The New Orleans bulletin. [volume] (New Orleans [La.]) 1874-1876, 1875-06-23
CITIZENS BANK AND THE FUNDING
BOARD.

New ORLEANS, June %, 1875.
To the Editor of the Bulletin
am well aware that you need no apologist
and are perfectly able to respond to any
filings at your policy or sentiments from your
contemporaries, but as my attention has been
called to an article in the last issue of the
Sunday Delta, concerning the claim of the
Citizens Bank, now before the Funding
Board, which you are apparently censured
for supporting, and the facts concerning
which are so entirely perverted, beg little
room in your columns for a truthful state
ment Of facts, as derived from authentic
sources.
In the latter part of February, 1872, the
Citizens Bank of Louisiana. then the Fiscal
Agent and Depository of the State, was called
upon by Gov. Warmoth for loan of $780,
900, with which to pay the per diem, etc., Of
the members of both Houses of the Legisla-
ture, their session then being near its close.
The president of the bank declined to make
the loan. Subsequently, when called upon
by the Governor and other officials, with the
assurance that bill was already prepared
authorizing the issue Of $500, 900 in warrants,
with which, at discount to the State of sixty
per cent, the $500, 900 was to be realized, and
which would surely be passed by a two
third vote, MIR. Gaines, authorized by the
unanimous approval of the board of direc-
tors, composed Of A, Carriere, Placide For
stall, R. Brugier, A. Chiapslla, Thos. D. Mil
Ter and D. A. Chaffraix, made the loan at
thirty days. on the condition that the Legis-
lature Of the State should enact bill author
izing the Governor to borrow the amount and
to pledge with the bank as collateral security
for the loan, $500, 900 Of Auditors warrants on
the State Treasurer, the bank thus assent
ing to the loan, with the hope Of benettting
the tax paying community and the laudable
desire to prevent the issue of the extra $780,
900 warrants
The act as agreed upon was passed on the
26th February, 1872, known as act No. ~ of
that session, and OF which the editor Of the
Sunday Delta and his correspondent, Member
of the Legislature, appear to be strangely OBJ
livious. The terms of the act were rigidly
conformed to by the bank, which. on the 28.h
February, 1872, began to pay at its counter
the checks of the Warrant Clerk of the Legis-
lature to the order of the members thereof,
continuing until the entire amount was con-
sumed, and the bank now holds these checks
as vouchers and evidence Of the fact here
stated.
Now, as to the averment that this money
was loaned to 81. G. Wsrmoth, it is entirely
untrue. Not dollar was drawn by him. The
only part he took in the transaction was as
Governor of the State in giving note to the
bank on the 9th February, 1872, in accord
with the authority coded to him by
the act, for the $4,000 loaned
and passed to the credit of both branches Of
the Legislature by the bank, and every dol
lar was paid out on the checks of the War
rant Clerk, counterGgned by the chairmen of
this took place h the last week of the ses-
sion, many members of the so-called Carter
faction being benefciaries of the act, as
attested by their Endorsements on the checks
with which they were paid, their feud with
Warmoth having been ended about a month
previous. And yet the bank is charged with
loaning the money to II. G. Warmoth, to
carry on his contest with Carter and his ad
herents. With how much justice, let the
public judge
Now, as to the claim before the Funding
Board After three years of unavailing efforts
to collect its just due; after bearing the
intolerable hardship which caused much of
its embarrassment, notorious during the past
year, the bank memorialized the Legislature
at Its late ten days session for relief, but
the short time given them, rendered their ef-
fort in that direction fruitless, and the man
ayers then sought to realize on the debt
through the only method provided for in the
statutes, that of the Funding Board. In obe-
dience to their legal notice for holders Of
warrants to come forward and exchange them
for bonds under the Funding Bill, they Of
fered their 100000 warrants held as collat-
erals, which, on the Goth of May last, were
accepted by the Board and funded into $780,
600 of the new consols, which the bank still
holds as collateral security for their loan, the
form only of the collaterals being changed.
These bonds, with the July coupons on. are
worth in the market about So cents, and yet
the bank has proposed to accept thera In part
payment at 60 cents, or about 10 per cent
more than market value, and after applying
them at that price as q credit on the note,
asks to fund the balance Of the debt.
Now, this is denounced as helm
GUS offense on the part of the bank.
Why? Shall the bank, holding collaserals
surrender its privilege and become common
creditor with those who have no pledge. Ii
so, why the solemn farce Of authorizing by
legislative act the oollaterals to be given
Even if the State were bankrupt, has not the
holder Of collateral security the undoubted
right to realize the proceeds thereof, and
then become q common creditor with others
for the balance due? Or has the State be-
cause it is the State, the right to be relieved
Of the operation OF its own law Of pledge
which is binding on an individual, when II
80, =. hofora q oapitalist and borroWs as ar
individual? By no means, and there is NJ
good lawyer or fair minded business man ai in
This community but will acknowledge tina
the bank is justly entitled to all Its claim
under the pledge.
Now, again, let the community iudg
whether the Board Of directors Of the bank
most of them personally unknown to War
moth. men whose antecedents are we'll known
and Known too to have no political utilization
party could BE- charged 10 with nth
Government almost unanimously condemne
in this community. Parties who contribut
to newspapers articles SO full of misrepresen
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