The New Orleans Democrat. (New Orleans, La.) 1875-1876, 1876-04-20

bers of bonds, have not yet been funded,
and ten, or SIC, 200, numbers two to eleven
inclusive, have been funded In duplicate,
or more than once.
THE prNoKNEY SMITH WARRANTS AND THE
FLOATING DEBT.
The revelations made by the commit
tee concerning the Pinckney Smith war
rants. and much of what was known as
the. floating debt" are enough to stamp
the funding scheme as an unmitigated
fraud and swindle, In execution as we'll
as in inception. 1t is an insult to an in
telligent population to tell them that
they must regard, as valid and binding
on them, obligations issued by the Fund
ing Board in exchange for mere imita
tions and forgeries, and for bonds based
upon the fraudulent representations OF
those who obtained them There are
certain legal principles governing in the
ratification of fraudulent contracts
which ought never to be overlooked.
either by individuals or by governments.
These principles have been declared by
the highest courts in the United States,
and In other countries. Every we'll read
lawyer understands them. Except under
certain circumstances the ratification Of
a fraudulent contract Is worthless
Agents and representatives of the peo-
pie cannot ratify such contract, ex-
cept, perhaps, under certain conditions
and authorizations which do not
probably exist in the case upon
which we are commenting, and
besides the auditing and funding Of IL
legal obligations is prohibited by the
funding act itself under heavy penal
ty, viz. a fine Of not less than $1,000 and
Imprisonment not less than two years.
He who procures the funding OF such
obligations, as well as the members OF
the board, are subject to this penalty.
II the statements Of the committee OF
the House of Representatives are true,
as we cannot doubt they are, why has
not the Attorney General of the State
set the machinery OF the courts in mo-
ton against the parties implicated in
these violations Of the law?
In a recent communication to the
DEMOCRAT. "Justita" undertook to en-.
gage for Mr.. Field that he would, on
proper information, institute legal pro-
ceedings to invalidate and defeat all
these fraudulent schemes.
We recommend. then, the old war
horse to take up and carefully read the
report OF the House committee on the
Funding Board, for we think he will
there find suggestions enough to occupy
him for some time.
The committee go on to say in theiI
report
IT s known that in 1871 an astonishingly Large
number of Legislative vouchers were issued, t.
the extent OF one million OF dollars or more
and that great numbers OF them were sold t
brokers ut worry low rates. and Increased to ALLOW
; for discounts. besides being hawked about tn,
streets as sort OF merchandise g. Numerous
ton during the interim between sessions. be
sides all sorts Of committees of Investigation
and examination, travelling by construction t
all parts of the state. in addition to the regula
committees. were allowed clerks and assistan
clerks. messengers. sergeants- at arms. etc. etc
and most extravagant rates of compensation 10
, per diem and mileage, with allowance for dis
: count often added.were allowed TO members an
employees. in the shape OF orders on the warrar
clerk and approved vouchers issued by him
, Also appropriations for contingent expense
would be made. in some cases s250.ooo ut time
samo by the State Auditor. This wou
be sold for from sixty to seventy cent
on the dollar to a broker. or, who VI b., wou gu
, rant clerks own warrants. ut par, to the warran
/ clerk himself. thus realizing double discount
!. Additional appropriations, ono upon the othe
l followed, and SO. with discount upon discount
aa1 vouchers sweled to allow for discount. tn
so-called floating debt sweed by millions. 1t j
said. too. that the uncanceled orders on the war
rant clerk. for which his warrants were ISSUED
somehow or other got out, upon the, marke
again, and became merchandise among brokers
! thna in ny for no nj n
employees. What are known rs Pinckne
Smith" warrants and vouchers have been sol
on the streets as low from two and n half I
7 five cents on the dollar, and yet the State pal
, them at par. with bonds at discount or in cash
Their price iluctuated, according to the hopes 0
misgiyngs of their holders. in the matter Of get
ting nm appropriation bill passed to pay them
During the well Remembered Carter war pc
rod ms were appointed 9y tn
diem were given to and were disposed of 70
? what they could get by them, to brokers an
Your committee are informed that nearly tn
! whole Of the So 600 900 Of bonds issued for fund
ing the floating .debt"-styled floating del
! bonds were absorbed at seventy cents on tn
dollar for the bonds by the kind of floating Diet
above described: for which the State receive
little or nothing IN n actual hca services
less. and 50 this kind OF floating debt was accu
I mulated from year to year. with q recklessnes
+, ''noatings it became bonded debt" or wa
| paid by direct appropriations in cash. obtaine
at runous rates Of discount.
Several appropriations, from year to yeaI
were made to pay these Pnckney Smith wal
rants and vouchers to the extent of about three
> fourths OF a million of dollars, but after each az
= preparation was exhausted. the stock on han
seemed to be undiminished. 1t was perhap
impossible to distinguish the good from the ba
, among the mass Of that paper and the paymen
thereof seems to have been indiscriminare. bu
it is understood that those entrusted with tn
disbursement of the appropriation managed tn
} payment according to their own views Of VIII
should have the preference.
The funding act NO. of January "a. 1874 on
authorized the exchange OF consolidated bond
for bonds and valid warrants drawn previous Il
the passage of said act No warrants draw
after January "a, 1874 could be funded, therefore
except in violation of the funding act and of tn
contract thereby made with the holders Of tn
consolidated bonds. Nevertheless. S13s, 557 80 o
l Smith warrants or vouchers, for which tn
Auditor issued six warrants, dated March II
1874 lin disregard Of writ Of injunction re
straining the payment OF claims under the &C
!, Ne.59. of 1874 were funded on the Goth day o
August. 1874. clearly and Enthusiastically in vic
lation OF the provisions OF the funding act
1t is plain that the Funding Boart
} have transcribed the law in funding warrants
, drawn since the passage of the act Your com
mttee call particular attention to the fact which
after eliminating all errors is positive and un
mistakable, that $40 400 Of bonds and SIG AIS 16
warrants and other obligations which wer
: funded, have not been destroyed. according t.
tho process verbal Of the Funding Board. at tn
different times when the work of destruction
was done.
IL ~