The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-04-09
THE CITY B0NDHOLDERs' BANKING
COMPANY.

1890
| phlet in which we find the report OF the COM
mittee. and the draft of the bill for carrying
ont their views, seemed to US TO- indicate in
substance the erection by the city Of man.
moth banking company, to act as the col
lector and controller of the rents and reve-
nues of tho city, and as the sgent for the
sale of corporation property-all for the sake
| of effecting settlement with the city's bond
| holding creditors.
| Our citizens, with few exceptions, will OPP
pose this measure. For our part, the more
| we look into it the more cause we find to dis
| like it.
1t is probable that the proposed City Bond
holders Banking Company would be able to
buy the now outstanding bonds Of the city,
amounting to twenty-five and quarter mil
lions, at the rate of forty per cent ready cash,
or less than nine millions, or if after getting
control of one-half of the bonds the compa-
ny's purchases should advance the market
rates Of the remaining half, the company
would get the full benefit Of the advance,
which would affect their own bonds as well
as those owned outside. The holders OF ten
millions in city bonds could easily control the
market by buying or selling, and thus get the
outstanding bonds, through agents or in open
market on their own figures. The amount OF
cash needed to gather in the city bonds would
| be less than fourth of their market value.
What was purchased with the first two mil
| lions cash could be used as collateral for g
loan Of nearly as much more, and the bonds
Of the second purchase could be used for an
other loan, and 80 for another and another,
80 that every million in cash would command
six or seven millions in bonds. AS the COM
pany could always borrow at interest rates not
higher than eight or ten per cent, the interest
on the bonds pledged would always more
than balance interest on money borrowed.
The Bondholders' Banking Company on the
City Hall plan would require less than five
| millions in cash to control the entire bonded
| issue Of the city, and to carry on the whole
business Of their corporation, and for this
sam they would pay not more than eight,
nine or ten per cent.
On a paid-up capital Of FIVE millions, the
company is to have the following income
l. The city water rents, which under
imperfect management now yield about one
hundred and twenty-five thousand dollars a
year, but which under the interested manage
ment OF the company's. agents would yield
more than twice that sum. The company
having the lease and absolute control for a
period not less than forty years, would extend
the works into the upper portion OF the city
and greatly increase receipts. The expenses
of running the works would be reduced by
strict economy and the application Of skill
and science. Water being equivalent to gas
as necessity, there is reason to expect that
it would be similarly profitable to furnish it.
| 2 The public markets and such as come
within the scope of the bill, now yielding to
the city 100000 year, would undoubtedly
at present rates be made by the company to
furnish S35O,0OO clear Of expenses. II pros
perity returns to our city, as we all hope, even
this figure will be much exceeded.
8. The wharves now give dues to the city
to the amount Of s2lO,O0O. Under the all
peryading influence and thorough manage
ment Of the Argus-eyed corporation these
receipts will be nearly doubled, and will GER
tainly net to the company in clear cash fully
100000
4. The Bondholders' Banking Company,
after acquiring the fee simple to the citys
batture property, would be able to sell half
million dollars worth each year for long
series of years, having the full benefit Of the
rapidly forming accretions. It preferred, the
batture property transferred would yield
large sum annually in rents. The other real
estate belonging to the city and not dedi-
Gated to public use, on becoming the prop
erty of the company, would at once be
source Of large revenue. The corporation
would find no difficulty in realizing from
these two sources more than half million
year.
s. By acquiring the city's reversionary
title to the city railroads aud their franchises,
this potent organization Of large capitalists
would have what has cost millions of dollars,
and must always produce q large dividend.
In less than twenty-five years almost all these
railroad lines will revert to the city and would
be worth to the company from one to two
millions year. This right Of reversion is
alone great fortune.
The citys right by reversion to the proper
ty, franchises and works of the New Orleans
Gas Light Company, if realized on the ex
pira.ion OF the old charter, would be worth a
very large amount, but if only realized and
confirmed after the lapse Of the period Of ex
| tension, would still be very valuable. Even
in the latter case this right would have a
present worth to the Blinking Company Of a
million dollars or more, and when enjoyed
would be the source of million year in net
profit.
Thus the Banking Company proposed would
start out with an assured revenue Of about
one million year from Water Works. markets
and wharyes, and this income would increase
at the rate Of twenty per cent year. Mean
+;,,, &Lo oor,,,avv woul1 hav,a the FIR, hane.