The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-05-07
THE RAILROAD DECISION.

Yesterday was bright day for Louisana
and one that will be marked with white
stone in the future history of the State. The
decision Of the Supreme Court in favor of the
New Orleans Pacific. ordering the issue of the
two millions of bonds to that road opens ,lp a
new era of prosperity to our city and State.
The universal satisfaction with which the de
ciSOn was received was n most flattering tes-
timonial, but one that was entirely deserved
of the popular confidence that is repOsed in
Mr.. Wheelock and the management of the
road, under whose auspices the success of this
great enterprise has been rendered possible,
and, indeed, may now be regarded as assured
These gentlemen deserve great credit for the
energy and perseverance they have displayed
in this matter under serious difficulties and
they are entirely deserving of the happy frui-
ton that Is now assured to their enterprise
and persistence.
Yet. despite the popular satisfaction with
which this decision was received, we are told
that State consols declined point as soon as
it was made known on Carondelet street
Why this should have happened we cannot
conceive, as about the only bearing the issue
of these bonds can have on the consolidated
debt is to assure to about twelve millions the
entire benefit Of the tax imposed to provide
for fifteen millions of Indebtedness. This
fact, which we thought was generally under
stood, should have raised rather than de-
pressed State cOnsols, and we have no doubt
but that this will be the effect of the decision
finally.
This decline in consols was doubtless attri-
butable to the erroneous impression that
these railroad bonds would be Immediately
put upon the market. But even this crcum-
stance should not have had such an effect,
and it Is inconceivablc to us how the issue Of
these bonds could affect otherwise than IA
vorably the new consols Of the State We
understand that the impression has been Gre
ated abroad that the issue Of this S2,00o,ooO
loan is to be made in new consols, bearing in
terest to be paid out Of the 81 mills interest
tax This is not the case; it is a separate and
distinct loan Of S2,o00,0o0, in per cent bonds,
to the railroad, for which the State takes in
pledge $2,50000O Of the first mortgage bonds
of the road as security for the prompt pay
ment Of principal and interest The only
effect this loan has on the new consols is to
limit the possible interest bearing debt Of the
State to Sl3,00o,000, thus making the 5 - mills
interest tax provided for S1500O 900 entirely
available for the lesser sum.
This, however, is hypothetical merely, for
the issue OF these bonds is based on cond-
tons which prevent their being placed on the
market Immediately and in bulk The sum
the road is now entitled to receive does not
exceed S250,000, and we question if the road
will find it necessary or advisable to offer
these for sale.
There have been no cOncealmentS in the
management Of the road and we can, therefore
say with confidence that the road does not
graded. Whether these bonds shall be drawn
at all depends on exigencies yet to rise. But
when they are drawn, whether they are put
on the market or not will depend upon the
capitalists Of this city. The real benefit the
road derives from the decision Of the
Supreme Court IS that it establishes
it's credit and enables the company
to float its other first mortgage bonds, which
it IS authorized TO issue to the amount of
$5,O00,0O0. Ii the banks, insurance companies
and other moneyed institutions will now
come forward and advance the funds the road
may need from time to time on these securities,
it will never be necessary for dollar Of this
loan to be placed on the market. It is barely
probable that the road may not need the
State credit at all but il it should call for the
bonds authorized to be issued to it, these
bonds will rank among the best Of the State
securities. Not only is the State as much
bound for them as for the funded debt; but,
besides, they are secured by first mort
gage on the road, which can be sued and made |
whereas the State cannot
This loan of the States credit we confidently I
assume will secure the completion of the road |