The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-05-10
THE SOUTHERN BANK.
THE CITY vs.. THE SOUTHERN BANK
REVIEW OF THE CASE.

REVIEW OF THE CASE.
Edjfor Democrat Referring to the recent
verdict of O jury in the Fifth District Court
in this case, your local columns of May CON
tanned the following
THE BIG SUIT
1t is claimed In official circles that the verdict
ern Bank Is the result Of the great strength q p
the case OF the city. Prior to the decision 1t
was doubted whether special lqry c i'l, o w
Germ, especially when the city CORPORATION was
the plaintiff. The result Of the trial has there re-
financial officers of the city. who say that they
are now satisfied that the supreme Court VIII
award the city the entire amount of the claim.
Comfortably to the manly and Just course
pursued by you in controversies Of this char-
acter. beg the favor Of the publication, IN
your valuable paper, of the following state
nent in behalf OF the Southern Bank:
The Southern Bank was established uider
the free banking act Of the State, In 1870 us
eminent success, inrariablesolyency and pune
tuality, illustrate the wisdom OF that system.
Whilst all the other banks OF our CITY, during
its existence, have been coinpelied 70 suspend
payment or to redeem their circulation with
eenrecated paper. or to issue certified checks,
fhfs hank has never ceased to fulfill to the
letter all its obligations, to preserve and
promptly pay its depositors, SO that never o
dollar has been lost to parties dealing with it,
cash his money on demand
The security given by this bank for its cir
culation was the deposit OF city bonds with
the State Auditor, as provided by the act 81
the Legislature. To furnish this security the
bank had to purchase at par, or very nearly
par. some six or eight hundred thousand
dollars of city bonds As its circulation was
retired these bonds were withdrawn from the
State Auditor and became the assets of the
bank They have ever since remained as
such These are the consolidated bonds, which
the bank has declined to fund into premium
bonds, contendng that the consolidated bonds
were secured by q solemn contract, which
could not be impaired by an act OF the Legis-
lature or by any authority. The present city
administration has resisted with great per
tinacity and zeal this claim. Hence the bitter
litigation which has been carried on between
the two corporations. The merits of this
controversy are now before our Supreme
Court on an appeal from judgment OF the
Third District GettEt IN fave, 81 the hnnk-
1t Is not to be disguised that the present
CITY administrators have exhibited no little
transportation and indebtedness against the
bank, for its opposition to q pet financial
scheme, founded upon q Reputation on the
contract with the consolidated bondholders.
One of the proofs Of the existence OF this
bitterness on the part of the administrators
is the suit now pending in the Fifth District
Court In this suit verdict was recently
rendered. the foreman stating that it was
rendered under instructions Of the judge. for
S84. 900 in favor of the city. Whilst pecunia-
rly this verdict inilicts no serious damage on
the bank, which holds over 100000 OF llquida-
ted debts against tine city, and cannot add to
the resources of the city, q dozen of whose
creditors have pounced upon this judgment
with seizures, there is involved in the verdict
n degree of injustice and hardship to q re-
spected and faithful public institution from
which all iust-minded and thoughtful citi-
zens must revolt Had such O verdict been
rendered against an individual of limited
means and on such grounds it would Justly
A
plain unvarnished statement of the case
would evoke these sentiments from all honest
minds.
IN 1869 the Southern Bank was chosen Fiscal
Agent of the city under article 118 of the city
charter, which provided that all payment Of
bonds of the city should be made by and
through such agency. and all moneys received
as taxes should be applied to such payment,
and IL the bank, not having funds of the city
with which to meet it's liabilities, should
think proper to advance or loan the same so
as to meet the citys liabilities the bank was
entitled to 8 per cent on It's advances.
A contract before q notary was made with
the bank embodying these conditions Here
was the creation of an agency, of an instru-
mentality through which the political officials
of the city might conduct their financial Of
fairs. SO as to protect the credit of the CITY,
and enable it TO obtain advances when its re-
neipts should be behind its liabilities. Such
an agency subjected the bank to the control
of the City Council i'll reference to the dis
~
posted with the said agency for the payment
of the cty's debts. Amy refusal or failure Of
this agent to apply these assets to the pay
ment of the debts OF the city, when directed
nv the Mayor and Council, would have in
yolved grave breach Of trust on the part Of
the agent, and subjected him to all damages
resulting theretrom.
In 1869 the city was empowered to issue GER
tain bonds "to enable it to fund and lquidate
the balance of its floating debt then existing,
such as judgments. outstanding warrants.
etc, which bonds shall be deposited with the
Fiscal Agent Of said city, and shall be given
nv said Fiscal Agent exclusively in payment
at par, of debts now due by said city other
than those evidenced by city notes, full and
particular statement OF which debts shall be
prepared by the controller and treasurer OF
the said city, verified by the Mayor and the
members Of the finance committee Of the
Boards of Aldermen and Assistant Alder
men, and said statements OF said debts, veri-
fed and attested as aforesaid, shall be fur
nished to the Fiscal Agent of said city; and
it shall be the duty of said Fiscal Agent to
give said bonds at par In payment of the
debts of the said city to the creditors men
toned in said statements, or to their heirs or
assigns"
Under this act the exact statement, as re-
nuired thereby, was furnished to the Fiscal
Agent of the debts of the city, for which he
Is directed to give said bonds at par, and in
as due to the metropolitan Police. That was
the amount apportioned to the city as its
share of the expense of that institution, the
Metropolitan Police-an institution which
the city had struggled in vain to get rid of,
but to which it had then succcumbed and had
been compelled to recognize its apportion-
ment and to impose a tax for its payment
and to receive its warrants for taxes. Under
the law creating this Metropolitan Police it
was provided that the State Treasurer shall
receive the sum estimated and apportioned
to the said city from or through the Treasu-
rer thereof, aud give proper receipts for such
sums as he may receive
Agreeabty to this statement of the debt Of
the city, verified by all the city officials, the
Fiscal Agent, as directed, paid to the State
Treasurer and obtained his receipt in full
payment of this apportonment of the Metro
politan Police SS05, 900 Of these bonds
But the Board Of Metr0poitan Police re-