New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1870-04-22
THE MUNICIPAL FLOATING DEBT.

l 40h xhUA44N0 OAAA'
Under the new city charter, provision Is
made for raising and controlling three
separate funds to remain distinct, and be
applied solely and exclusively to the
objects for which they are created, viz:
The bonded or consolidated debt fund, the
floating debt fund, and the current expense
fund. The first and third of the special
| funds thus. created are to be raised by tax
alton according to law, and from the cur
rent revenues derived from the wharves,
markets, etc But the second is intended
to make provision for the deficit in
receipts, as against expenditures of the
| preceding administration. 4 debt esti-
| mated at three millions, more or less, has
| been handed down from former budgets to
| be provided for at once. AS the current
receipts from taxes and the ordinary rev.
enues can not be depended upon to exceed
the current expenses and meet the interest
on bonds already issued, the Legislature
| authorized the new Council to resort to a
| loan as the most speedy mode OF raising
money to pay the city's creditors. The
manner of this payment is very clearly set
forth in section forty. The Administrator
| of the Floating Debt is to be furnished
with full and correct statement OF all the
matured obligations of the city, at the
date of the passage of the act March lG,
1870, such as final judgmen is, warrants,
| registered certificates, and unredeemed
city notes. This statement is to be pre-
pared by the Administrator of Accounts,
and approved by the Mayor and Admins
traitor Of Finance. AZ soon as such state
ment is received by the Administrator of
the Floating Debt, he is impera-
lively required to issue certificates
of Indebtedness, obligating the said
Administrator to pay to the holder
or his order, on. of the bonds which
are provided for in section forty-one, to be
placed with the Administrator for that
purpose, or the proceeds thereof, the full
amount expires sed in the certificate, with
seven per cent interest from the date of
issue. The bonds to be issued also will
bear seven per cent interest, but as they
are not payable until the lapse OF twenty
FIVE years, and as the certificates are con-
vertable into cash as soon as the bonds
can be sold which may be done on the
best obtainable terms, not to exceed
twenty-five per cent discount, we can not
see the propriety of delaying the liqnida-
ton, by making the experiment of asking
for proposals to exchange at par. The
bonds may be exchanged for certificates at
any price above seventy-fve cents on the
dollar, and are not likely to be taken up
at any higher rate for seven per cent certi-
fca.es than they would command in cash |
in the open market
Two projets for an ordinance have been
submitted to the Council, both Of which /
contain the provision to endsavor to per-
suade creditors of the city to receive
bonds in settlement at pr, when the
law plainly authorizes and requires the
Administrator of the Floating Debt to pay
the full amount of their claims in cash,
with seven per cent interest. The num-
Der of creditors who will be willing 10 ac-
cede to terms SO manifestly adverse to
their interests, viii be too small to make it
worth while to lose the time necessary to
make the experiment. City seven per
cent bonds can be had in very large
amounts at seventy-eight, and some small
lots have been offered at seventy-seven,
1t is doubtful whether there will be much
in the price by the time
they are offered in payment OF certificates of
indebtedness issued by the Administrator
of the Floating Debt, bearing seven per cent
interest, and exigible in cost as soon as
the officers Of the city can comply with
the requirements of the law and raise the
money TO pay them.
There are other features in the proposed
ordinances which should be carefully con-
sidered before they are adopted. Also
two or three important omissions which
will doubtless be supplied in due time.