The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1874-06-27
THE FUNDING BILL.
Protest of NEUTRALITY-SUSPICIOUS.
isiana's Securities t. be EX-
cluded from the Market.

We are indebted to the British Consul, Nj.
A. De Fonblanque, for a copy OF the follow
ing letter addressed by Mr. Hyde Clarke, Sec
retary of the Council Of Foreign Bondholders,
to W. p. Kellogg. 1t is a strong protest
against the funding bill, and threatens, if its
provisions are carried ont, to put an immediate
stop to any foreign investment in Louisiana
securities or any measures designed tor the
material or commercial interests of the State.
If the State is to remain under the control
Of the present regime, this step on the part OF
our European creditors would be the best
credit OF the State and thereby prevent the
incurrence Of any farther debt.
When the white, intelligent and honest
people govern Louisiana, the Legitimate bonds
Of the State will be paid in full and the traudu-
lent ones repudiated altogether. But so long
As negroes and carpet-baggers are permitted to
direct the destnies Of this State, let foreign
capitalists beware Of their investments i'll
Louisiana securities.
The following is the letter:
COUNCIL OF FOREIGN BoNDHoLDERs.
10 Moorgate street,
London, June IL, 1874. J
His Exceency William p. Kellogg, Governor Of
the State OF Louisiana New Orleans, Q. S. A.:
S;,'-On the 23d january last the Senate and
the House Of Representatives of the State OF
Louisiana passed. and You as Governor of that
State signed, bill called the Funding bill,
for the purpose of consolidating and reducing
the floating and bonded debt Of the State, by
issuing in lieu thereof new bonds to bearer, to
be called g Consolidated Bonds of the State Of
Louisiana to the extent of not exceeding
fifteen millions of dollars, payable forty years
from LIST January, 1874, and bearing per cent
interest per annum: such exchange to be made
at the rate of sixty cents in new "Consoli-
deted Bonds for every dollar represented by
existing bonds of the State. notwithstanding
that many Of the latter bear higher rate of
interest than per cent. This Funding Bill
in effect seems to compel the holders OF the
existing bonds of the State, issued by virtue
Of previous solemn acts OF its Legislature
and duly signed by the State officials appoint
ed for that purpose, to sell their bonds to the
said State at an arbitrary discount Of forty
per cent and to suffer further loss in the re-
duction Of their annual interest. 1t is not
alleged that the State Of Louisiana is under
any incapacity to fully meet all its engage
ments: on the contrary it would appear that
the State possesses ample resources to meet
in full the current interest on all its indebted
ness.
On learning through the medium of the tel
egraph that the said funding bill had been
passed, we had the honor forthwith to telegraph
to YOU, protesting on behalf Of the European
holders Of Louisiana State Bonds, against an act
which we could only regard as arbitrary and
unjust. We now, on the same behalf, formally
confirm and renew our protest against such
Funding act or bill, passed by the Legislature
OF the State Of Louisiana on the Odd of Janu-
airy last. .......
1. Because the bondholders we represent
are holders for value Of securities to bearer of
the State of Louisiana, issued under acts of its
Legislature on certain specified terms and con-
ditions, thus constituting formal contracts with
all holders Of the same, which contracts the
bondholders have not consented to annnl or
vary.
2. Because no one party to a contract has
the right to annul or vary any OF the terms
and conditions thereof, without the consent Of
the other party.
3. Because such Funding Act, purporting
to vary and reduce, without the consent of the
bondholders, the rights they enjoy by virtue
of the securities they hold, would infict an
immediate and heavy loss on the bOndhOlders.
We feel it, therefore, our duty respectfully
to declare, on behalf of the bondholders
whom We represent, that they formally reserve
all their legal rights under the terms and con-
ditions Of the bonds of the State Of
Louisiana which they hold; and fur
tier to declare that, in the event Of any
coercive meaeures being adopted by the
Government Of Louisiana to force the
holders of it's bonds to render them up for
under the Funding Act, we
shall be compelled to resort to such measures
as we may be advised as best calculated to pre-
serve intact the rightful claims Of the bond
holders whom We represent
And in addition hereto, this Council, acting
on the principle they adopted in similar cases,
will be reluctantly compelled, in concert with
the Exchanges Of Frankfort and Amsterdam,
to take measures effectnally to prevent the
raising of any further funds in Europe, d.
rectly or indirectly, for the benefit of the State
of Louisiana, or any enterprise connected
Herewith.
We trust that the great State Of Louisiana,
which enjoyed for many years high degree
of financial credit, will see the justice and ex-
pediency of responding to this appeal by tax
ing Immediate steps for repeating the Funding
Act measure which wonld If carried out
inhict a serious injustice on the bondholders.
and irretrievably damage the crsdit OF the
State you represent.
l have the honor to be your Excellency's
most obedient, humble servant.
HYDE CLARKE, Secretary.
Have You any freight for Jefferson, Shreveport
Or any landing. on Red River? If You have, give