The morning star and Catholic messenger. [volume] (New Orleans [La.]) 1868-1881, 1875-11-07
WHATA BOND rs.
IN. o. rImaa of satnrdax.

per, payable in regular succession, each at
it's own distinct, fixed maturity except the
two latest which are generally payable on
the same day. The last note in the series
is commonly called the face of the Bond,
the others the coupons; but it would be
moro accurate to call the parts respective
", face coupon and interest coupons. Or
dinarily, coupons represent half years
interest on an amount equal to the face of
the Bond. A Bond is therefore composed
called it's capital and interest. By nature,
the coupon alone is not the Bond, and
the face alone is not the Bond. In cash
value the coupon is more desirable than
the face, regard being had to their respec-
tive amounts. The cause of the difference
In value is the earlier maturity of the in
terest-coupon. parcel of coupons to the
extent of 81 200 payable 1st January, 1877,
has definite value and can. be sold for q
large sum of money the face of a Bond of
81 600 due 1st January, 1897, has compa-
rative1y little value. Therefore q Bond,
such az States and corporations habitually
issue, is simply a legal obligation payable
in lnstallments to emit purchasers it may
be isaned in divers forms. 1t is custom
to issue bonds whose face coupon is 81 OOO
payable at 25 years from date with so in
teress-coupons $50 calied) of $25 each, (if
the bond be led q 5 per cent. bond)
There is not the slightest legal impeachment,
face coupon shall be 500 payable at 25
years from date with so interest-coupons
leo called) of S43 each. The aggregate
amounts of money to be paid by the deptor
of these two styles of bonds are the same in
both instances, viz: 50 $50 each, and the
periods of time within which the aggregates
of face and coupon are to DO paid are iden-
tical. The first instance exemplihes the
per cent. bond, 80 called the second
instance would be denominated a 43 per
cent. bond.
1t is plain, therefore, that the face coupon
and the interest coupon have nothing to
render them, in nature, dissimilsr they
are integral and supplementary parts of
the same legal enSity-the bond. A bond
might be framed without any face coupon,
as for example, 25 year bond with SO
coupons of S45 each. This would require
the deptor to pay S2,250, as in the former
examples also. Or, bond might be framed
without any interest coupons as a bond
payable 25 years from date for 50 $50.
Administrator Pilsbury is proposing TO
iesue some bonds on this latter model.
Some of his premium bonds are to be is
sued, the capital of which will be paid so
years hence with per cent. per annum in
terest to accrue in the meantime and to be
paid only when the capital is paid in
other words, some of his 5 per cent. pre-
MUM lottery issues arc really 1870 bonds
having so years to run without interest.
Hence bond may range through variety
of forms: lst, it may have large face
coupon and small interest coupons or 2i,
it may have a small face coupon and large
interest coupons or Sd, it may have no
face coupon or Alb, it may have no interest
coupon. In any form, however, it is evil
dent the interest coupon plays as important
q part as the face coupon, and we cannot
discover or distinguish the one from the
other in any legal analysis of the validity
IF no hot 10 -,
part is illegal throughout; the parts can
not be separated in questioning their vail
dity ; il valid as to it's face, it is valid as tc
its coupons aud
Vital in every part
Cannot but by annihtlaton, die"
In the next place, the Funding BOARD
is mere agent, and like all agents, mus
! produce its letters of authority, must poin
| to the law under which it presumes t.
| act. Under what law of the State arr
! interests coupons defined not to be bonds
| or bonds defined to be exclusively com
posed of face -coupons7 If there is M
such law the Funding Board cannot
make the law. 1t is not true that act No
B, of 1874, in words or implication hal
stricken any bonds or coupons wbatso
ever with the fiat of nullty. 1t does no
even forbid the legislature to levy a ta1
! to pay the maturing coupons of vaiC
outstanding old bonds. 1t does not for
bid a tax to pay maturing bonds of tn,
ancient issues. To do either would b,
reputation, whereas the idea of tn,
funding scheme is compromise ss bette
alternative than bankruptcy. Act No ;
has not cancelled any coupon of any ole
bond. All coupons of all valid old bonds
are debt eff the State, recognized az suct
by the funding act, and unless withdraw
anicably by this funding scheme viii
rear their crest to the further detrimenr
and Disgrace of the State, which
does cot repudiate but cannot pay then
in full.
Finally the strongest position any O
the advocates of the stump trun
Gated tail bond theory have as
sumed is to assert that holders of cou
pOns detached from bonds which have beer
funded, are holders with full notice of tn,
equity against them, just as purchasers of
mortgage note after maturity take it q
their own risk. But this is begging the Who'll,
question. Is there any risk Is there am
equity againt them We have proved tina
no law exists annulling the coupons, tina
there is no risk and no equities running
against such coupons, and therefore, i
I Al