The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-07-22

Bonded debt
Principal .S182 ,O07 90 If
=; Interest 1876, ~ 55-s21 .eo5 zso d
Floating indebtedness, including
| judgments. interest thereon as
| per report OF December 81.
| 7s..."....-.s..-.......... 1.a7s757 "a
Total debt Of the city Of New
Orleans ;........ .s2s. $50. .oo7 90
| Should the lessees OF the wharyes,
! under their contract with the
city. fall 70 comply Herewith
which at present. seems more
than probable,tO the above must
be added d.-......-...e.......-..... 10000 30
The opinion obtained from the best legal
| advice as to the legal status of the debt Id a.
| follows:
That the consolidated and railroad bonds
were authorized by laws passed anterior to
| 1860 The considerations for which are ad-
rnitted to have been good, and the obligations
lthaving been acGuiesced In for so long q time.
| and being generally accepted as valid obj
gatlon OF the city, 1t is only necessary to
are outstanding In their original form, few
OF them only having been exchanged for pre-
MUM bonds.
The interest and sinking fund which the
law originally provided for the account of
these bonds has not been levied for humber
OF years, as by authority of subsequent acts
OF the Legislature, and more especially the
act known as the premium bond act, the In
terest on these bonds was not provided for,
and is now past due.
suit now pending before the Supreme
Court OF the United States has for Its object
TO force the levy by the city OF q tax TO pay
this interest and supply the sinking fund.
The suit does not include all the consolidated
bonds, but the decision, II In favor Of plain
tiff, will be availed Of by those who hold the
bonds not included In said suit
The railroad bonds mentioned In report.
amounting TO s71s,ooo, are nearly all passed
said bonds which matured on the first Of MAY.
1874, are prescribed. It Is on bonds Of this
class that judgments have been rendered
from time to time against the city, and upon
which, as In the Morris Ranger case, q man
damus has been recently made perem ptory,
directing the city to levy q special tax In De-
cember next to pay the Judgment on said
bonds.
The bonds known as seven per cent bonds
OF 1869 were issued by virtue OF act No. % Of
1869. This act authorized bonds to be- issued
for two pnrposes-one to fund the floating
debt OF the city existing on the twenty-
seventh OF February, 1869, which floating
debt at that time barely exceeded s2,000,0o6;
the second or other object OF the act WAS to
fund city notes. But only $500 OF the bonds
authorized were used for the floating debt.
and S805, 900 OF them were Issued by tne Fis-
col Agent for the purpose OF paying what was
known "a as the Metropolitan Polics apportion-
ment, which payment, it Is claimed BY the
city, was improperly made, and has resulted
in considerable injury to the corporation but
as said bonds were set afIoat under color o1
law, and have circulated In course of business
from hand to hand, the innocent holders OF
said bonds are doubtless entitled to eIaina
and exact the full amount OF the obligation
they hold.
There were also under this act S2,04e,O00 Oh
bonds issued to fund city notes. but no more,
OF these bonds were issued and the unssued
were ordered to be Cancelled by the thirty
seventh section OF the city charter, act NOT
Of the extra session Of 1870.
by the same act the Legislature author
1zed the city OF New Orleans by It's forty
seventh section to Issue $3,oo0,000 of per
cent bonds, maturing In twenty five years. to
be used exclusively In the funding OF city
notes, judgments, warrants and other float
ing Indebtedness Of the city. The bonds
were authorized to be exchanged at Is per
cent less than the face thereof, and they are
the obligations denominated in the report ag
I per cent bonds OF 1870, and the most of
them, In fact. all except S447, ,15o have been
funded into premium bonds.
the bonds mentioned in the report as pre-
MUM bonds, amounting to ST., ,373, 76D, ,sWere
authorized by act No 81 of the Legislature,
May 25 and August 81, 1875, and
were issued In exchange for other bonds.
1t was hoped that the advantages Of the
scheme would induce all holders of the bonds
of the city to avail themselves of it as tIe
only means Of liqnidatlng the principal and
interest to Of s the he Der debt in tifIy years.
scheme proves that 1t Is q most admirable
me, and would have secured all the relief To
he, city that ito origfnators claimed as under
ts provisions the interest on the entire debt
vas temporarily suspended by consent OF
hose who availed themselves of the plarl. and
aid interest, at the rate OF per cent Der an
lu10, was only paid with the principal on auch
erles Oh bonds as were drawn, the City Coun-
IL being required TO provide In the budget
nnnaliy Iund sufficient to meet the draw
ngs.
Although over $11, 100000 of bonds, or one
ALI OF the bonded debt, have been exchanged
Or premium bonds, still 100000 Of bonds
ave not been exchanged and the holders
laim I'm tnat their bonds are 80 strongly secured
nder the acts by which they were created
nat the city must provide for their payment,
nd are constantly resorting to the courts for
which the people in their present
impoverished condition are unable to satisfy.
lad the city been prosperous and the real
state advanced since the creation Of the
premium bond scheme, it would have retired
he principal and interest OF the debt Id fifty
,ears, bus as the contrary has occurred We
h1nk the holders Of the entire bonded debt
you'd be better satisfied In the future II It
we're funded to near its present market value,
which would reduce the debt OF the city Io
bout S5,600,000, and a low but certain rate Of
interest, say three or four per cent, HA5su HA5u
within the ability ofthe city TO pay proHpsiy
This would make the city bonds more de-
irable investment for capitalists ana Lnoss
nat cannot afford to risk the uncertainty OF
atfIng an income to live from the drawings
the premium bond scheme
Yonr con- mittee are OF opinion that all the
onds enumerated In this report are author
.ed by the statutes for a great variety Of
urposes, and whether any OF said bonds,
zcept those used to pay the Metropolitan
oIiee apportionment, were gwen for debts
claims against the city, bavtng been In .
Continued On FIflh Ra8e,