New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1877-05-26

Wssn1ngtOn, Nay II, 1877. )
Governor Kellogg, lIH 90 err
DEAR SE--I would like to learn from
you the true history Of the present funded
debt of the State Of Louisians; the exact
debt of that State; how the State consti-
tuition controls it, and why it is that the
bonds of that State are now in such
healthy condition in the stock market.
In short, sir, would be thankful for any
statement you may have to make on the
subject Very respectfully, your obedient
servant, s.t
... CHARLES L. FLANAGAN,
Washington correspondent Philadelphia
North Anlericdi,.
WAsHBGroN, May IL, 1877.
G. L. FlaaaGAu. .4sq,:
DEAR SIR -Inrreply to your note have
10 state that when took charge OF the
executive department of Louisiana, Janu
Sry II 1873, + found the January interest
on the bonded debt due and unpaid. :
There was no money in the treasury to
the credit Of the interest fund, and the
State was in arrears for over $60, 900 ad-
yanced by the FiscalAgent. In May fol-
lowing appointed committee of seven
prominent citizens, irrespective of party,
to examine and classify the debt of the
State. They reported the contingent debt
to be $21, ,000, 600; the interest bearing
bonded debt to be S22, ,427, 800; the float
ing debt warranty to be 81, S56, 5S6--
making total actual debt S44, ,2s3, 1856.
The following January (1S74) in my an
nual message to the Legislature recon-
mended the repeal of all laws creating
any contingent liabilities. These con-
sisted of laws giving aid to railroads, ar-
thoriking subscriptions toprivste eorpo-
rations, ETC., and that constitutional
amendment be adopted prohibiting the
State from making any grant or gift in
aid Of any private corporation. also
recommended that the bonded and fDat-
ing debt be funded at sixty cents on the
dollar into forty-year bonds, called soon
solidated bonds, bearing seven per cent
interest, payable semi annually, and that
constitutional amendments be submitted
to vote of the people; a.u
First-RecogDizing this proposed issue
Of consolidated bonds and making them
a specific and sacred compact between the
State and each and every holder thereof,
which the State could in nowise impair.
Second Strictly limiting the debt thus
created to $15, 900, 600, and providing
that in no case should the debt of the
state be increased beyond this limit for
forty years, or until the principal and in
terest of the bonds vas paid. .-..,-
Third-Providing tax of Eve and one
half mills on all the taxable property Of
the State for the purpose OF meeting the
interest, and providing that all surplus
shall go to create a sinking fund; making
it the duty of the officers Of the State to
enforce the collection and payment Of
this interest tax each year, and dispeDs.
ing with the necessity Of an appropria-
ton by the Legislature for the payment
Of the interest.
Fourth-providipg that the judicial
power might be invoked to protect the
ha2ahald ldAry yvde6fnf 944U1E 1s6joining the col
lection OF this interest tax.
Eifth-That all appropriations in excess
OF revenue during forty years, or until the
bonds are paid shall be absolutely void.
The Chamber Of Commerce of New Or
leans indorsed and approved this scheme
OF funding.
In conformity with my recommendation
the Legislature passed the bill now known
as the Funding bill" and also adopted
the several constitutional amendments re-
commended, all of which were ratified by
the people at the next election, Novem
Der, 1874, by large majority.
The funding bill provided for testing
the legality of several issues OF bonds
notably those issued by my predecessor
I to the Chattanooga railroad "a road nevel
built, amounting to over three millior
dollars. The Supreme Court of the STATE
in April, 1896 decided these bonds to b,
fraudulent and void. The bill also pro
vided for Funding Board, Of which tht
Governor was to be member. Thi
board, at its first meeting, chose nae presi
dent, and / acted as such during my tern
Of office. At first there was much opposi
ton to funding on the part of the foreigl
bondholdefs, but as the nature Of the nev
bond became known nearly all the olC
bondholders came forward and funded
their bonds. During the years 1875 8 tn,
greater part Of Gll the old outstanding
bonds and warrants were funded WheI
went out OF Office had issued between
nine and ten millions of theseconsolidate,
bonds, upon which the interest wa
promptly paid during my administration
These bonds are the only outstandin;
bonds of the State upon which the inter
est is now paid or at all likely to be paid
1t is pretty certain that when the fundin,
is completed the debt OF the State will no
exceed $4,000, 000. When l beeam
Governor the State bonds we're about q
cents. At one time before / went out 0
office they reached 20 cents. Nothing bu
political complications prevented then
going to par, where they ought now to be
When I became Governor the State Ia,
was 81 mills; during my administration
it was reduced TO 143 mills. / inclose 81
extract from Ely last message, which
shows in condensed from the present con
dition of the finances Of Louisiana:
''rEE STATE FINANCES.
'fThe recorded facts will show that wheI
entered upon my duties January /
1873 the bonded and floating debt of thi
State was $24, ,093, 407, with contingen
liabilities amounting to $2l, ,090, 500
The laws authorizing this contingen
debt have all been repealed, and the deb
Of the State now is:
6sS eenso,s oaS.ts9ding -, 80 ,als "a
Old iuSda6ie waTrasts Sa outstanding, 1850
about Sl7e,oQo. which, funded at stI.
tg cents, viii be s...... .......... l01 90
Tolai cOnsol dated interest bearing debt
when fnnding . completed, exslu-
ave Of interest eoupona due prior TO
Jahuar 1874, ard interest warrants
lssued therefor amounting in all to
apont elSo,O0o ,.t....-4...s...... 81 ,S55. 20
Taxation for Stats purposes, when m,
administration entered into power, wa
q mills on the dollar. Taxation for al
State purposes, including schools, is nos
limited by constitutional amendment I,
las mills, and by Law OF the State the rat
OF parish taxation can in no case excee,
the rate of State taxation. Constitutions