The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-12-31
CONSOLIDATED BONDS.


The Court Decides that the Holders ws
Consolidated nonas Cannot Comper
the city by Mandamus to Levy = sps.
cial Tax.
No 7l67. State OF Louisiana ex rel. South.
ern Bank VS.. IL. Pilsbury, Mayor, and others.
appellants. Appeal from the Third District
Court, parish Of Orleans.
The city OF New Orleans was lncorporated
by act Of the Territorial Legislatr,re. an
proved February II, 1906, with the powers
usually conferred ON municipal corporations.
including that oil raising money for munich
pa PurpGssssss ;ssss py TAX upon real and personal
Under this charter, and such amendments
as the Legislature saw fit TO make from time
to time, the municipal government was ad-
mlnistered n until 1886, when. by. act approved
March 9. the city was divided into three mtl-
inequalities, each having separate govern
ment Tor local purposes, with all the powers
within their respective limits which have
been vested In the undivided city, except that
there was one Mayor for the whole city and a
general interest. P.28.
This act required tho then existing debt OF
the city to be paid by the three municipalities,
the quota OF each to be apportioned on the
basis of the amount Of taxes and resources
accruing to each: 1t created sinking fund for
the purpose OF paying this debt and interest.
section 10; and provided that In case OF re.
union "the debt Of each municipality shall be
paid by the Inhabitants thereof" section 2G.
,s dspcsrg ae sRprHyed March T.
law establishing the three municipalities
should, by any future Legislature be repealed
or SO amended as TO unite them into one cor
poration, "all the debts created.b by each Of the
said municipalities shall first be fully paid
and satisfied by each municipality respec-
lively" Bee. 8, y. 3S.
The contingency thus provided for was
realized ~ 1862; the three municipalities were
S 1snItsd assd6y 6y at aPgroysd February 2s AZ
District; the First Municipality, the Second
District; the Third Municipality. the Third
District and by act approved the same day,
p. 90 the City Of Lafayette was annexed 20
leans as the Fourth District
:. by subsequent legislation all that part Of
the parish Of Orleans situated on the right
bank OF the Mississippi was annexed as the
Fifth District, Jefferson City as the Sixth,
Seventh district Of New Orleans, s is7a % % fio f
In each case the city Of New Orleans became
liable for and assumed the debts OF the cor
poratiOns annexed, as 1t had done with re-
spect to the three municipalities and La
fayette.
During the sixteen years Of separation the
three municipalities contracted debts far be-
yOnd their resources, and they became greatly
embarrassed and finally insolvent. The
Legislature from time to time adoptsd meas-s
ures for their relief; 1889, .. "a; 1s47, o. i40:
1850, p 169; and an act was passed In 1850 for
the government and administration Of the
affairs Of the city Of New Orleans "in case
the three municipalities should be reunited"
Nothing was accomplished under this act.
and obvious as the necessity was for re-
union there were serious difficulties In devils
Ing satisfactory plan and In adjusting and
carrying out the requisite details. The "in-
habitants" were not able to pay the debts OF
each municipality respectively, as required
by section 2G OF the act Of 1896, and the Emu
inequalities" were not able to comply with
the condition precedent imposed by section
that all the debts creaied by said municipality
should JUss be fully paid and fully satisfied
by each. The debts Of the several munici-
palities were unequal In amount, and not pro-
portionate either TO the population or to the
each, and the constitution OF 1916 required
that taxation should be equal and uniform
throughout the State.
The Legislature Of 1852 grappled with these
difficulties. BY the two acts Of twenty-third
February, No. II, section 81, No 70, section 5,
the entire Indebtedness OF the municipalities
and OF Lafayette, including the quota Of the
old city debt apportioned to each municipal
fty In accordance with section Is Of the act OF
eighth March, 1893, and the separate debt
subsequently created by each, was eonsolida-
ted and assumed by the city Of New Orleans,
and bonds Of the city were Issued for the az
gregate amount having not more than forty
years TO run: The old city debt was divided
to the value Of the real estate within the
limits OF each, as fixed by the State assess-
ment roll Of 1851 /; and this quota, added to the
separate debt created by each municipality,
constituted the entire debt of each.
To meet the annual interest, and to provide
sinking fund for the purchase and final pay
ment OF these bonds. an annual special tax Of
$3.50, 600 was to be levied On the real estate and
slaves La the three municipalities and La
fayette, the rate per cent In each to be In pro-
portion to the Indebtedness Of each. The act
also required the Common Council, In the
month OF January OF each year, to pasg an
ordinance TO raise this sum, to be called the
consolidated loan tax; and it declared null
acts passed by the Council after the first Of
January In each year, unless the ordinance
imposing the consolidated loan tax shall have
been previously passed" The city of New
Orleans was forbidden to issue any obligation
or evidence OF debt except the consolidated
bonds; or 70 contract any loan, unless the
same be authorized by vote Of the majority
Of the qualified voters Of the city; and It was
also declared that no ordinance creating q
debt or loan should be valid unless for SIN
gle object or work distinctly specified therein.
and unless such ordinance should provide
ways and means for the punctual payment OF
the current interest during the whole time
Tor which such debt or loan should be con-
charge, at maturity, of the capital borrowed
or debt Incurred; and such ordinance was
made irrepealable until the capital borrowed
or debt contracted, and the interest, should
be fully paid and discharged.
Ii would be difficult to find municipal obli-
cations better secured than these CONSOLE
dated bonds apparently were. They were
recognized az valid by the Legislature In nuS
rnerous acts, from 1852 to 1874, and they en-
ioyed high credit In the markets Of Europe
and America. Under the free banking law OF
1866 they were received by the State as secu-
rity for the redemption Of the circulation of
the banks, and trust funds to large amount
were invested In them. The interest was paid
punctually, and some five millions Of the
bonds have been paid, or purchased and re-
tired, leaving some four millions outstanding.
The Legislature, on the twelfth OF March,
1852, passed an act, No. It's, authorizing par
lshes and municipal corporations to Subscribe
TO the stock OF corporations undertaking
works OF public improvement to be paid by
q tax on landed estate. This act did not au-
thorize the isgue OF bonds In navmant Of the