party a majority in the Senate at an important

crisis.

[blocks in formation]

large. They figured it out at about $20,000,000 instead of $31,000,000. Thus$11, 000,000 more were repudiated. The Readjusters also passed a law which in effect prevented the use of coupons for paying taxes and it was sustained by the Supreme Court of the United States sufficiently for the Readjusters' purposes. Coupons could only be used under circumstances that seldom occurred and involved litigation that made them too expensive to be commonly used. This was a clear fraud on the bondholders, and finally the Readjusters were driven from power. A new Act was passed which in part redeemed the credit of the State by making partial amends for the Readjuster repudiation. New long-time, low interest bonds were issued which if paid will in part redeem the honor of the State. It is hard to figure out just how much the State has repudiated outside the sum that West Virginia was asked to pay but declined, but it is in the neighborhood of $20,000,000.

Michigan and

The two Northern States

Minnesota that have repudiated are Minnesota and Michigan, but perhaps only technically so and for small amounts. Minnesota aided a railway to the extent of over $2,000,000 early in its history, and of course the railroad failed. Then the State refused to pay the bonds for a long time, and finally did pay fifty cents on the dollar, it being alleged that this was all that anyone ever paid for them, and that in so doing it paid all that honor demanded, as the State got little benefit from their issue. Michigan's case was much simpler. Some of her bonds issued long ago were put in the hands of a banking house to sell. A few were sold, but before the State got payment the bank failed and the State got none of the money. A few of these bonds were sold abroad, and the State refused to pay them, on the ground that they had received nothing for them. This was straining a point, and one can well believe that it would have been much better to have maintained an untarnished credit by paying the innocent holders of the State's bonds.

[blocks in formation]

does not excuse the States for all their repudiation. Not all the debts were piled up by carpet baggers, and natives were in many instances responsible for some of the steals. The South should remember that for the first time in history after a civil war the victorious party did not put to death the leaders of the revolt. Germany in 1871 made France pay an indemnity of $1,000,000,000. The pun

ishment to the South came in another way, though it was of no credit to any concerned in it. The total repudiation was about $150,000,000, which was after all small compared with what France really did pay.

One result of these repudiations has been that every State Constitution has provisions looking toward a prevention of such trouble in the future. In nearly all there are provisions against lending the credit or making appropriations to corporations, and in nearly all the State debt is limited to a small amount and for specific purposes. In Pennsyl

vania the State can create no debt whatever for any purpose other than military, to repel an armed invasion. This proves very embarrassing just now, for the capitol has been burned to the ground and no debt can be created to build a new one. As the ordinary revenues are not larger than the demands of the State, it has been found necessary to devise new taxes in order to get the money to erect a new building. In this case it would be legitimate to issue bonds for the purpose, but people are well satisfied to go without a debt and put up a building on the pay-asyou-go plan.

Credit is Essential

While the States have had a very unfortunate history with their debt, the lessons have been learned probably for all time, and it is to be hoped that nothing will ever again occur to shake our credit. The people in the last election in effect decided to pay in gold the national bonds which could legally be paid in silver at half the price. It is better to be jealous of one's credit either as a man, a corporation, or a State, than to avoid payment by technicalities. A reputation (national or individual) once broken may possibly be repaired, but "the world will always keep its eyes on the spot where the crack was."

JOSEPH M. ROGERS.

OUR COAST DEFENSES, AND THE UNITED STATES COAST SURVEY

BY MAJOR-GENERAL NELSON A. MILES

HE coast of the United States may, for convenience, be diIvided into four regions: The Lake coast, having thirty-seven cities, with an aggregate population of 2,525,893, and an aggregate wealth of $2,624,408,022; 2. The Atlantic coast, with seventy-five cities, population 6,640,532, and wealth $6,899,512,748; 3. The Gulf Coast, with eight cities, population 354,182, wealth $367,995,098; 4. The Pacific coast, eleven cities, population 527,223, wealth $547,784,698-a total of 131 cities, with a population of over 10,000,000, and aggregate wealth exceeding in value $10,

000,000,000.

The principal seaport cities have had for many years no adequate means of defense. In 1886 the Board of Fortifications reported 2,020 sea-coast guns on hand, available for use, exclusive of seacoast mortars, all of which were essential for the protection of torpedo-lines and the defense of the major and minor ports. The number of men necessary to arm them in time of war was estimated at 52,236, or about 2,500 in time of peace. But many of these guns were obsolete and of little value, and not a few of the batteries could not stop a single first-class ship-of-war, much less a fleet equipped with modern appliances.

The fact that the entire system of warfare had changed within a generation; that European countries had increased their navies in recent years; that the ports of the United States were no longer able to resist the invasion of a foreign foe; and that in case of attack great loss of life and property would ensue, to say nothing of possible occupancy by the enemy, the consequent destruction of commercial interests and the payment of an indemnity-all these aroused the nation to a sense of its insecurity and to the necessity of multiplying and strengthening its coast defenses.

Accordingly in 1885, induced by urgent representations on the condition of the coast defenses from civilians and military and naval officers, Congress directed

President Cleveland to appoint a board to investigate and report measures to place the seaboard in a state of defense. This board-known as the Endicott or Fortifications Board-reported in 1886. The report thoroughly covered the ground of inquiry, and its recommendations named the ports requiring fortifications, the nature of the needed works, the number and character of the guns and mortars required, and the probable cost of all. The estimates submitted included equipment for twentyseven ports, and called for permanent works, to be armed with 677 high-power guns and 824 modern mortars. amount of money required was $97,782,800, exclusive of $28,595,000 for floating batteries; $21,500,000 was to be made available in 1886, and thereafter the annual appropriations were to be $9,000,000. This report still stands as the projected system of the coast defenses of the United States.

The

[blocks in formation]

work has thus been conducted at about one-seventh the rate proposed. Referring to the matter, the Secretary of War in a recent report observes, that "If future appropriations for the manufacture of guns, mortars and carriages be no larger than the average authorized for the purpose since 1888, it will require twentytwo years more to supply the armament of the eighteen important ports for which the projects complete are approved. If the appropriations for the engineer work are to continue at the rate of the annual appropriations since 1890, it will require seventy years to complete the emplacements and platforms for armament for the ports referred to."

The Endicott board reported as needed, in addition to the 2,020 guns then on hand, 1,305 guns of modern construction.

But the last report of the Secretary of War shows that partial provision has been made for forty-two gun-emplacements out of 448 needed, and sixty-four mortar-emplacements out of 952 required. The report expresses the expectation that, by July, 1896, there will be 1,371 eight and twelve-inch guns and fifty-five gun carriages and twenty-four emplacements ready for use, and that twenty-four guns out of 448 required will be in position and available for defense.

Since the organization of the Endicott board, Congress has appropriated over one hundred and ten million dollars for the building of the navy, and a little more than ten million dollars for coast defense. The recent port-defense vessels are: The Amphitrite, 3,990 tons, with four 10inch, two 4-inch and two 6-pounder quick-firing guns; the Miantonomoh, 3,990 tons, and the Terror, 3,900 tons, each with four 10-inch and two 6pounder quick-firing guns; the Puritan, 6,160 tons, with four 12-inch, six 4-inch and two 6-pounder quick-firing guns; the ram Katahdin, 2, 183 tons, with four 6-pounder quick-firing guns. To which may be added the Monadnock, 3,900 tons, with four 10-inch, two 4-inch and two 6-pounder quick-firing guns; and the Monterey, 4,048 tons, with two 12-inch, two 10-inch and six 6-pounder quickfiring guns. In 1896, there was a total of nineteen ships for coast defense.

The settled policy of the United States is evidently to make its ports and harbors impregnable and its naval power effective. The boundless capital in property that would be destroyed by bombardment, with its attendant loss of life, the material interests of the whole nation, and the patriotism of its people, urge the completion of the work as early as practicable.

NELSON A. MILES.

COAST SURVEY OF THE UNITED STATES.

In 1807, upon the recommendation of President Jefferson, Congress passed an act authorizing the President to cause a survey of the coast of the United States to be made, and accurate charts to be constructed of the entire coast-line; but it was not till 1817 that the work was actually begun. In that year a commencement was made near the harbor of New York, under the direction of Prof. F. R. Hassler, a native of Switzerland,

who had gained experience in similar works abroad. Owing to the failure of Congress to make suitable appropriations, the work was prosecuted only at intervals between 1817 and 1832, no general survey being attempted, while the detached surveys were limited to the most elementary information.

In 1832 Congress empowered Professor Hassler to employ such astronomers as he thought advisable to assist the military and naval officers in the prosecution of the work, and provided an appropriation adequate to the requirements of the service. From that date to the present time the survey of the coast has been in steady and active progress. Professor Hassler continued in charge of the work until 1843. His successor was Prof. A. D. Bache, great-grandson of Franklin. The latter was succeeded by Professor Benjamin Peirce, the eminent astronomer. Since Peirce's day there have been five holders of the office, the present incumbent being William W. Duffield, of Michigan.

Some estimate of the magnitude of the work of the coast survey may be formed from the fact that the American coastline, exclusive of Alaska, reaches a total of 7,060 miles, while the shore-line, following the indentations of the numerous bays, etc., reaches a total of 29,375 miles. The work combines three important operations: 1. The geodetic survey, which accurately determines the geographical position of various points along the coast by astronomical and trigonometrical methods; 2. A topographical survey, which delineates the coast-line and the characteristic features of the land; and 3. A hydrographic or nautical survey of the channels, shoals and approaches to the shore, including observations of currents and tides.

As fast as the work is completed, charts are published in sheets for the use of mariners, which can be obtained at a low price at the principal seaports. The list of publications embraces a main series of charts, giving a continuous representation of the entire coast on a scale of 1:80,000, or about three quarters of an inch to the mile, and exhibiting all the natural and artificial features of the shore, together with the depth of water and configuration of the sea-bottom, channels, shoals, etc. series of charts on a I: 400,000, known as

[ocr errors]

There are also a smaller scale of off-shore charts,"

« PreviousContinue »