The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-06-08
STATE BONDS AND PRIVATE CREDIT.

| The Importance Of firmly established
public credit to the commercial inter.
ests OF q community and to the prose.
cution OF great enterprises requiring
large expenditures. is not generally
enough understood. In another column
we reproduce. from the New York COM
nterciol Chronicle, an article headed
debt Of South Carolina and other
Southern States" which very conolsely
discusses this question and will repay
perusal.
The article Is significant. too. show
ing that the sluggish but in the end
generally sagacious instincts Of the
commercial and moneyed world have
discovered the fact that trade cannot
flourish, capital find safe Investment,
or railroad and manufacturing stocks
pay while number OF the States Of the
Union are In ruined, disorganlzed and
depressed condition. "It Is now in or
der, says the Chronicle, 'to push on the
process of reconstruction, not by alien
interferences, but by emigration
of labor and capital, which shall
give new life to these States"
SO far as the people OF Louisiana are
concerned, we do not hesitate to affirm
without qualification that they are do
ing ell In their power to carry out the
new and wiser policy Of reconstruction
here referred to. One of the chief OBJ
iects OF the present State government Is
to place the bonded debt of the State
upon 80 firm q foundation that 1t will
command public confidence everywhere.
That Louisiana consols are not now at
par. or even at premium, is solely due
TO the fact that the long era OF misgov-
eminent, in which corruption and dis
honesty of every description Hourished,
and industry was almost totally de-
stroyed. broke down the faith Of the
business world In the ability of this
as we'll as the other misgoverned
States to pay, and the new order
Of things has not yet been in exis-
tence long enough to re-establish that
faith. To do this as Speedily as posi-
BILE is the wise policy OF the govern
ment, and in this policy it should have
the support and cooperation Of all who
are interested in the advancement of
the State. The Chronicles article shows
very clearly that the State credit neces-
sarily affects the private credit Of its
citizens. When the bonds of State
are quoted in the money markets be-
low par, especially the bonds Of
State which contains within its limits
great commercial city like New
Orleans, suspicion is inevitably cast
upon the credit Of its individual citi-
zens; there is, in short, an apprehen-
sion OF general financial rottenness and
o dstrust Of its public and private en-
terprises. And this apprehension and
distrust do not seem entirely lilo
gical. Dishonesty and misgovernment,
or a disorganization Of Industries, are
the natural causes of governmental
bankruptcy and feeble public credit,
tent pervade the whole body Of society.
Should Louisiana eonsols advance to
par, or command premium, as
they ought to do, there Is no doubt
that the commercial credit of our
people would be strengthened and
advanced. Nor is this the most
important effect the establishment
of our State credit upon an unques-
toned basis would have. We have
several great enterprises to carry out,
which require the aid of foreign
capital; but that capital cannot be had
IL the credit of Louisiana Is at a dis
count and her bonds 60 begging on
the market, or may be manipulated
and put up one day and down the next
In the contests Of the bulls and bears.
Three times during the eight years of
Radical rule in this State railroad
from New Orleans to Shreveport would
have been built by outside capital, had
there been a real substantial govern
ment in the State, honestly using
Its credit and capable Of pre-
serving its credit unimpaired. Twice
the money to build such a
road could have been borrowed in the
East and once in Europe. The only
reason why money either in the East
or in Europe cannot be had for that
purpose now liz, that faith In the credit
Of Louisiana and confidence in Its en-
terprises have not yet been restored.
As soon as our consols are quoted at
par or at premium, there will be no
difficulty in obtaining the required
money to build the New Orleans Pacific
Railway, or to carry out any other solid,
wisely and sagaciously planned public
work.
Our Government and people cannot,
therefore, pursue a wiser policy for the
Of our trade and the gen.
eral development of the State than one
designed and calculated to firmly es-
tablish the public credit. There will be,
we think, little difficulty or delay in
n, rrvipu ont c,Ynh a policy Touiciopn