The New Orleans Democrat. (New Orleans, La.) 1875-1876, 1876-04-06
THE "TRUE INWARDNEsS or THE
FUNDING BOARD.

At Inst we are getting at the true In
wardness'' of the Funding Board busi-
ness. and the decisions of that righteous
tribunal. the Supreme Court OF Louisi-
ana. in cases against that board involv-
ing the question of the validity or inva-
lidity Of certain issues Of State bonds.
The voluminous, exhaustive and accu-
rate report Of the special committee OF
the House Of Representatives appointed
ut the extra session Of April 1875, to
examine into and report upon the pro-
ceedipgs Of the Board of Liquidation
of the State Debt" created by act No. 3
Of 1874. or the Funding Board
and of the Board of Audit created
by act No II of the regular session OF
1875. contains much suggestive matter
in connection with this subject, and to
IL we acknowledge our indebtedness for
many of the facts which we intend to
expose in these articles facts concern
ing which we had only n general and
vague knowledge until we had examined
this report. Representative Bayley and
his colleagues of the committees. to-
gether with Mr.. j. M. Weymouth, their
experienced and competent clerk, de-
serve the thanks of tho people of Louis
lana for the fidelity and skill displayed
in the Investigation. and the thorough
ness with which they have done the
| work. IT ia evident they Must have ex-
pended much time and labor upon the
investigation but the subject justified
and required it.
The conclusion to which we have
come from the statements of this report
and the testimony Of the Witnesses sum
moned before the committee, is that the
! funding act of 1874 No. - was and is u
swindle upon the people of Louisiana,
devised in the interest and for the bene-
| fit mainly Of certain holders Of State
bonds. obtained upon misrepresenta-
ton and by fraudulent and corrupt
means from the peoples representa-
tives in the Legislature. These bonds
had been "blown upon and were
tainted, .ut tho Supreme Court of the
State could be relied upon to give them
validity by their decisions, the presid
ing Judge Gudeling) being himself n
large holder Of the same class Of State
obligations. The Governor Of the State,
we know. was also interested i'm this
matter. although he has covered his
tracks with more than ordinary care.
These two men-the one the head Of the
Judiciary, the other tho head Of the
Executive Department. in secret con
clave with a lot of bankers. brokers.
railroad men. spectators in State secu-
rites and lawyers. engineered the fund
ing net Of 1874. Who was the origina-
tor and author Of it. is not positivel :
known to us. but il is an unavoidable
inference, from the facts. that some in
diyidual largely interested In convert
ing fraudulent bonds into new obliga-
tons. to be issued under authority OF % So
fcdled constitutional amendment; some
scheming legal mind, who had also the
legal power and authority to enforce
its execution. conceived the plan
and produced the work. Our opinion
is that either John IT, Ludelng or VIM
Pitt Kellogg Is entitled to whatever
credit there may be due for the produc-
ton. And we must here give expression
to our regret that gentlemen standing
high in the esteem of the mercantile
community should have lent their
names and their personal influence to
these designing men in the execution
Of this overreaching scheme. We may
believe they did not do it for the sake
Of Kellogg, or for the sake OF Ludeling
and other holders Of fraudulent bonds.
and we concede that they may have in
perfect good faith. nay, unwillingly, con-
sented to the funding act, hut the con-
| sequences to the people are the same
whether this faith was good or bad.
whether the consent was willing or I'M
willing, whether they were interested
or disinterested in this matter. 1t is
quito undeniable that the gentlemen
alluded to have sanctioned by their
votes as members Of the Funding Board
the funding of bonds positively fraud
ulent. justifying their action by a
decision or decisions prepared and rem
dered purposely by Chief Justice
Ludeling and his colleagues on the
bench.
We think it can be shown that the Fund
ing Board was not bound to take the de-
cisions Of the Supreme Court as binding
on them, unless they believe in the doc
trine that a band of conspirators against
the people, simply by obtaining pos
session Of high Offices of trust, can give
validity to their own unlawful acts. If
the members Of the Board now acting.
or those who have been members.
believe That, it would be useless to rea-
son with them, but we are sure that the
people generally will recognize the
soundness of the proposition we here
lay down. We assert the broad doc
trine that fraud vitiates every trans
action. That is an elementary principle
of law. 1t is sound morals and it is
sound law. You cannot build upon q
fraud, for you are without foundation
to start from. No court can legally
give validity to a fraudulent contract.
No legislature can do it. The people
themselves cannot do it by voting upon
constitutional amendment. The Par
lament Of Great Britain, with all its
power, believed by some to be I'M
limited, cannot cure q fraud by statute