New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-09-06

able railroad property. This form OF inuep'cun'Ss
has long existed in Louisiana. So long ago rs 100 .
that State granted aid to railroads to the amount VI
81. 100000. These loans, however, do not appear
TO have been secured by any property lien ON the
| roads which indeed were not ~ existence al the
time, If they ever were afterward.
While there is 10 doubt that the debt contracted
within the first six years after reconstruction was
extrayagaptly large compared with the benefits de-
rived il did not greatly exceed the state deDt al
period long anterior 10 the rebellion. The amount
of that debt was reported by the Secretary OF 'he
Treasury in 1912, in response to resolution OF
! Congress 10 he S23, 9S5 600. TO this shonld be
added 1857 900 on account of UnitedStates surplus
| revenue 4 posited with the State in 1897. ms
would make a total Of S2iG22.0Oo. sum only
50 37S 900 less than the debt in 1875, when had
been largely contracted TO repair the damages ana
losses OF the rebellion.
| In 1873 Louisiana proposed compromise WITH
her creditors and offered TO fund the debt IN new
bonds bearing per cent interest Tor 60 per cent OF
the face of the old debt. A law to enforce TINS
| proposition was enacted ia January, 1870. Inns
| law evoked sharp criticism from tue hoiuhls Vi
Louisiana bonds and in reply to 4 letter from GOV
crnor Kellogg explaining tee act and urging its ne
cessIty committee wrote, February a 1874 call
ing his attention to the fact that while the rate OF
taxation in New-York for state purposes was 81
mills. in Louisiana it was out 23i2 mills. Respect
| ing Che character of the Funding Law the commit
tee said
Uls simply a proposition Of forced purchase ron
present holders at Tie rate Of cents on me SoI
~. o,itfa udur obligations Of Commonwealth WITH,
ss the Goyern5r hss so abundaIty show3,Is perez
anie discharge those Ohls nous III lul sauld
snch unnecessary ami even wantom leinoaoT 9 9s
be- almost without parallel and W. cannon pei'"e nc
the citizens OF Louisiana WI rcr scrtnuous hon
/ csty which their >Ia'e has hitherto borne
The law was carried into effect. notwithstanding
tbe protests of the states creditors ana by thlS
| act. for which Democrats and Republicans Were
alike RESPONSIBLE the State Of Louisiana repudiae'
tvo-6tths of its debt and clothed itself with DIS
| honor. The debt thus scaled and established was
! then declared by Constitutional amendment
gdoptcd in May. 1874. to be a Aid contract be-
tween the State and each and every holder OF salh
bonds. which the state shall by means and in no
wise impair p: an interest tax oil inlus was also
ests blished by the Constitution
In June. 1873, Governor Kellogg reported The
an.arn. of the State debt to be 81 279,O and
the yearly interest charge 81 100000. Ia October
Il ST. an association Of English capitalists proposed
90 lend the state So 1904 900 five pei cent bonds
running forty-iive years. if the State would call N
and nav Of hor outstanding debt. TINS proposition
appears To have been called ont by the expressions
| in favor Of further reputation. which began 10
muliiplv as soon as tie Nichols Government was
! fairly installed. The Offer not accepted.
The state Auditor reported. January !, 1879. thar
tho amount Of bonds funded to date under the act OF
1874 was SI9 800. 122. for which new consolidated
bonds to the amount Of $l1 73OO73 had been issued.
/ There were still outstanding SLGiGS2O oil ola
bonds and warrants The Auditor estimated that
| when the funding operations were completed th'
debt would amount 20 $I2.13616G. He reported
that there were outstanding Did bonds not fund
ohle Amounting to S3.97l 900. According 10 this
calculation the total deb, recognized and NJ ecog-
nized. amounted 20 SlG.107, 1868. Among the bonds
which were funded were S4il, 900 issued in 1897
Ia the New-Orleans and Nashville Railroad Com
panv in exchange Tor its stock. This road Il is de-
clared. was never built.
\ Constitutional Convention was called III Jan
nary 1879 70 meet ~ New Orleans in April, 1879,
one Of tho purposes being 10 rcpudiate some more
| of the state debt The mere unauthorized avoNal
Of this purpose caused a monetary panic and the
| suspension of several banks ia New-Orleans. even
| before the convention assembled. These banks
had made heavy investments IN Louisiana secu 10
hes in consequence of the loud professions made
| Ly the Democrats when they gained political
control Of the state, that its credit should be
presery.d at any sacrifice. The refusal Of
| p-oncl ~ holders outside Of New Orleans 10
| nav their taxes, and the apparent strength
/ of the reprdiaiion sentiment in the dominant
rorfy sent Louisiana securities down on the.run.
and repaired the capital Of Of the banks which
had trusted 20 Democratic professions of honesty
to sucb an extent that they compelled 10 sus-
mend pavment. The strongest banks in the city
we're only saved from tie fate by hasty remit
tances from NewYork, IN response 20 appeals by tel
egraph fer and. good many Northern and foreign
CAPITALISTS were as much the victims of misplaced
confidence n, the. New-Orleaus bankers Many OF
Them thonchr that the refusal to pay tazes due
10 hostility TO the Republican State administration.
and HAT under the new regime taxpsvers would
I nrorr+i, rcsrond 10 the demands which all knew
thcv were fully able to paw. Accordingly. Louisi-
ana bonds which were quoted al g. at the close of
Governor Packard's admin stration, rapidly rose to
| s.. In March, 1879 they had declined to Is, and
in Jnly 10 SO IL has been discovered that hostility
to Republican administration only pretence.
and that the real hostility Of Louisiana Democrats
Is TO the payment of their honest debts.
In Nay. 1879, thc State Auditor reported 10 the
Constitutional Convention that the amount OF taxes
collected from $40 TO 1873 was Sls.339,16o and
The amount of taxes due and unpaid for the
same period was S11, 3f5 $50. about IS per cent
of the amount levied. The rate Of taxation had
varied from 23l2 to II mills. The Committee on
| State Debt IN the convention presented majority
| and minority report. The majority report recon-
mended the reputation of all but 81. 100000 the
debt Tie minority report advocated the payment
of the entire debt hut recommended that the inter
est be reduced from TO per cent. On June 20
the convention. by a vote of SIS TO 2S limited the
rate Of taxation to mills for ali purposes. At
this rate il would of course be impossible to pay
the ordinary expenses Of the Stale Government and
have anything left with which to pay the interest
on the public debt.
This action was afterward recOnsdered and the
convention adopted. July 81 an ordinance which is
to be submitted to the people for ratification. This