The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-06-14
THE CANAL BANK TAX.

fl6Glt0f IJBffIOGfut-DllCB L bsSSu YOU
my Inquiries In regard to the Canal Bank ta1
on Saturday, published In your Sunday pa
peri you have had the president OF the bank
the Treasurer of the State, and Mr.. Newman
made much out Of them, but the crust Of tht
pie has been slightly cracked, and maybe By
close bryinR we may see little way In.
AS i said in the beginning, / make nc
charges. The, subject is a public one, con
Germs every citizen, especially In these times
Of REFORM and, therefore, every citizen has a
right 10 inquire and 10 comment
] do not arraign the bank before the public
bar for trying to pay its taxes as cheaply as
the law allows IL and all other corporations,
as well as all Individual citizens to do. This
| would do myself. Nor would blame the
bank for paying in State warrants at one cent
IN the dollar, II the law said So Indeed be-
lleve u to be simply just and honest for this
State to receive It's own obligations for debts
cue ~ just Hs much SO as In the case OF lndl-
vidualE.
But all Of this Is not to the point.
The president OF the bank tells you he has
paid the 1920, 800 taxes in full in State war
raItsl into the treasury. The Treasurer tells
you that he has received the amount In full,
Ia warrants, into the treasury. Mr.. Newman,
III can tell You chat the warrants turned
over In that case were bona fds legal war
rants that had some of them costing me
fifty and sixty 10 loo cents on the dollar"
HE also says 1t Is untrue that these war
rants ore only worth fifteen cents on the dol
This ID all you got out of Mr.. Newman, for
he seems to have been "a little hurried"
Now. let uB sift the case little.
Il The bank claimed to have considerable
amount Of It's capital invested In United States
bonds andiwhef the State undertook TO tax
ita entire capital Ii resisted payment TO the
extent of the tax ON capital then invested,
claiming that such bonds are not taxable.
n The law officers and Auditor Of the State
do not admit this position of the bank; they
sue before the Third District Court and get
Judgment against the bank.
81 The bank, according to It's president was
advised by It's counsel that there was no
doubt Of the Judgment being reversed by the
Supreme Court Of the United States IL an APP
peal was taken from the decision"
Al But, "the direction of the bank In order
Id avoid expense, trouble and delay, con-
rh1dnu. la accord with their attorney, that they
would avail themselves of the law authoTiz-
ing eDnlpromise settlements with the Au-
dtorsn
B. Uompromise twas effected In accordance
with the opinion Of Assistant Attorney Cen
eral &c. Egan, that IL would be to Che In
tereat of the State"
written opinion TO the Auditor advising COM
ufofnse with the bank, the Auditor orders
the Treasurer to receive State warrants OF
1910 in payment Of taxes due for is75-76,
and the Treasurer makes the settlement
\. The law on the subject Of compromise Of
obligations To the State reads as follows
tand we must not forget that this law Is part
81 the rich spawn Of Radicalism in LOU
isianA)s
Whenever the Auditor shall be satisfied,
either from his own knowledge OF fact, or by
returns made on execution or writs OF tIeri
fuclds, that the State cannot make the
amount due for the old bonds or obligations
due the State by compulsory process, then
he la authorized TO enter into such arrange
ments and make such compromises, either
with the principals on their securities, as he
may think most advantageous for the State
and To cancel such bonds or obligations upon
d payinent OF o portion thereof; and he shall
report to the General Assembly the action he
has taken, and his reasons therefor" See Re
ysed Statutes, section 1TS, page 58.
n. The letter, or opinion of the Assistant
Attorney General furnished the Auditor, ls
aS follows:
ATTORNEY GENERALS OFFICE,
New Orleans, La. !
Hon. Allen Jumel, New Orleans:
Il rn III the opinion that this settlement will
he for the interest of the State. My reason for
this opinion lis that these two cases Chose in
soaFt In, Involve qnestl Of the Liability 3i ths
States bonds. The cases will undoubtedly go to
the Supreme, Oourt of the United States unless
compromised, and the State might lose the
entire tax, $4,000. ] therefore recommend the
settlement, J. q EGAN,
Assistant Attorney General.
Let us now consider these points in their
regular Orders
Il The bank resisted the tax on her capital
because it was invested in United States
bonds.
This ground is untenable. The State does
not undertake to tax United States bonds.
At taxes tond only in justice to all It's citlzens)
oil capital 1t can find; the officers Of the bank
state the amount OF capital, and the tax is
laid thereon. If the State admitted the pro-
position Of the bank she would find precious
Nttlecapital to tax, as United States bonds
sire as easily purchased and sold as peanuts
and nothing would be easier than TO f0restall
the assessor with those bonds and then I'M
load as soon as he walks out repeat that
the State taxes capital not bonds. have
never seen the decision of the Third District
Court Ia the case, but no just Judge could ig-
more this point.
\. When suit was instituted against the
bank III the Third District Court the law Off
cers of the State sustained the view | now
put before the people.
81 If the counsel of the bank had no doubt
OF the Supreme Court OF the United State re-
vefSing the decision OF our court, In q matter
where such large sum of money was con-
cerned, the plea that compromise with the
Auditor was sought to avoid expense trouble
and delay, is as thin as water. Corporate
bodies are not sensitive to trouble" like indi-
viduals; "delay" would mean simply that
the bank was using the money; and the Sex
pensen would not be large. But to offset all
these three evils, even IL they existed, the
reversal of the decision was TO be absolutely
c0urted by the bank 70 secure the reversal
was to strengthen her opposition to taxation
In all time.
Ii the story of the bank be sincere 1t is
largely lacking in wisdom; If 1t be insincere,
the bank has poor opinion Of the common
sense Of the community.
81 What the warrants cost Mr NegmGr is
not a matter OF any moment to the public.
am willing to admit they have long lain in
his vaults representing some of his past fail
ures in speculative adventure, But when Mr..
Newman says that it is untrue that these
warrants are only worth Is cents on the dol
lar, make issue with him. / have this day
made 1t my business to inquire right among
the informed brokers of CarondeIet street,
and am told that the warrants, at the time
OF the Canal Bank settlement, were worth
but Is cents or Is cents on the dollar, and that
such Is their market value to-day-that hold
ers are glad to sell at that price. Certain it
Is, that The State could have taken any money
paid by the bank and bought the warrants at
1B cents on the dollar
If. then, the bank herself settled with the
State in State warrants, and was legally enti-
tied To do she must have Maid her claim