FINANCES. The history of the public debt con stitutes the most important and interesting part of the financial history of the State. The first debt was created in 1832 and 1838 for the purpose of establishing State banks. Between 1840 and 1850 the State inaugun•atec1 the system of public improvements. Bonds were issued to turnpike and railroad companies for construction, and first mortgages were the usual guarantees. In 1861 the total amount of bonds outstanding was over $18,000,000, and a war loan of $3,000,000 was added. The four years of the Civil War destroyed the sources of State income, made payment of interest impossible, and swelled the total indebt edness considerably. In 1865 it rose to $25.277, 406. out of which 85.169,740 was interest over due. The current interest charges alone amounted to $1,185,048, while the revenue was far below it. taxation inadequate. and the amount actually collected considerably less than the sum assessed. Most of the companies to which the bonds were issued failed to pay the interest. The carpet-bag rC•gime that followed the Civil War did not improve matters. New bonds to the amount of $3,408,000 were issued to 14 rail road companies in 186S, interest remained un paid. and in 1869 the total debt reached $39, 896,504. Measures of relief were then passed by the Legislature; sale of the delinquent roads was authorized, and the solvent railroads were permitted to pay their debts in Stale bonds which were below par. By these means the debt was
rapidly reduced to $27,920,386 in 1874. Yet even then the State was unable to meet its obli gations. Repudiating began to be talked of toward 1880• and, frightened by this agitation the bond holders began to offer various plans of settle ment. A plan of refunding at 50 per cent. was agreed to by the bondholders and the Legislature in 1S79, but was rejected by popular vote.
In that year the debt question was the main campaign issue, and the repudiation party lost. A final settlement was reached in 1883, when the State debt proper was sealed down 20-24 per cent. and the railroad guarantee bonds 50 per cent. The total debt was reduced by this operation from $28,000,000 to about $15.000,000. The con version was completed in 1890. In 1900 the public debt was $17,023,600. The general tax is at present the main source of income (about 50 per cent.). Licenses give 25 per cent. and a tax on railroad and other corporations about 15 per cent. The net receipts in 1900 (omitting the operations of the loan accounts) were $2, 069,624, the net disbursements $1,801,911.