New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1876-02-19

i
The floating debt your committee have
failed to ascertain. The bill under con
sideration proposes to vest the city authori
ties with power to convert said debt into q
| new series of bonds, the payment of the IN
terest and redemption of which is provided
| for under certain conditions contained in
| said bill. Your committee deem it unnec
esary to enter into any statement az to the
| details of the BILL and confine themselves
| Gated. Your committee submit the follow.
| ing facts in relation to the bill. That az to
all of said bonds, except the consolidated
bonds, there is grave and serious question
| Of legality, because
l. They we're issued in contravention of
the contract made by the city with the
holders of the consolidated bonds.
2. As to some of them, they are tainted
with fraud, because the city received an
inadequate compensation, and in some in
stances no cOnsiderat on therefor.
3. As to some of them, they now represent
a portion of debt created in aid of the
"Confederacy," 'rhich debt, by the consti-
tuition of the aited States and Of this
State, is declared null aud void.
In this connec ion. your committee call
especial attention to the provision of act
No. II of 1852. We quote:
"The Common Council shall annually. in
the month OF January, pass an ordinance
to raise the sum of 100000 by a special
tax. All Ordinar ces, resolutions or other
acts passed by id Council after the first
day of January ia each year shall be nall
and void unless the ordinance imposing the
consolidation loan tax shall have been pre-
viously passed. At the end of each and
every year any surplus of the consolidated
loan tax remaining in the treasury after the
payment of all the interest shall be ap-
piled TO the purchase from the lowest bid
ders OF such bonds issued under this act as
have the shortest period to run"
And section four of the same act pro-
vides:
''Nor shall any loan be contracted unless
the same be auti"rized by vote of ma
jority of the qualified voters of said city,
and no ordinance creating debt or loan
shall be valid unless for some single ob-
ject or work distinctly specified therein,
and unless such ordinance shall pro-
vide ways and means for the punctual
payment of running interest during the
whole time for which said debt or loan
shall be contracted"
In suit by the holders of consolidated
bonds recently brought before the United
States Circuit Court in this city. the Judge
Hon. w. B. Woods) held:
"There can be no serious question that so
much of section twenty nine of the act of
1852 as provides for the manner in which
the tax to pay the consolidated bonds is to
be levied, and the safeguards for the levy
and collection of the tax constituted a con.
tract with the bondholder, the substantial
performance of which he is entitled to re-
ceive."
''The only question which the court is
now called to decide is this: The CITY of
New Orleans having collected and set
apart as required by the act of 1852 fund
to pay interest on the consolidated bonds,
can the city be enjoined from appropri-
ating said fund to any other purpose! In
my Judgment there is no doubt that this
can bs DONE" 81 feel justi-
fed in holding that the tax collected and
deposited under the act of 1852 to pay the
interest on the consolidated bonds is
trust fund in the hands of the city author
ties to be applied to that purpose, and no
other"
Your committee therefore concludes,
so far as the consolidated bonds
are concerned, that the holders can
not be forced by the city or State
to accept the terms of this bill, and
that the city will be compelled to levy and
collect an annual tax to pay the interest
anal pro rata of principal Of the 81 ,444,OOO
of,consolidated bonds in full.
In regard to all other bonds included I'M
der the provisions Of the act, the said bonds |
being beyond question in dispute and their
legality and validity doubtful, your COM