The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-04-27
THE NEW ORLEANS PACIFIC BOND
CASE.

The Supreme Court is evidently giving 10
the New Orleans Pacific Railroad case that
profound consideration which a matter of
such grave Importance to the material inter
ests of the State demands. Tho great bene-
fits that must result to the State from the
building of this road, directly by the immense
addition it must make to her taxable proper
ty, and indirectly through the revival of the
debilitated commerce Of this city, as well as
Of the large interior towns along its route
give to the issue Of this suit profound inter
est in the eyes Of all men who are concerned
at oil In the welfare Of louisiana an interest
to which we cannot affect to be Indifferent
Questions OF this kind can, OF course, have
no weight In the determination OF the case at
Issue, which involves considerations OF law
alone, yet where matters OF such vital conse-
quence to the public veal are concerned, they
cannot be utterly ignored by the Supreme
Court, and must influence it, at least to the ex-
tent of securing for them every favorable in
depreciation of the law that Is possible
The only persons who could possibly be in
terested adversely to q decision OF the case
favorable to the company, are the holders of
the State consols. 1t might be argued that
the addition to the present funded debt Of the
State OF the two millions of bonds proposed
to be Issued to the New Orleans Pacific,
would diminish to the extent Of the yearly in
terest on that sum the ability OF the State to
meet the aceruing interest on their consols
The law admits Of but fixed tax OF five mills
to pay the interest on the consolidated debt,
and, OF course, any addition to that debt must
n linz nf hn n
standing II this Increase Is to consist OF obli-
cations Of the same character as the twelve
millions now funded. This would be true II
the State obligated itself to pay interest
on the bonds proposed to be issued
to the road but this 1t does not do. If the
proposition is correct that the Citizens Bank
bonds are not part Of the debt of the State,
then there Is left q margin Of $3,ooO0oO
between the present funded and fundable
debt OF the State and the constitutional limit
alton OF $15.O0O,O0O. 1t necessarily results
that IL two millions OF this margin is placed
in these non-nterest bearing railroad bonds,
that the constitutional limitation Is more
nearly appropriated by that sum, and to
the exclusion of Understanding obliga-
tions; and the whole of the interest tax is
left to the holders of the s12 600, 900 of consos
now outstanding. To these but one
million more of Indebtedness could
be added to reach the constitutional limita-
ton, and then the tax that is authorized to
pay the interest on $15,OO0,O00 of consols
would be all available for the payment of
that on but s13O00000. The issue of these
$2000000 OF bonds, then, instead of being an
injury, would be an absolute benefit to the
holders Of the outstanding consols of the
State. The truth of this proposition is appa-
rent on the face of the bill. The State is not
merely protected against all liability on the
bonds, or the interest thereon, by the deposit
Of the first mortgage bonds Of the road in an
amount 25 per cent In excess Of its own issue
the bonds and interest on which falls due be-
fore those Of the State, but there Is absolutely
no provision made in the bill by which the
State is TO pay the bonds 1t may issue. It
will be impossible for the State to ever devote
to these bonds any part Of the interest tax.
and yet they will constitute two Of the fifteen
millions that tax was provided for.
But this is not the only benefit that will ae-
crue to the holders Of the State debt from the
issue Of these bonds and the construction OF
the road, which will inevitably follow. The
property OF the road alone, which Is not ex-
empt from taxation, will add, at the least estt-
mate, six millions of dollars to the taxable |
values OF the State while 1t will be impossible
to estimate the increase in the assessment of
real estate all along its route that will follow
its completion Not only will this effect be felt |
here In New Orleans, but 1t will be tenfold on |
the lands that lie along its route. lands that I
are now almost valueless because of their In !