The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-01-18
THE CITY DEBT.

( hill has been introduced in the Legisla-
,ure authorizing and empowering the city OF
wow Orleans to compromise Its bonded debt
...th it's creditors. This bill recites the va
.,mns reasons for such compromise, the
rave doubt regarding many of the bonds
ssaned by the city, the suits, counter-suits
and various litigation that has arisen between
The city and the holders OF Its different classes
u bonds, the heavy taxation that property
tears. which has rendered much OF 1t value
Icss and unstable, the certainty OF deficit
n the payment Of interest, and the enormous
and disproportionate debt that the city has
to bear.
The new bonds to be issued in accordance
with this act by the city In order to enable
Il to take UP its present bonds, are to be
known as the Compromise Liquidation Sc
ries," to be made payable in thirty or fifty
az new bonds for hundred dollars of old
and TO bear interest at the rate Of per cent a
year. All interest on the old bonds ID to
cease from the time this act goes into
operation.
To carry out the provisions OF this act
board OF liquidation Is created, consisting OF
the Mayor, the Administrators OF Finance
and Accounts and four holders Of "com-
promlse-liquidation" bonds, appointed by the
Governor. This board will ascertain the
present debt OF the city; it will see to the can
celment of the old and the issuance of thenew
bonds, superintend the payment OF principal
and interest, establish places at which inter-
est shall be paid-in fine, take complete con-
troll OF the new bonds. The board OF liquida-
. ton and the city Of New Orleans, or either OF
them, is given the power to contest the con-
stitutionality, legality or validity Of any
bonds heretofore issued by the city.
Such are the main provisions of this bill.
What would be its practical effect upon the
taxation and debt of this city?
The present bonded debt of the city, as as
certained by the City Council January 8, is
$1s,399, $50. The premium bond scheme pro-
vides for levy this year of S595,75o The
average tax, however, to be paid annually by
the city In accordance with the premium
bond scheme Is about per cent; the interest
on the city consolidated bonds is per cent;
so that the interest paid by the city on its
debt can be taken as per cent. A reduction Of
the bonded debt 60 per cent and Of the inter.
est per cent, such as this act provides
would leave the total debt Of the city only
$3.50 1922, and the annual interest only $780,.
1893 %. That is, the average yearly interest
to be paid by the city would be reduced II PEI
cent, and be less than one. fourth OF what
1t otherwise would be. With such reduction
an interest tax Of mills would pay the
interest and leave handsome sinking fund
Of $255,607 annually; mills tax would
leave large sinking fund, and even 8 mills
would suffice to pay the interest II taxes were
paid promptly, as they probably would be
with a reduction in taxation.
This bill is one Of such gravity and import.
ance, and affecting SO many important inter.
ests of this city, that we prefer to consider
the matter further and investigating the sub
iect more thoroughly before pronouncing
upon It.