The New Orleans crescent. [volume] (New Orleans, La.) 1866-1869, 1868-05-10
MR.. AvEGNo's PLAN.

1t is to be hoped that, at the next meeting
OF the council, some definite and favorable
action will be taken with reference to Mr..
Bernard Avegno's financial plan. 1t is per-
fectly plain that something must be done to
redeem the credit of the city, and it is equally
plain that the scheme of sacrificing the city
property will not produce the desired effect.
1t is well enough to say that the city money
Is now held, almost entirely, by capitalists
who can afford to wait for return on their
investments but, in the meantime, whilst the
currency obligations of the city are selling at
nearly forty per cent. discount, the treasury
is practically bankrupt and bankruptcy is
condition which, in various ways, tells fear
fully against the prosperity of community.
1t means more debt, higher taxes, and final
sacrifice of all of the great interests on which
the city depends for an annual revenue.
If we would avert these calamities we must
act promptly. Financial embarrassment if
not promptly remedied, is sure to eliminate
in financial ruin. Hence the council should
take speedy measures to overcome the diff
culties with which the question is beset: and
should try to find solution for the problem
by which we have so long been vexed. We
have already, more than once, directed atten-
ton to the financial plan proposed by Mr..
Avegno; and on further examination of that
plan, we are thoroughly convinced of its
practicability, and its efficacy. As we have
stated, although new here, it is not mere
vague experiment. 1t has been tried with so
much success in Europe that almost all of the
large cities, and some of the national govern
ments, have adopted it in the management
and redemption of their debts. Its great
merit is, that whilst it requires no
anticipation of prospective revenues; no
sacrifice of the interests or franchises be-
longing to the city, no system of extraordin-
airy taxation, it provides a sure resource for
the payment of our currency Indebtedness
Let us briefly restate the general theory of
this plan. In the first place the whole of the
outstanding debt is to be funded in obliea-
tons of $50, each bearing 7-SO per cent. in
terest per annum. This, of itself, would con-
shtute an inducement for the conversion of
the notes into bonds. But, in addition, there
is another inducement which has never been
known to fail, and that is the chance which
each bondholder has of winning a prize in
the monthly drawings by which the redemp-
ton of the bonds is determined. That is to
say, every month a certain number of bonds
are extinguished by the payment of principal
and accrued interest; and the particular bonds |
thus redeemed are ascertained by drawing
a given number from a wheel. A certain |
number of those thus drawn are entitled |
to prizes, and this process is repeated |
every month until the whole num- |
Der of obligations-say 100000 is exhausted. |
But in addition to the numbers representing
The obligations, or bonds, 10000 other num-
Oers are placed in the wheel, and participate
n the chances of the prizes. These $4,000
numbers belong to the city, and the proiec-
ors of the plan, and are to be represented by
tickets, which are put on the market for sale.
t is obvious that the inducements to pur-
'hase these tickets may be made such as to as
ure their sale, and thus sufficient revenue
an be obtained to pay the debt, interest and
u. and to leave handsome margin of profit.
This will be plain when it is considered that
he number of Obligations is constantly I'M
ergoing reduction. by extinguishment, whilst
be reserved numbers are constant quantity.
nd consequently bear every month larger
roportion to the total number placed
the wheel. Thus, at first, these supple
lentary numbers represent one-ffth of the
'tal ; when 100, 900 bonds are redeemed thew