New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1874-01-06


New general fund tax.
New levee construction and repair tai (recom-
mended to be reduced one milll a.s.'s..
Total tax for all purposes tneW). .At
The law, as it now stands, allow
the various parishes to assess a tai
for parish purposes equal to 100 PEI
cent of State tax, and no more. Mos
of the parishes assess mp to the limi
of the State tax; hence a reduction OF sever
mills State tax will be equal to total re-
duction of fourtseD mills esXations parish
and State.
Recommendations Of sHE NEW DEBT.
The new debt thus proposed, to be sre
sted will be certain in amount, of un
doubted legality, and within the will anG
ability of the people to pay. whereas
much of che old debt is believed 60 DO O
uncertain legality and more uncertair
equitys entailing a Fate Of taxation which
is ruinous to our prospects of prosperity
The new consolidated bonds, being guar
aneeed in the constitution, and held against
people able and willing to pay interest
ana principal. will be worth much more
intrinsicaliy than the old indebtedness tOl
which they will be exchanged.
Our bonds do not now average mora than
fifty cents On the dollar. The purchaser OF
our Sax per cent bonds at this time really re-
ceives twelve per cent on his Investment
OF this twelve per cent. six per cent repre-
SCENTS his actual outlay, and six per cent is
the insurance he receives on his Investment
or the premium We pay on our discredit
10 relieve the State and to cause our
creditors as little loss as possible, is the
problem tefore US. If it be said, ''This ia
repudiation, We reply, that however mach
we may desire to continue to pay the inter
est on our present bonded debt, we can not
do so. We propose to do all in our power.
We have Che inclination to pay in full, but
we lack the ability. Our creditors can hold
their bonds if they choose, but we believe
We are Offering them a far better security.
We have debt Of twenty-fOur mil
lions, worth say twelve millions. Ii this
debt be appreciated to par, the holder re-
alizess an advance of fifty per cent. Under
this scheme our new consols should GO
to par or nearly so. If we continue our
efforts eo pay the whole interest We shall
tail. and our bonds will 90 even lower in
value, but il we can bring our debt within
our ability topay We can greatly appreciate
10, and thus not only benefit ourselves, but
our creditors by preventing the latter from
continuing to lose until we are ultimately
forced into virtual reputation.
RATE AND METHOD OF FUNDING.
Y Is suggested by the New Orleans
Chamber Of Commerce and BY many
private individuals that the debt might
and should be funded at lower
rats Than sixty cents on tho dollar
say at tlfty cents. Of even forty. But the
Justice as well a. the strength of our ease
lies in the fact that We propose to paw our
credi sOrs all We can, and ask OF them q
full and final settlement on that basis. can
see no d Ference between forcing them to
take less than we can pay and absolute Pc.
pudiatiOuh Is the only cOnsidera ton is
what We may force them to take, we could
as Justly propose to them to fund at
twenty tixe or ten cents on the dollar. A
careful calculation, which Is as accurate as
a mere estimate can be, shows that We can
pay interest and principal at the rate Of
sixty cents on the dollar. and live and pros
per under the rate of taxation necessary to
pay that amount and since we can do it, I
think the se il no question that We should
do ID.
,s-a convinced from, consultation with all
classes 81 creditors, that perfect uniformity
in the new consolidated bonds is matter
of great importance The unfunded debt
bears no interest at all, the funded debt
bears interest at various rates. In a scheme
which proposes to Obliterate the whole
mass of debt and substitute new one, 1t
will be utterly impossible to discriminate in
either exist or are alleged to- exist IN favor
Of one class of claims over another. Natur.
ally the holders Of each class think tho par.
ticular indebtedness they hold is e4uitably
entitled to some sort of priority. and these
considerations have been strongly urged
upon me by each interest with view 20
Obtan a preference sor their claims. But it
seems clear to me that we shall como
nearer exact justice to all parties by max.
ing the consolidated bonds uniform in the
rate of interest as well as in all other
respects, that is, making them all bear in
terest at seven per cent per annum.
So far as have been able to ascer.
tain no one considerable bondholder
has refused, after due consideration. to
regard this proposition in friendly
spirit. ]. seems to be the opinion Of all
business men that such a settlement would
involve no dishonoE to the State and would
be a positive advantage to the bond.
holder in this. that one bond worth par and
that can be readily hypothetical is better
for "a capitalist to hold than two bonds
worth fifty cents on the dollar, which can
not be readily cold or used.
DOUBTFUL BONDS.
Assuming that our whole debt is valid,
on the dollar. the nev deot will
be less than $l5.OOe,00o. The ie-
gality Of considerable portion of
our bonded debt is now being tested in the
COURTS /. has been my desire to have the
question thoroughly examined, and if any
part of the debt il Illegal, 20 have its
fraudulent character established in the Su-
preme Court. Our efforts in this behalf
will be continued, notwithstanding I'M.
founded assertions that this il repudi
alton. II illegality is established, the
Stnta S,n
of portion of its heavy burden. II. on
the other hand. the bonds in question are
shown to be valid. there will. be no further
doubt in regard to them, and they
may he funded with the others. Of
the $1,000. 900 issued TO the Chattanooga
Railroad Company. now in litigation,
the State government feels justified in OK
hausting every legitimate means to defeat
the payment Of either principal OF interest
unless the consideration on which they were
issued. that is the completion of the road TO
Texas, is realized to the State. IT that is
secured it is conceded that the expenditure
will prove d wise one. But until the
road is completed, those bonds should not,
and / think ] am justified in saying, will
not be paid at all. ii such payment can be
avoided.
NECESSITY OF ACTION.
am not careful as TO what name
may De given to this proposed funding
scheme. To my mind it is only question
of settlement in full now on these, the
best terms we can Offer or continued intol
cradle distress and perhaps ultimate en-
forced reputation. There should be
equity and just:cs for the debtor as we'll
as the creditor. / am not willing to
advise the continuance Of a rate of tax,
alton which is hot far removed from oon-
fiscation; especially in view of the fact. that
for large proportion of our Indebtedness
the people of the State have received no
adequate consideration, and for some por.
ton 40 consideration at all.
Upon your judicious action in this matter
Of the State. With the debt and taxation
reduced within manageable limits, and with
the other reforms indicated realized by ap-
,ararr;ata le.1;s, atiap: With Gareful hui.