The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-05-08
REDUCTION OF THE CITY DEBT.

66UUUI1UN VI LII WILL O1DA l.
The Price Current, of Wednesday, recon
mends among other financial measures tn
sale or long lease of the Water Works. W,
quote its remarks upon the latter measure :
Now that the Legislature has adjourned
without passing the enabling act, necessary t.
the proposed liquidation of the city debt, tn.
Administrators have properly fallen bacl
upon municipal r gifts under their presen
charter, and have invited a renewal of nego
tiations for such settlements This is practi
cal and to the point, and we hope the matter
will be prosecuted with business-llke direct
ness and tact to successful conclusion.
The May interest on the old consolidated
bonds, accruing on the LIST instant. was duly
met, the Treasury having ample funds from
the liberal collections at the close OF April
Having thus partially redeemed the city 3
credit, its policy should be to adopt such
measures as will make its property available
for the diminution of the drain for interest,
by reduction of the debt. There Is no
doubt this can be accomplished by sale, OF
long-lease of the Water Works. Bond-hold-
ers are willing to surrender certain amount
of their claims in payment OF the lease
or for the title The main question is
with regard to the price. For instance,
q citizen could hardly bs found who
would object to the sale, If the price were
ten millions of dollars, payable in the citys
bonds and coupons, nor would any one con-
sent to q sale for one million. The price,
then, should be at fair point between these
extremes If the Water Works are worth two
millions in cash, they should, in accordance
with the market price OF bonds, command
about five and half millions in bonds. Both
parties will sagaciously weigh the advantages
ov,H uh N them
respectively from the contract. IL is natural
that each should endeavor to make the best
bargain possible under the circumstances,
but, Notwithstanding their conflicting inter-
ests, we can hardly doubt that they can agree
upon q sum which will be mutually satisfac-
tory.
This fully accords with the recommends
tions of the BULLETIN. What we urged and
expected the General Assembly to authorize
the Council to do in behalf Of the city's cred.
itors on one side, and her taxpayers on the
other, we hope the Council will now proceed
to do on their own authority, trusting that
such authority may be sufficient.
The Water Works in the hands of the city
are an annual expense or loss to the treasury
of a sum ranging from fifty thousand dollars
upwards. This expense or loss may be
saved to the city without subjecting those |
who use hydrant water to dimes additional |
expense Besides this saving the sale of the |
Water Works for long term of years would
wipe out several millions of the citys debts
and save the payment Of the interest thereon
to the amount of 5000, 900 or more annually.
This reduction of the volume of the debt would
make the remaining holders of city bonds
better satisfied with their securities and
more willing to enter into arrangements and
that may be necessary to bring
the total interest bearing debt of the city
within manageable dimensions. 1t must
surely increase the credit of the city and
strengthen the belief in her solvency when
her agents are found willing to lease her non
productive property in order to reduce her
liabilities
OF course, the lease, when consummated,
,hould be guarded with every precaution that
egal advice can suggest for the protection of
he true interests of the city. Due weight
md consideration must be given to the now
current market value of the city's bonds.
Full and fair competition must be invited,
o that at no time hereafter can reasonable
omplaint be made of the city's Partially
Two leading facts are to be held in view on
ither side. First, that the city cannot get in
ash full and fair price for her real estate;
nd, second, that the holders of the city's
onds cannot now sell them for
that they are worth. By the intended trans
elton the city will be able to get rid for
,ng term of years Of valuable but non-pro-
uctive property, and at the same time get
he full advantage OF the cash valuation of her
onds. She will practically be buying in her
wn paper for forty or forty cents on the
now of no benefit to her. 8