The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-12-30
IMPORTANT CORRESPONDENCE.
THE TAXPAYERS AND THE CONSOLE
DATED BONDHOLDERs.
The Consolidated BOndhOIders Propose
only To Establish Their Legal Rights.

The Consolidated BondhoIders Propose
only to Establish Their Legal Rights.
New ORLEANS, December %, 1877
To Messrs. Campbell. Bermudez. Hornor ~
Benedict
Genflemen-As the President Of the "Cen-
TAXPAYERS Union" of this city. beg to adj
dress you upon the points following:
l. Is 1t the intention or purpose OF the
holders of the consolidated bonds of 1862
should favorable decisions be rendered In
their behalf In the suits now pending, to add
IN the shape Of further taxation to the al
ready crushing burdens OF to-day
Q. That is to say, do you propose to Insist
on the levy of city tax next year sufficient
In amount to cover back claims or taxes due
this said interest in the sum Of 80, 100000, as
Is charged against your
The Union of citizens over which have the
honor to preside are In no particulars repudia-
tors. We wish and hope to meet every honest
debt, but to do SO we cannot afford to pay lie
gal and unconstitutional debts also.
In the attempt to retire Unfortunately
our legal and illegal debts we would fail COM
pletely
We have always regarded, and still regard
The consolidated bond debt OF 1862 as valid
believe also, that the thirty-seventh section
of this said act protects equally the bonds
issued under the same and the property
holder and taxpayer, against all other city
debts contracted In VIOLATION Oh us lffeVOca-
bic requirements and obligations.
The foregoing, then, is our position in the
premises. Now, from special Inquiries made
by me touching our honest city Indebtedness
and low rate Of city taxation, | have stated
in just issued public document upon the
assurance Of the information thus derived,
that "a very excellent arrangement can be
made with The holders Of this consolidated
bonds Of 1852 Indebtedness, whereby, for the
coming fifteen years. the total required an
nual tax for this interest shall not during the
said fifteen years exceed the sum OF $500, 900,
aad that "under such nm arrangement there
would be no annual increase as i'm the pre-
MUM bond plan which, fol example, de-
mands o tax for 1878 amounting to S519, 800.
Requesting an early reply. have the honor
to be, very respectfully,
O. IL. TEBAUbT, M. D.,
President Real Estate and Taxpayers Union.
New ORLEANS, December 20, 1877
DR.. G. II. Tebaut. NJ D.. President Real Estate
and Taxpayers Union;
Sir-The only answer which | can assume
TO make to your communication of this date
is that the holders of the bonds issued by the
city of New Orleans, under section 81 of the
consolidation act of 1862 i-redted ~ then
hare been by the il-willed officers represent
ing the city are determined to have oil their
legal rights fully recognized by the courts of
the country. In order that their bonds be no
more reflected upon by city officials as Of
"mOrf than doubtful uatiljfU."
In u proceeding brought before the United
States Circuit Court in this city, by foreign
bondholders against the city, Judge Woods
has decided that the section aforesaid eonsti-
tutes n contract binding on the State and tho
city, the obligations OF which could not be
impaired, and that, upon proper showing at
law, he would issue manoaHts to the city
authorities TO compel the annual levy OF the
tax required by that law.
No tax for sinking fund purposes has been
assessed since 1874. and the coupons over due
remain unpaid for 1876 and 1877.
The Council was put in default in December,
1876, and again In December, 1877, to comply
with the law. and the substance of the decision
of the case OF Van Hoffman VS.. the City of
Quincy by the Supreme Court of the United
States-4 Wall, .. 535-was submitted to their
consideration to establish cOncltsiuelv their
obligation to levy the tax, regardless Of the
prohibitions In the Premium Bond law. They
were even reminded that eventually they
and their official sureties would be held to
respond In damages. They have ignored
the claims Of the bondholders, have adopted
O budget from which they have Intention
ally omitted them, and are determined not to
levy in January the tax required by law to
meet the consolidated debt.
Under these circumstances, unwilling as
they are to submit to the unconstitutional
and aleatory Premium Bond scheme, pro-
ceedings have just been instituted before the
Third District Court for 1nnndnm1ls To com
pei bne Guy HUbDGTlIleS 10 IGVY u LAX SnI1l-
cient to pay all coupons over due and those
maturing In 1875 and to redeem the bonds as
contemplated by the law. The case will come
up on Saturday, January 5, 1878, before Judge
Monroe.
This prefdced 1t can be assured on behalf
OF bondholders represented by the under
signed, that after obtaining judicial receg-
milton Of their rights, they will cheerfully en-
terrain any fair proposal, in the shape of q
Legislative enactment by which, upon proper
securities for the punctual and faithful OBJ
servance Of the terms Of compromise The
taxpayers Of the city will be relieved from
the onerous, though just and legal tax de-
manded, for q reasonable period on the mere
payment Of coupons maturing each year.
The bondholders have no desire to crush
real estate but are, on the contrary, anxious
to relieve the same for the greater good Of
both taxpayers and themselves.
The terms of the compromise would be
mere matters OF detail, touching which great
liberality should be evinced and no appre-
hension need be entertained
The sum total OF this answer is honestly
and frankly: Rights first, concessions next.
Such compromises once effected, no three mil
lions and half will be thought Of and the
bondhofders will be satisfied with the pay
ment of their interest coupons, not to exceed,
in any case, annually THREE HUNDRED
THOUSAND DOLLARS, which Is @ quite differ
ent figure from THREE MILLION FIVE HUN
DRIED THOUSAND DOLLARS mmedintely,
Very respectfully, etc.,
RIFp.f