The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1877-12-13

to cash transactions In all the financial ope.
rations Of the city.
| g. The reduction and limitation of the rate
OF taxation to III per cent on real and per
sonal property.
To render these obligations more effective
they were embodied in constitutional amend
| ments.
8. The funding Of all bonds Of the city into
| a new form called Premium Bonds, of the
| full character and operations of which. a
satisfactory knowledge can only be obtained.
by reading the ordinances and act Of the
Legislature descriptive thereof. Under the
pre- MUM bond plan the city has been en-
| abled to set aside on account Of It's bonded
Indebtedness, from its reduced revenue not
quite fourth of the amount previously re-
quired to be placed to the interest account.
which had advanced to the very large sum of
81, 100000.
large amount of various classes of
bonds have been funded into these Sect
rites. This amount so funded exceeds
eight millions. But there is one class
of bon dholders who refuse to accept of these
new bonds as a substitute for their old bonds.
which were issued under the act above
quoted. and who demand that their contract
as expressed therein, and so recognized by
the United States Circuit Court, shall be exc
cuted by the city
These are the consolidated bondholders, the
amount Of whose claim, principal and inter
est, Is about four millions, three hundred
thousand dollars. They refuse to fund into
premium bonds and demand the fullfillment
OF the obligation, in the act Of 1852 to set
aside the amount of $G5OO00 of the citys rev.
enue to pay the interest and principal of their
debt. They aver that the subsequent issues
Of bonds eliminating in the premium bonds
are all in violation of their contract. and
therefore, unconstitutional, and that if the
city should discharge the obligations of that
contract, the whole bonded Indebtedness of
the city would be reduced from twenty-four
millions to four millions and a half. If this
proposition be correct the holders of these
bonds may justly claim to be the redeemers
of the city instead of its exacting pursuers.
They charge the city with the injustice of
seeking to coerce them into placing their
bonds on level and in the same form and
character of bonds in violation of the contract
and many OF which are tainted with fraud.
These were the main issues between the
city and the consolidated bondholders, which |
have been in litigation for some time.
At last the city, "stag hunted" to use the |
expression OF the learned City Attorney, is |
driven to new plea or defense, which has |
certainly strong aspect of that vice which |
The Administrators have declared their great |
tesire to avoid, to wit: reputation.
They set up the plea of unconstitutionality |
n the title of the consolidated act, which |
1oes not mention any authority in the con-
'olidated city to issue bonds Of the descrip-
ion Of the consolidated bonds.
1t is admitted that this Is a desperate de-
ense. The whole case is rested upon it, 1t
$ regarded very differently by the attorneys
md the parties Interested; by the city as a
'olid and substantial plea, and by the con-
'olidated bondholders and their attorneys as
IN extremely flimsy and untenable one, and
ritual confession of the defeat of the city on
Ill the other grounds maintained by her
Judge Billings will doubtless give a very
earned decision of this plea, and from that
lecision there will probably be an appeal to
he United States Supreme Court. Should
le decide against the plea, the mandamus
viii be made peremptory and the city will be
rdered to place on it's budget the sum of
100000 Of the city's revenues to meet the
Obligations Of the consolidated bonds.
Whether that would involve an additional
ok or an application of that amount of the
itys revenue, under the present restlic
the rate Of city taxation, we are not in
)rmed.