The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-05-30
THE FUNDING BOARD.

Editor Democrat me to explain,
through your journal, the precise nature Of
the controversy which has recently arisen
between the Funding Board and my firm
with respect to the cOnvertibility Of certain
State bonds
Some time In 1875 the Governor, hearing
that large amounts Of old securities were in
the city ready for conversion, and knowing
that there was no money in the treasury to
meet the interest on the same, made up his
mind to suspend the funding of all that was
possible. Already the Attorney General had
eniOined the conversion Of the 81 ,000, 900 loan,
levee per cents, act 35 of 1865, Chattanooga
Railroad issues, Mexican Canal Company
cluded In act II Of 1875. But with the excep-
tion of a few bonds, the mass awaiting conver-
sion peTtained to the issues levee per cents,
under act 115 Of 1867, and levee 8 per cents,
under act 80 Of 1870. The Attorney General
was asked to enioin these two issues also, but
positively refused, because, as he said, the
State had no case, having received 80 cents
on the dollar for these bonds as issued.
linen 1t was that act IL OF 1875 was rushed
through the Legislature signed, promul-
gated, etc.
Act lis of 1867, Levee Six Per Cents
Act 80 of 1870. Levee Eight Per Cents.
Holders Of bonds under these two issues
Were in consequence Of act IL Of 1875, forced
to prove the validity of the issues in court
brought suit at once before Judge Haw-
received substantial money consideration
for the bonds issued under the above two acts
The pleadings We're to test the issues--only
one bond of each issue being examined by the
court, and submitted to witnesses
though the list Of the amount of said issues
In the hands OF relator was also produced to
show the extent of the interest he then repre-
sented The decision of the lower court
covered both of theseissues- the Supreme
Court sustained this decision, issuing man
YN111G FL hfao tar ~
like character as the relator held, though they
were never in the hands Of the court for
special examination, bond by bond.
me present Funding Board has recently
rejected my application for the funding OF
some similar bonds. When the same ques-
ton which Is now raised was considered by
the previous board, the Attorney General
gave his decided opinion that the Supreme
Court did decree that the entire issues under
acts 1l5 and 80 We're valid obligations of the
State, etc.
How could the Supreme Court mandamus
the board to convert o. J. ForstalFs bonds
unless they had arrived at the conclusion that
the Issues under which these bonds fell were
valid issues
The court could decide only upon what WIS
before them, but could not decide upon one
bond without at the same time determining
the validity of the entire issue to which sale
bond belonged.
So I contend that my case to all intents anf
pun pOStS NdS utfECb dGt1Ol. l. proved II
court that the issues of the bonds I repre-
sented We're valid State obligations for which
| the State had received a consideration ir
money. My case was test case-so under
stood to be, and so proclaimed to the worlt
| by official documents signed by the Governor
| OF the State and President of the Board O
Liquidation, countersigned by the Secretary
of State and of the Board of Liquidation, ane
sanctioned by the said board, of which tht
President Of the Cotton Exchange was mem
Der, and by the broad seal of the State
Hence, Isay, the State ought not to have
questioned these two issues any further thar
to be satisfied that the bonds presented
| were genuine, original bonds, pertaining te
such issues-a fact to be ascertained by ex
perts, and not by the courts
Upon this statement of facts, which Is liter
ally correct, ask your candid opinion as t
whether my principals, through me, shoulc
be subjected to the expense of instituting sep
arate legal proceedings to compel the funding
of every separate batch OF bonds sent to me
when the validity OF the issues to which the,
belong has already been passed upon by tht
court of last resort Does the language ol
the spirit of the law applicable to the case re
quire such a sacrifice on the part OF bona fidt
creditors of the State ? Respectfully,
OSCAR j. FoEsTALL,.
NEW ORLEANS, May 30, 1877.