CHAP. 24.—An ACT to provide a plan of settlement of the public
debt.

Approved March 28, 1879.

Whereas it is believed by the general assembly that the rate
of interest heretofore agreed to be paid by the state on the
public debt is greater than can be borne without destroying
the industrial interests of the state; and whereas the council
of foreign bondholders of London, England, and the funding
association of the United States of America, limited, have, in
view of this belief, expressed their willingness to jointly en-
deavor to obtain the consent of the creditors to an abatement.
in the rate of interest; and whereas it is highly expedient, in
the best interest of the state, to secure an amicable settlement
with the creditors by which the credit of the state may be
restored and enhanced, and the aggregate amount of interest.
payable by the state reduced within limits which will not be
too onerous to the population; therefore,

1. Be it enacted by the general assembly of Virginia, ‘That.
to provide for funding the debt of the state, the governor is
hereby authorized to create bonds of the state, registered and
coupon, dated the first day of January, eighteen hundred and
seventy-nine, the principal payable forty years thereafter, bear-
ing interest at the rate of three per centum per annum for
ten years, and at the rate of four per centum per annum for
twenty years, and at the rate of five per centum per annum
for ten years, payable in the cities of Richmond, New York or
London, as hereinafter provided, on the first days of July and
January of each year, until the principal is redeemed. The
state shall have the option of redeeming any or all of said
bonds by the payment of principal and accrued interest at any
time after the expiration of ten years from the first day of Jan-
uary, eighteen hundred and seventy-nine, on public notice to
the holders of its purpose to make such redemption. The
coupons on said bonds shall be receivable at and after matu-
rity for all taxes, debts, dues and demands due the state, and
this shall be expressed on their face. The holder of any regis-
tered bond shall be entitled to receive from the treasurer of
the state a certificate for any interest thereon, due and unpaid,
and such certificate shall be receivable for all taxes, dues and
demands due the state, and this shall be expressed on the face
of the registered bonds and on the face of such certificate.
All obligations created under this act shall be forever exempt
from all taxation, direct or indirect, by the state, or by any
county or corporation therein, and this shall be expressed on
the face of the bonds. The said bonds shall be of the denomi-
nations of one hundred dollars, five hundred dollars, and one
thousand dolars, at the option of the creditors respectively,
and the bonds as well as their coupons shall be payable at
Richmond and New York, or if desired, may be made payable
in sterling at London, at the fixed rate of exchange of one:
pound sterling for five dollars. The bonds hereby authorized
shall be issued only in exchange for the outstanding debt of
the state, as hereinafter provided.

2. For purposes of designation, the outstanding indebted-
ness of the state is divided into two classes, as follows, to-wit :

Class I, which shall be taken to include all tax-receivable.
coupon bonds, and all registered bonds and fractional certifi-
eates which are convertible under the act approved March
thirtieth, eighteen hundred and seventy-one, into such tax-
receivable coupon bonds.

Class II, which shall be taken to include all bonds funded
under the act approved March thirtieth, eighteen hundred and
seventy-one, as amended by the act approved March seventh,
eighteen hundred and seventy-two; and also two-thirds of the
face vaiue, with two-thirds of the unpaid accrued interest up
to the frst of July, eighteen hundred and seventy-one, on all
unfunde® tr nds, including sterling bonds.

3. ‘The outstanding indebtedness of the state shall be funded
in the new bonds, to be issued under this act, as follows:
Bonds shall be presented for exchange with all coupons at-:
tached maturing after the date of presentation, and shall be
exchanged at the face value of said bonds, dollar for dollar,
for the new bonds, with all coupons attached maturing after
the date of such presentation: provided that the proportion of
Class II, refunded, shall never exceed in amount one-third (4)
of the total amount refunded, until eighteen million dollars of
Class I have been retired. The new bonds to be issued may
be coupon or registered, at the option of the holders, and at
the like option coupon bonds may at any time be conyerted
into registered bonds.

4. All due and unpaid interest may be funded under the pro-
visions of this act at the rate of fifty cents on the dollar, and
shall be fundable at that rate under the third section of this
act, and talen, under the provisions of said section, in lieu
of bonds of Class II.

5. If on or before the first day of May, eighteen hundred
and seventy-nine, the council of foreign bondholders and the
funding association of the United States of America aforesaid,
shall file with the governor their assent to and acceptance of
the terms of this act, the same shall be taken to be a contract
between the state and the said corporations, and the governor
shall forthwith provide for the preparation of the bonds pro-
vided for by this act. The said corporations may present for
funding, and in the proportions hereinbefore provided, at least
eight million of dollars of the outstanding obligations of the
state prior to the first day of January, eighteen hundred and
eighty; and during each period of six months, from and
after the thirty-first December, eighteen hundred and sev-
enty-nine, they may present an additional amount of at least
five millions of dollars, until the whole debt is funded; but
any excess over said amounts, which may be presented during
any of said periods may be estimated in requirement for
the succeeding six months. So long as the said corporations
shall present for funding the obligations aforesaid, in the
amounts and in the periods aforesaid, they shall have the ex-
clusive privilege of funding the outstanding debt under the
provisions of this act: provided that the said corporations
shall arrange to receive the outstanding bonds at the city of
Richmond, when the holders thereof shall so desire. But if
the said corporations shall fail to file with-the governor their
assent and agreement as aforesaid by the first day of May,
eighteen bundred and seventy-nine, or shall fail to present for
funding the outstanding bonds in the proportions and amounts
and during the periods hereinbefore specified, then the gov-
ernor may, in his discretion, make a like contract with respon-
sible parties for the funding of the debt of the state under this
act.

6. The rules prescribed under the act approved March thir-
tieth, eighteen hundred and seventy-one, in respect to prepar-
ing, Signing and issuing the new bonds and coupons, regulating
the same, and in taking in, cancelling and registering the old
bonds, shall be observed by the officers of the treasury in the
execution of this act, except so far as the same be modified by
the provisions of this act: provided that all bonds and certifi-
cates which may be necessary to be printed, shall be printed
from a plate which shall be the property of the commonwealth,
and shall remain in the keeping or under the control of the
second auditor. Whenever an obligation of the state shall be
presented to the sceond auditor to be funded under this act, he
shall note the fact and date on the proper register in his office,
shall punch a hole through the name of the second auditor,
signed or countersigned thereto, and shall issue his warrant
upon the treasurer for the new obligations required. There
shall be endorsed upon the said warrant a description of the
old obligations, and the calculation of principal and interest
for which the new obligations are to be issued. The said old
obligations and warrant shall be carried by the second auditor
to the treasurer, who shall note the fact and date of funding
on the proper register in his office, and if he shall find the war-
rant correctly drawn, shall sign the proper obligations to be
issued, register the same in his office, clip therefrom the past-
due coupons and punch the same, and deliver the said obliga-
tions to the second auditor, taking his receipt therefor upon his
warrant. The second auditor shall countersign the obligations
so delivered to him, register the same in his office, and deliver
the same to the proper person, taking his receipt therefor. ‘The
treasurer shail jacket and file in his office the warrant upon
which the new obligations were issued, with the surrendered
obligations aftached to said warrant, and shall number and
date the jacket so as to make it easy for reference. But in
cancelling and registering the bonds as above directed, in every
bond and coupon surrendered under this act holes shall be
punched in one or more places, and in such a manner as to
render a new funding of the same impossible, and every bond
and coupon so cancelled shall be filed for reference.
7. The owners of all classes of bonds mentioned in this act,
who shall exchange their securities for the bonds created under
this act, and who shall not have yet received certificates repre-
senting the remaining one-third of their principal and interest,
due and payable by the state of West Virginia, shall receive
certificates of a like character to those issued under the act of
March thirtieth, eightecn hundred and seventy-one, when they
make such exchange; and the state of Virginia will negotiate
or aid the creditors holding all of such certificates issued under
this act, or previous acts, in negotiating with the state of West
Virginia for an amicable settlement of the claims of such credi-
tors against the state of West Virginia. The acceptance of the
said certificates for West Virginia’s one-third, issued under this
act, shall be taken and held as a full and absolute release of
the state of Virginia from all liabiliy on account of the said
certificates.

8. The general assembly will. by necessary and appropriate
legislation, provide for the prompt payment of the interest on
the bonds issued under this act.

9. In the year eighteen hundred and eighty-five, and annually
thereafter until all the bonds issued under and by authority of
this act are paid, there shall he levied and collected, the same
as, and together with 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 shali be paid into
the treasury of the stafe to the credit of the sinking fund. The
treasurer, the auditor of public accounts, and second auditor
are hereby appointed commissioners of the sinking fund, and
shall have (a majority acting) the control and management
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 under this act. Atl the cer-
tificates of debt which shall he funded, redeemed or purchased
under this act shall be cancelled by the second auditor, and de-
livered by him to the treasurer of the commonwealth at the
time of payment therefor, who shall carefully preserve the same
in his office. All certificates of debt acquired under the opera-
tion of the sinking fund, created by the act of March thirty,
eighteen hundred and seventy-one, shall also be cancelled and
delivered.

10. Executors, administrators, and others acting as fiducia-
ries, may invest in the bonds issued under this act, and the
same shall be considered a jawful investment.

11. The treasurer shall, upon the first days of July, eighteen
hundred and seventy-nine, and January, eighteen hundred and
eighty, and upon the same days in each year, pay or cause to
be paid to the holders thereof the half-yearly interest then due
upon each of the bonds of the commonwealth issued under
this act.

12, Whenever there shall not be a sufficient amount of money
in the treasury of the state to meet the accruing interest on
the said bonds promptly, the auditor is hereby authorized and
directed, by and with the advice of the goyernor of Virginia, to
raise by temporary loan, to be returned out of the accruing
revenues of the state, 2 sum sufficient to enable him to meet
promptly the said interest as it accrues. And in case the audi-
> tor shall not be able to raise a sufficient sum for the said pur-
pose by loans, he is is hereby authorized and directed to issue
non-interest-bearing certificates of indebtedness of this state,
ito be signed by himself and countersigned by the treasurer,
and properly registered in the offices of the auditor and trea-
surer, for the sum of one dollar and multiples thereof, the same
to be printed from plates, which shall be the property of the
state, and to sell the same at not less than a minimum price to
be fixed by the commissioners of the sinking fund, which shall
- not be less than seventy-five cents upon the dollar. The said cer-
tificates shall be receivable for all taxes, debts, dues and demands
due the state, and this shall be expressed on their face. The
amount of such certificates which may be issued at any one
time shall be fixed by the commissioners of the s.s' i+g fund,
sand the proceeds of the sale thereof shall be devoted exclu-
sively to the payment of interest as aforesaid. The auditor
- shall report regularly to the general assembly the amount and
character of certificates issued under this act, and the net pro-
ceeds thereof. In case the auditor shall not be able to borrow
r the sums needed as aforesaid without security, he shall be and
* is hereby authorized to hypothecate such amounts of the said
certificates as may be fixed on by the commissioners of the sink-
ing fund, at a value to be fixed as aforesaid, but in no case to
be at a less value than seventy-five cents upon the dollar; and
in case of a sale of said certificates, whether they may have
been so hypothecated or not, they shall be offered for sale in
suitable and proportionate amounts in the different counties,
towns and cities of this state, so far as practicable, under regu-
lations to be fixed by the commissioners of the sinking fund.
The said certificates shall be received by the treasurer of the
state, and be cancelled on receipt thereof, under the same regu-
lations and prohibitions now existing in relation to coupons for
interest on the public debt, except that no tax shall be deducted
therefrom, and the fact of their cancellation shall be noted on
the said registers.

13. The act approved March fourteenth, eighteen hundred
and seventy-eight, and all acts inconsistent with the provisions
of this act, are hereby repealed.

> 14, This act shall be in force from its passage.