The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-03-27
THE WATER.WORKS QUESTION.

| We publish the following communication
on the subject Of the Water Works. but can
not indorse the proposition of clear sale Of
the property. We think sale for twenty
five or even more years might be an excel
lent thing for the city, but should oppose a
| clear sale:
| Dir. Editor - Public attention has lately
been attracted to articles in the Times and Bull
LETIN concerning the disposal of the Water
Works. Both articles discussed and advised
the lease or sale of the Works, in view of get
ting rid of an undertaking which has been
improbable to the city, and to enable her to
make a reduction OF her debt to the amount
Of said sale.
1t is proper and important, both for the cor
poration and holders of bonds given in pay
ment for purchase of the works by the city in
1869, that the subject should receive careful
attention, and that comprehensive view OF
all its bearings, legal and equitable, as we'll
as its expediency, should be taken.
1t will be generally conceded that, in the
present depressed condition of our city affairs,
1t is the interest of the corporation to get rid
OF an undertaking which has proved unprofit-
able; furthermore, that it is her interest to
reduce the amount of her debts and liabilities
rs much as possible, as this will naturally i'm
prove her credit and facilitate her in the man.
agement of the balance of the debt. There
fore it appears desirable for her to dispose of
her management of the Water Works, which
have been burden. The question now re. \
mains: How can it be done most adyanH
tageously? "
There are but two alternatives either a
lease or a sale of the works
In regard to lease-it is not probables or
possible, owing to the depress ID condition of
affairs, aud no prospect of Improvement, that
any individual or a corporation, furnishing
adequate guarantees, would undertake the
operation of the Works, except at a very
low price for the lease. In stipulating that
price, it would have to keep wide margin to
cover its profits on the contract, al IA to pro-
its obligation. Certainly such leEse would
be of no benefit to the city. Nor could the
case be improved either by short or a long
lease; because If short, the lessee will natural
ly require larger proportionate margin of
profit for the short time of possession. Or if |
a long lease, the lessee is not likely under the
condition of affairs to assume a |
long lease and all the contingencies of the |
future, unless fully protected by wide mar
gin OF profits that will compensate him for |
said contingencies
Then, the only alternative would be sale |
Of the Works to individuals or a corpora
ton who would relieve the city of its unprotit- |
able operation, and cancel the amount of debt |
incurred for the purchase of the Works in
1863. But in considering this last alterna-
i've, 1t is important that the corporation
should we'll consider all its bearings, legal
md equitable, as we'll as its expediency. As
,he case now stands, the city can make no
valid sale of the Works. unless with the con-
sent OF the holders of bonds given in payment
If the Works in 1869 To make this point
clear, let us review the facts in the case:
The Water-Works, as authorized and re-
luired by charter, and by mutual agreement
md arbitration between the Commercial
Sank and the City of New Orleans, were sold
" notarial act to the city in 1863 The act
# sale was duly recorded. The price was
ettled by 81, $685. 400 OF City Bonds bearing
i've per cent interest per annum, and matur-
ng in thirty years.
In 1870 one of our District Courts rendered
decree declaring that the bondholders had
10 mortgage on the Water Works; said de-
rec was, on appeal. confirmed by the Su-
rene Court OF this State, and very properly
7e think. No intelligent bondholder can
yer claim right of mortgage where none
as been stipulated. But these same bond
olders have higher and far more potent {
ight on the property than mere mortgage;
hey hold vendors first privilege and lien on
ne property, until the actual payment in law
Il money, of the price of the thing sold.
his privilege was duly registered;it has never
cen questioned; it is superior and para
lount lien on the property; it ia vested
ght IN the thing sold until final payment of
he .prce. This privilege has never been
5sailed; it cannot be. 1t can only be relin- {
ushed or renowned nv voiunt,rr on1
primal action OF the bondhoders
Therefore, before any sale of the Water
Works can be made those bonds must actin. E
lily be paid, redeemed and retired, unless |.
ae works be retroceded to the bondholders
d payment of their bonds should they assent
} this mode of adjustment rather than en-
'rce their undoubted rights by legal process.
5 well they might. JUSTICE,