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

would give 20 Cnom l0R1elotlv0 luOOE0o
ment, and thus legslize them to some ex
tent, or, ct any rate, give the value and
weight Of legislative recognition to series
of bonds now in dispute. The city, after
accepting the provisions of the act, could
not we'll object to funding these doubtful
bonds. and the result would be that the
taxpayers would be saddled with Q debt
that they may now contest with some
show of success. The bill contains no pro
visions enabling or permitting or directing
any person to contest these various issues. q
provision, in the judgment of your com
mittee. absolutely necessary. In fact, a.
We have shown, the city could not we'll DC
it, and the only parties who could do 90
with advantage, viz: the holders o.
consolidated bonds, would find that
their interest lay in securing q decision
in their favor, and not in contesting the
issue of other bonds, tor the reason that
under the present rulings by the United
States Circuit Court, they are assured OF
their interest in principal; and the passage
of this bill will merely leave ample funds
in the hands of the city to pay them, they
being preference creditors.
For instance, if this bill becomes law,
the consolidated bOndholders relying upon
their contract and the decision of the
United States Circuit Court sustaining it,
will call on the city for almost 81 ,0OO, 0OO
yearly, which must be paid to them; and
after that it ia of course no interest to them
whether the city pays the illegal bonds Or
not.
1t will therefore be at once conceded
that the city not being able to compel tie
consolidated bondholder to participate in
the premium bond scheme, will be COM
PEELED to discriminate between them and
the holders of other bonds, paying them
their full pound of flesh, and giving to the
remainder an ounce of premium bonds.
If, on the ground of poverty, the city
seeks authority to compromise with her
creditors, she should In justice treat all
alike, and place all her just debts on the
same footing.
1t is urged. however, that because of the
doubt as to the legality of certain bonds,
the holders will now compromise on easy
terms. Your committee believe that the
doubt should be definitely settled before
any compromise or payment whatever.
The usual plea of innocent third parties
ought not to be considered, as the Supreme
Court of the United States have decided Us
Wallace, page 566) in q similar case that
the ordinary rule would not apply. 1t is
also urged that the adoption of this scheme
will relieve the city from immediate pree-
sure. If this were true your committee can
not find in it any justification or even ex-
PLANTATION for recommending the passage of
this bill snd the silt noing of legal and &C n
stitutional objections. No plea of necessity
will Justify on sbsn lOnment of equity and
violation Of law. Either q portion of the
debt is illegal or it is not; if it is, let it be
so declared by the courts before it is too
late, and the taxpayers be relieved from
the burden. If not, let it be otherwise de-
and then converted into incon-
Of ,,,Aa tnIv
illegal debt, it should not be paid at all; if
a valid debt flor it is admitted that the city
must compromise even on q valid debit, let
the city and her creditors then come to
terms.
Your committee can n 1t see that bank
rupt by paying sixty cents on the dollar
Oh an alleged debt for which there is no
claim in law or equity, does better
than by refusing to pay at all. If this
bill becomes law, long before the
question of The legality Of these bonds
large sums will have been paid and re-
deemed and interest paid in full, and even
q bonus or prize attached to them. OF what
avail the judicial verdict, then, SO far as the
bonds paid and premiumed are concerned!
Under the premium bond plan it is claimed
that 1907 500 will pay the interest and re.
demption for one year. What about the
yearly payment that must be made of six
per cent on S4.444,0OO of the consolidated
bOnds9
The true saving would be in declining to
pay the illegal debt and compromising on
the admitted legal and just obligation.
The act seeks to impair the obligation of
q contract Ia contract declared by the
United States Circuit Court to exist, and
IS, therefore, open to the charge of unconsri-
tutionality.
Briefly summing up the objections to the
passage of this bill, we remark:
|. The nconstitutionality OF the act it
,elf
?. That all bonds of the city. including
hose whose legality is questioned, are
placed on common footing.
B. That as to certain bonds, viz: consoli-
lated bonds, they are by judicial decree re-
moved beyond the pale OF this law, except
)y consent of the holders.
q. The bill fails to place the questionable
lebt beyond the operation of the scheme
Until the status of said questionable debt is
determined.
5. The bill would tend to secure to one
lass of bonds payment of principal and in
crest in full out of funds specially intended
or other purposes.
6. The bill would give legislative recog-
litiOn to all bonds now questioned as to
uCA 0IIty anu "oOlA cCCulO Vdy ulCut VI
principal, interest and, possibly, premium
o bonds that might afterward be declared
worthless.
I. Would settle on the taxpayers the full
mount of the principal of the present debt.
8. Would still leave bondho!ders (refus-
az to participate in the scheme) with their
sgal recourse against the city to compel
III payn4t.-t 0. .utci est aud principal of
heir bonds.
In conclusion, your committee would re-
lark that they have confined themselves to
be consideration Of objections against the |
ill as a whole. and the legal objections |
hereto; and while thoroughly convinced |
nat legislative enactments to facilitate the |
elief of the city of New Orleans from
nancial embarrassment are an imperative |
ecessity, are of the opinion that the legal |
nd Other objections against the plan pro- |
osed are alike unans werable and insur- |
lountable.
In regard to the details of the bill, your |
do not report, but would add |
lat the principle on which the bill is based |
artakes to such an extent Of the charac |
,ristics of lottery playing Ia vice detri |
ental to pnblic order and morality, and no
1873 to individual welfare) that on that I
pint alone they consider the bill under |
as contrary TO public welfare
nd good morals.
For these reasons and others to be ovally |
ven, we report unfavorably and recon
end that the bill do not pass.
Respectfully submit ted,
A. j. SYPHER, Chairman.
The report lies over.
Senator White gave notice that he would
l tomorrow submit minority report on
ouse bill No. 327.
SPECIAL ORDER OF THE DAY.
House bill No. 38l, entitled an act to con-
m the notarial charter of the New Orleans
acifc Railway Company, with amend
ents thereto; to extend the term of exist
ICE of said company, and to confer thereon
rtain powers and franchises, being the