The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-11-20

| for that purpose, IL the conditions III the one
case were fulfilled in the other;
/ con very readily perceive that the city Of
| New Orleans, for instance, might have offered
| to tioat o. loan on the European system in
ortl3r TO raise the amount Of money neces-
sary to eztingush it's debt already contract
ed The only difficulty which would have
been encountered would have been in all
probability that no one would have volun-
tariIy subscribed one hundred cents on the
dollar to the loan, when the security offered
was not absolute or tangible buS was depend
ent upon taxation subject to Legislative
caprice.
In order to discuss this plan we must put
ourselves in the place Of tho Board Of Ad
ministraton which adopted it.
To do that it will be necessary to review the
condition of the city finances at that time
AS ] have said before the debt aggregated
S2a,. 23377 15, composed Of great variety Of
(G) per cent, others seven 81 per cent, others
seven thirty~one hundredths( q 3D-100) per cent
others eight 81 per cent, others ten n0l per
cent, and Judgments against the city bearing
! tiveG per cent. The camors Of the taxpayers
were loud and deep. There was o universal
feeling that at any cost some relief must be
| giveu-that any change would be for the bet
ter. 1t was charged that many Of the obiga-
| lions Of the city were tainted with fraud. 1t
WAS evident that the city could no longer go
on bearing q burden Of two and one-half l2lg]
of one per cent on an assessment thirty-three
and one-third (33la) Of one per cent too high,
IN addition to tho burdens Of taxation imposed
by the national and State governments; and
q very large number OF our people justly be-
lieved that reducing the tax to one and one
half 40 of one per cont, and the interest on
the public debt to five 81 per cent, would be
an Immense stride in the right direction and
relief OF all
In the language of the preface TO the pre-
MUM bond plan: "Under the pressure OF
excessive taxation real estate has lost Its
value, the obligations Of the city have fallen
to ruinousIy low prices, trade rs stagnant,
every branch Of industry is suspended, the
whole community more or less impoverished,
md many of It's members suffering for want
OF employment.
to q settlement of this important question.
s. The financial embarrassments Of the
city having reached such crisis rs to de-
mand IN Immediate adiustm emit Of the public
Jtt, tit 11}IIt5t Council has adopted plan Of
settlement" etc.
It was also believed that In the course Of q
few years increasing prosperity and az Oil
hancomont of values would enabIe the city to
realize sufficient amount to pay It's current
expenses and meet the annual allOtments in
the redemption plan adopted.
Does the premium bond plan meet the ex-
pGCtaMOns OF the people, or even OF It's origin
atorB2 IT cannot be said That in any essential
particulars it is similar to any of the E1l-
ropean systems, upon which 1t Is said to be
based. Tho annual payments are not equal
lied. Investment in it (of other bonds WIS
sought to BIO made compulsory. The security
| is not perfect because it is out OF proportion
to the resources of the city to meet the debt
| Tho Administrator of Finance, In his pre-
| face to the publication of the plan, said:
"The City Council, in its efforts to find a
solution Of this question (inance relief have
been compelled to abandon the ordinary
forms Of finance as unequal to the occasion,
and to seek new and perhaps novel means Of
meeting the eXigenGy"
! It was, then at the time Of its adoption,
confes3edly an experiment. Do the three
years In which the experiment has been tried
demonstrate it's success OF faiure2 Let lis
see. ] desire to state OF this point that. In
speaking of the premium bond plan, | speak
Of Its general operation, unaffected by any
disturbing cause, as ii all tho holders of
bonds had funded them into premiums.
The present assessment OF the city, as also
for the next two years, under existing laws
is s1l 100000 lin round numbers). The tax is
limited to one and one-half 40 per cent, out
Of which enough Is to be appropriated TO meet
miums Of that year-until the year 1884, WHEN
at least one half ca Of ono per cent shall be
appropriated yearly to meet future allot-
meuts. 1t will be observed that one-half OF
one per cent cannot be exceeded for that pur-
pose. Under the operation Of this act in 1876,
| twenty-six (26) cents out Of the tax of one and
une-h llf 40 was included in the budget to
meet tho allotment Of that year, amounting to
1907. 500. In 1877. forty cents, to meet the nj
lotmeDt, amounting to SAG $50 In 1878, forty
to $500, 800. Will fifty cents, the limit, be
sufficient to meet the allotment for 1879?
Let us see Theassessment being Sill 100000
One-hnlf of one per cent will be-. $4,000
The allotment will be ......... 500, $50
A deficiency of........,...,... $43, $50
Built will be said that 1t is not just to treat
the question in that light, az the city has q
large amount to the credit of the premium
bond account, with which to tide over any
disturbing causes, q favorable one affecting
the general operation of the plan by the re-
fusal of bondholders, representing $9,139,867,
nearly one-half of the whole debt, to fund
their bonds into premium bonds; A most for,
tunate thing for the city, since it has enabled
it to realize large amount $500 7G0, to behp-
piled to the reduction Of the debt. And this
brings mo to the consideration OF another
branch Of the subject. What guarantee have
we that some Legislature In the future may
not repeal the premium bond act and try
some other "new way TO pay old debts. -
When we reflect that in 1852 the Legislature
passed an act In relation to the consolidated
bonds, couched in terms as strong as the Eng
lish language can afford, and that in 1876 a
"coach- and-four was driven through it, what
security have we that any act passed by one
Legislature for the relief of the city may not
be repealed by the next? Tho act referred to
lAooAl oayo.
From and after the passage Of this act no
obligation or evidence Of debt of any. descrp,-
ton whatever, except those herein authorized,
shall be issued by the city Of New Orleans,
or under it's authority; nor shall any loan be
contracted, unless the same be authorized by
| a vote of q majority of the qualified voters OF
said city, which shall be taken in the manner
prescribed by the City. Council, after ten days
proclamation by the Mayor, in the news,
paper chosen by the Common Council; and
no ordinance creating debt or loan shall be
valid, unless for some single object or work
distinctly specified therein, and unless said
ordinance shall provide ways and means for
during the whole time for which said debt or
loan shall be contracted and for the full and
punctual discharge at maturity Of the capt.
tai borrowed or debt incurred, and such ordi-
nances shall not be repealed until principal
and interest of the capital borrowed or debt
| incurred are duly paid and discharged"
| l am told that the consolidated bondholders
| slept, upon their rights; that they did not use
due diligence in the protection of their privi-
leges, and that consequently they have no
reason to complain that their rights were
| s~..-. l.t L -. i l. IL.