Wlliam Gilmore Simms
Selections from the Letters and Speeches of the Hon. James H. Hammond, of South Carolina >> Message to the Senate and House of Representatives of the State of South Carolina, Nov. 28, 1843 >> Page 65

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Page 65

Documents | The Reprint Company; John F. Trow & Co. | 1866, 1978
Transcription 65
and it would not be unfair for her to pay a similar one
to redeem them.
Should the attempt to purchase all the debt, how-
ever, fail, the next best that could be done, short of
actual payment, would be to shift the balance of it on
the other States of the Union, by purchasing the stocks
of such as are undoubtedly sound and faithful to their
engagements. It is probable that an abundance of
such stocks may be obtained at any time, within
the next seven years, below or at par. And provision
might be made for procuring them instead of our own
stock, if ,it rises much above par.
If the scheme I have recommended for paying the
debt of the State should not meet your approbation, it
seems to me important that you should at least make
arrangements for a Sinking Fund, in fact, as well as in
name. The fund now distinguished by that name
does not differ practically, in the slightest respect,
from any portion of the bank capital. It is kept as a
separate item in the books of the bank ; the surplus
profits are nominally turned over to it, and the interest
of the State debt subtracted from it. But to keep up
this distinction is all unnecessary labor, since the whole
fund is loaned out precisely on the same terms as the
other bank funds. The fundamental principle of a
real Sinking Fund is compounding interest for a special
purpose. It should be set apart, its dividends re-
invested as they are declared, and the whole of it
sacredly pledged for the redemption of the principal
of the debt ; the interest being paid in the mean time
from other resources. It is manifest that a Sinking
Fund, which is expected to pay both the principal and
interest of the debt, must be as large as the debt itself,