The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-04-10


any kind for consolidated bonds, nor is there
any averment in the bill that they purpose or
| threaten to do SO.
| We may then confne our inquiry to the
question, whether the Board Of Audit ought
to be restrained from auditing, registering and
issuing warrants for the ''hoahng debts or
obligations" of the State not warranted
for or funded which have accrued
or become due prior to the LIST day of Janua-
ry, 1874" for this is what the Board is au-
thorized to do. and i. is authorized to do
nothing else.
The plaintiff imagines that, as holder of
certain of the consolidated bonds of the State
OF Louisiana, the State has contracted with
him not to issue warrants for any of the float
ing debt of the State which accrued or be-
came due prior to the LIST day of January,
1874; that the act Of the Legislature authoriz-
| ing the Board OF Audit to issue such war
| rants is violation of the contract, and, there
fore, unconstitutional and void and no pro-
lection to the officers who propose to act
under it, and that they ought to be re-
strained
This claim of the plaintiff makes it neces-
sary to examine the .'Act to provide for fund
ing the obligations Of this State by exchange
for bonds, ETC., approved Jan. "a, 1874, pop
ularly known as the g Funding Act, and the
constitutional provision adopted at the gen.
eral election in November last, which plaintiff
AYERS constitute the contract between him and
the State of Louisiana.
The act referred to provides that the Gov
ernor and certain other officers therein named
shall constitute board Of liquidation; that
they shall prepare and issue bonds to the
amount of S15, 900, or rs much thereof as
may be necessary, to be known as "the con-
solidated bonds of the State Of Louisiana"
and that the board shall exchange the bonds
for all valid outstanding bonds of the State
and all valid warrants drawn previous to the
passage of the act, to-wit: Jan. "a, 1874, pay
ing sixty cents in consolidated bonds for one
dollar in outstanding bonds and warrants;
that the consolidated bonds shall be used for
the purchase of the exchange Aforesaid, and
no other; that tax of five and one half mills
shall be annually levied on all the real and
personal property Of the State for the purpose
of paying the principal and interest on the
consolidated bonds, and that il, during any
year, there should be surplus arising from
said tax after paying all interest falling due in
that year, such surplus should be used for the
purcnas and retirement of the con ,olidated
beads.
The act further provides that the entire
State debt prior to the year 1914 shall never be
increased, directly or indirectly, beyond the
sum of s15, 100000 ait being the object and
intent of this act to reduce and restrict the
whole Indebtedness of the State to sum not
exceeding $4,000, 600, and to agree with the
holders Of the consolidated bonds should not
be increased beyond said sum during said
period"
The act also provided that, from and after
its passage until the first day Of July, 1874,
all valid Auditors warrants issued for debts
due prior to January l, 1874. should be re-
ceived for all back taxes, licenses and interest
and penalties thereon due prior to said first
of January, 1874.
The constitutional amendment relied on by
complainant declares, that whenever the
debt Of the State shall have been reduced be-
low S25, 900. 900, the constitutional limit shall
remain at the lowest point reached, beyond
which the public debt shall not be thereafter
increased, and this rule shall continue IN
operation until the debt is reduced 10 49,
OOO, coo, beyond which it shall not be IN
creased.
The complainant being holder of three of
the ..consolidated bonds says that the act
and constitutional amendment constitute q
contract between him and the State, and the
act and amendment SO declare in explicit
terms.
Has this contract been violated by the
passage OF the act OF April 3, 1875, which,
among other things, creates a Board OF Audit
and prescriD IS their duties?
This act provides that the Board Of Audit
"shall receive, classify and approve all
the floating debts and obligations" of the
State, not warranted for or funded, which have
accrued or become due prior to the first day
of January, 1874, and that the Auditor Of
Public Accounts shall issue his warrant upon
the Treasurer for q sum equal to the amount
Of such debt or obligation, which warrant
shall be paid out of any funds in the Ire .sury
which shall be collected from delinquent
taxes now due and uncollecsa lie for the year
in which such debt or obligation shall be
classed, and shall be receivable for all taxes
and penalties due for the year in which said
debt or obligation shall be ciassed.
It is plain to be seen how this enactment
impairs the obligation Of the contract be-
tween complainant aud the State.
What are the rights of the complainant
under his statutory and constitutional con-
tract. They are that the consolidated bonds
should not be issued in excess of 5000. 900,
or such a sum less than $15,OO0,O0O rs may
be necessary to take up the valid bonds and
warrants of the State outstanding at the date
of the passage of the act OF Jan. a, 1874
that these bonds shall be used f)r the purpose
Of exchange for such outstanding bonds and
warrants. and no other that tax Of five and
a half mills shall be annually levied to pay
the principal and interest on the consolidated
bonds, and the fund acruing therefrom shall
be applied to that purpose and no other, and
that after the debt of the Safe is reduced
to S15OOO,000, it shall never bs increased
beyond that sum prior to the year 1914.
Now, if the Board of Audit and the Auditor
Of Public Accounts perform all that is re-
quired of them by the act of April 3, 1875,
it cannot in the slightest degree interfere with
any of the terms of their contract. The State
has never bargained with the holders of con-
solidated bonds that she would make no
provision for her other creditors. The State
does not purpose to issue consolidated bonds
to the holders Of the floating debt. She does
not propose to pay the floating debt out of