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

I AoS3 Am
Act 20, Ig5I granting aid to the south.
I eastern Railroad Company. 80. ~, zoo
4 Set 90, 1871, creating the Mississippi River
Navigation Company. and granting
che aid Of the State thereto ......... $4,000
I lcs IL. 1871. to bnild = state house, and
providing for the issue Of bonds
ac, ao 1871 to incorporate to the Xiesan.
and to 's grant State aid thereto is,s. 900
! Acs A. 1871, to promote the interest OF
/ commerce by establishing the LOUSY
\ ana Warehouse Company, and guar.
4 anteeng the bonds thereof. ........ 10000
| Act l06. approved october rs, 1871, IRela
tive to the New Orleans and NOrths
eastern Railroad Company, and to-
I facilitate and aid Che construction %
said railroad. etc........s...e....... I.sfs.S0o
! Act g. 1877, provides in section nine of the
| act for the issue of bonds TO The LeveS
ODmpan/ .ee...o.esee.ee.esooo sos.s..s iVU,OO0
S.ts: .....,.................w ss,os7 500
Hotas con. in gent liabilities ~...s. S3l $50 800
! Ia some cases these laws are vOiGA but their
1 existence upon the statute book is calcu
I lated O. select 1iscredit upon the StateA l.
Nherefore. earnestly recommend that all
laws 6r parts OF laws extending the credit
| of the State to any of these corporations or
involving any contingent liability, on tho
part Of the State, be Immediately repealed.
| This can be done by one sweeping act
| which trust you viii! Immediately pass.
| An act vas passed in 1886 TO loan the
bonds St the State to the Citizens Bank to
1 the amount of Sl2,00O,C00. The third
section of the act provided: That for
| the guarantee Of the bOndS 90 be emit
| ted by the State ip favor o. tbs. Citi
zens' Bank, and of the interest Thereof. aad
| for which theState pledges ,ts f. ith, all the
| securities granted by the act OF incorpors-
! ton OF said bank, and especially BY the
| third and fourth sectionsSf said act, to the
holders of its bonds are hereby transferred
| to the State, and the holders dS the bonds
/ which may be issued in virtue of this act,
I etcs The bank has paid the interest on the
| bonds, and has redeemed tho greater part
of them, leaving $4,297 1888 80 still outstand-
! ing. 1t is believed that the principal and in
| terest of these bonds are fully secured, and
that the State wiz not be called ApoU to
| pay either.
| The bonds ioauef the Consolidated a.ss.
+ citation by the State many years since have
been cancelled except S53l, 4H. which may
be ReckOned in the same category as those
!! loaned tho Citizens Bank. and ior which
the State can in Ne probable contingency
| be liable.
/ Thus the debt Of the State FOR which the
State can, In any probable contingency, be
liable. is asfollowS
| interest bearing oblisaNons Of Ele
State outstaI ding January J. 1874. 422 % %
Outstanding general fund warrants
told :......A..@.. ........'...... s.3JI.l9s 10
Outstanding general fund wArranta
new. January l. la74............. 36i5 u
Certificates OF indebtedness todi.... lSi.G85 "A
Tota' funded and uufunded debt
OF the State...... ........ 6d6 %
Il IL this debt with which We have to
| deal.
/ Tho subject Is ons which will require
n your deliberations the highest exer.
else OF sagacity and frmness, in order
that justice may be done as far c, pos
sible TO both debtor and creditor. and at
the same time the State be relieved ~ far
az practicable Of an incubus which threat
| ems to destroy the prosperity OF the coz.
monwealths ft is the weight of a heavy
deb: and consequent heavy taxation, to.
gether with the exhaustive expenditures of
the State government that have done so
much to Impair our credit, to yetara the de.
velOpment Of our commerce and to deter
capital and labor from seeking in the mex.
haustible soil. the benefc-nt climate and
the abundant natural advantages of our
State. most profitable field OF employment.
PROPOSED FUNDING.
II Is idle now to dwell upon the origin of
this debt, or to review the misfortunes or
prOfiigacy of expenditure by which it was
incurred. The problem is before us for
solution, and it must be dealt with. In
my Judgment, 10 can be best solved by
the passage of well digested funding
Duls accompanied
tional amendments. The main features of
the bill should be the conversion of the
whole bonded and floating debt of the State
into consolidated bonds, having forty years
to run, and bearing a uniform rate of inter.
est. The exchange to be made at the
rate of sixty cents in consolidated bonds
for each dollar of bonds. warrants and ceR
titicates of Indebtedness now outstanding.
The constitutional amendment should
nrovIda that a q a fha 1pht ia ra1nnad
below $25 000, 900 it shall remain limited at
the lowest point attained until reduced TO
$l5,0OO,000 beyond which point it shall
never be increased-the consolidated bonds
to be recognized in the constitution and the
rate of taxation for all purposes limited to
fourteen anc half mills-and a provision
also by constitutional amendment for the
payment of the interest on the consolidated
bonds as it accrues without further appro.
priation fran the Legislature. Consultation
with many large holders OF our bonds and
with experienced financiers has confirmed
me in the opinion that with such funding
bill and with a constitutional amendment
of the character indicated our whole debt
can be readily funded at the rate mentioned
WHAT WOULD BE GAINED.
The substantial results of successful
execution of this policy will be best illus
trated by q reference to official figures.
The total debt of the State, funded and
unfunded, as appears by the official records
in the Auditors Office, is as follows:
Bonds outstanding January 1874. ..s22 $3.50 %
Auditors warrants ioldl.. !93l lbs l6
usry ], 1874, about ;.....;.;;.,;.... !S6ls ~
Certificates Of indebtedness told,.... 1875 A
total. 49,, 1886 90
The present rate OF taxation for all
purposes is twenty-one and half mills.
The existing debt of $24,2S3, 1856, funded
at sixty cents on the dollar. would leave
us with . new debt of STA, 57O.33I 60.
If any portion of the bonds now be-
ing tested in the courts are declared
illegal. the new debt will be con-
sideraby less than this latter sum. The
interest tax at present is eleven and half
mills; the rate necessary to pay all the in
terest on the new debt represented by con-
solidated bonds is five and half mills. 1t
should be remembered, also, that this est
mate is based upon our present greatly re-
duced assessment. If five and half mills
on our present low assessment will pay
the interest on the consolidated debt,
it is apparent that as soon as the relief
brought by the reduction of our burdens
begins to be felt and property appreciates,
as it necessarily must, less rate than five
and q half mills will pay the interest on
the consolidated bonds The interest tax
may then be still further reduced, or, remain
ing at five and half mills, the surplus may
be applied TO the redemption of consols
until the whole debt is extinguisbed.
A statement of our condition now ana
after funding the debt and incorporating in
the constitution the provision herein recon-
mended would show the following compar
alive results:
Old debt. u 283 1916
Mills.
Old interest Observation-Disclosures.
OIo SCHOOL TAX
Via general IUnU
Old levee construction and repair tax........