The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-01-18

Judgment tax. o. The regulation ~ !, 'aris
b. fairs Tor the future; the placing on then. I
ab.olute inhibition to create debt az also
# fsssIe any evidence, negotiable or otherwise
thereof
= Az to municipal debt. all the municipalities
were m tae same category and under the
reach Of Legal process As however many
discussions have taken place and much diver
gence exists upon the subject of the municipal
debt Of the city Of New Orleans and as The
, writer was member Of the General Assem-
bly, which passed the premium bond act
some statement of the reasons which gener-
ally invoked its passage may not he out Of
place:
!, The premium bond act secured an imne-
date reduction Of taxation Of about 100 Del,
cent, The interest was accumuating at
over $1,000 or nearly $4,000 q day.
The annual amount of taxation
provided at the time was nearly per cent.
The immediate reduction secured is ,nla,ies-
| toned. and the act has met with opposition
| from three classes
| J. From the consolidated bondholtlnrs who
contend that their debt should be- paid in full,
and that taxation should be levied to this
| end
q BY other creditors, who urged that the
premium bond act fepk away from them what
| they were entitled TO under the laws which
| provided fpr the creation of their debts. and
| hence was reputation.
| B. BY citizens and taxpayers, who urge hat
the premium bond act has been a means of
covering illegal debt of converting it into a
| legal form.
As to the first two objections it Is obvious
| that a legislator, having in view the interest
| of the community and the reduction Of its
| burdens, could not allow them to influence his
mind. IN fact, the situation was such that
even without regard to the people who of
course ore, under all circumstances first to
be considered a reduction was necessary In
| the Interest of creditors themselves. As to
the third objection, IL was equally without
weight because the premium bond plan did
%9 h do qr %, g Or d.stoE nE m,gG'g i" the
| the passage Of the. premium bond act was
authorized by Legislative act. All
of ii was negotiable, and, therefore, Of
necessity in the. hands Of third holders. True,
much Of it had been the result Of extrava-
gance and reckless expenditure, but apprn-
hend that there does not exist Il lawyer al all |
familiar with the settled Jurisprudence on the
subject who will contend or think that, where |
bonds are legally authorized and issued under |
adequate power, the misapplication of the
funds arising from the issue of the bonds |
Affects the legality of the bond itself The
correctness Of this proposition has been al |
firmed and reafiilmed not only by the Su- |
preme Court uf the United States. but |
also by nearly every State Supreme
Court in the Union. But you wifi say
there was no objection to the bonds. |
all but the consolidated which went to the |
very right Of the city to issue The bonds. aud. |
therefore. did not come within the reach Of |
this doctrine. This is quite true but the pre-
MUM bond act dih not and could not, in any
way. do away with or cure this iIlegality if It |
existed. Let me endeavor to make this ,clcar
The illegality alleged was that certain city
debit In fact all but the consolidated al
though issued under authority Of legislative
net, was illegal because of n want of power in
the Legislature or city tn issue debt without
complying with n clause in the con
solicated act. Grant the proposition as
true Grant all the debt but the consolidated
Illegal, what iIlngalitv did tho premium bond
mt u Iarrt rf,ii a |
Were tho bonds not already authorized by
Legislative act@ If the already existing legis-
lativ" act was null because of the want Of
power how could the premium bond act.
which was only Legislative act. be anything
els" but null for the same reason? Hence
the bonds called premium bonds import no
greater legality than did the bonds already
outstanding, and for which they were OK
changed. Hence, If to-day Judgment If the
Supreme Court were tn be rendered declaring
I That tho clause in the consolidated act relied
ON constituted contract and prevented the
city or the Legislature from issuing any
bonds in violation of its terms, the premium
bonds would fall as dead as ltcless as If the
other bonds were outstanding and had not
been exchanged for them. You may ask. why
then have issued the premium bonds2 For the
bond act an Immediate reduction of taxation E
was obtained. without eopardiHng or impair
ing any existing illegality and without cut
tlng OF any existing remedy to that end. In
lllegality Of all the debt but the consolidated
Taking advantage Of this charge the city con
verified her debt into n less onerous form with
out doing away with the illegality. if it OK
IStfd. She, So TO speak compromised q suit |
with the proviso that if she won the suit she
should pay half the amount, and if she lost ii |
the creditor would get nothing at all Is it
not obvious that this arrangement was d wise !
one for the people? Is it not clear that it pro
te'mitted none of their rights and lightaned
Their burdens True. much clanlor was then
aud Is now raised by the consolidated bond
holders, claiming that the debt was rendered
valid whom it was illegal; but how could
: public servant bearkeniug only to
The stricken people whose interests he
give ear TO n clamor evidently the {
'esut of private interest. Some cutlery has 4
,e"n heard upon the ground that the premium
,ond plan was paying money to tho bonds
'laimed to be Illegal and that even admitting
he llngality not to have been cured bv the
,lan. yet pending the decision of the claimed
LEGALITY, much public money would reach
probably illegal claims. This is n misroncep-
ion, for fire fimes az much wouid hare be6u
'did out had not the premium bond act been +
'dssed resume no llegality is re- (,
moved by the premium bond act l
No right is Yielded and q breathing Q
lrgng OF any illegality not over the shoulders
II the people. In this view 1t was wise act,
'ecause it enabled an easy compromises. which
compromised away tho rights Of creditors
".
md compromised no right of the city what
YER If the illegality was declared existing
avail"d her. II II was declared non-exsing
be creditor was bound by the compromises
allied premium bond plan" in the meantime
made. or course the cutlery about not paying
he consolidated and sacred creditors Is mere
ubterf'igc. If the other bonds are illegal
nd they arc declared So they will fall. If
gal they are upon an equal footing. and oil
lust fall alike or rather stand a like reduc
Ion IN the Interest of common payment and
onmon public relief.
pretermt mention of the many important ;,
dvantages obtained by the axpayer by the y
rcminm bond act, the limitation on the rate
tc. Tho Legislature of 1877, then in dealing
18th the question Of the city debt, found It
inverted by Legislative act into n less oner-
US form found it the subject of controversy
the courts. They left it AS they found it,
tralIse it the controversy was decided favor
bly, to certain alleged illegalites. the debt Vi
ould tall if against them. it was already &
inverted upon terms us favorable to the PEG =
or, fh.,v. "A "a,