The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-01-08

He tney are maue. should you desire or deem
1t absolutely necessary to provide certain
means OF payment for the services and claims
which you may deem essential for the carry
Ing on OF the government, 1t seems to me you
could better accomplish this result by placing
all claims which may be considered OF that
character on the same footing; and directing
the proper officers to set aside from the gem
ervl fund, as Ii accumutates, an amount suffl-
eient to insure their payment.
The bonded debt of the State now amo,,nts
In consolidated boEds, TO s11, 724, 800; estima-
ted amount yet to be funded s4ss, 100; general
fund warrants tKelloggs statement), $685.
720 %, as reported to me by the Auditor The
collection Of revenue from the five and a half
mills tax not having been adequate to the
payment Of the interest coupons due on the
first Of January, 1879, they have remained
unpaid
Deeply as depIore this result, | was pow
erless either to avert or remedy III and in
order that this may be understood, a review
OF the funding Legislation seems necessary
BY the provisions OF the funding law. State
consols were authorized to be issued to the
extent OF s16,000,O00, or go much thereof as
might be necessary, payable forty years from
the first day Of January, 1874, to bear interest
at the rate Of per cent per annum, payable
semi-annually In the cities Of New York and
New Orleans on the first days OF July and
January in each year, interest coupons being
annexed to the bonds. The provision made
for the payment Of the principal and interest
OF these bonds, THUS authorized to be issued,
was tax OF five and half mills, to be annu-
ally levied on the assessed value Of the prop
erty, real and personal, In the State. The
language Of the statute Ia as follows:
"That tax Of five and half mills en- the
dollar OF the assessed value OF all real and
personal property In the State Is hereby an
nually levied and shall be collected, for the
purpose Of paying the interest and principal
OF the consolidated bonds herein authorized,
and the revenue derived therefrom is hereby
set apart and appropriated to that purpose,
and no other, and that 1t shall be deemed O
felony for the Fiscal Agent or any officer Of
the State or Board OF Liquidators to divert
the said fund from its legitimate channel, as
provided, and upon conviction the said party
shall be liable to Imprisonment for not more
than ten years nor less than two, at the dis
erection OF the court. II there SHALL during
any year, be surplus arising from said tax
after paying all interest falling due on that
year. such surplus shall be used for the pur-
chase and retirement Of bonds authorized by
this act, said purchases to be made by the
said Board OF Liquidation from the lowest
offers, after due notice; provided. that the
total tax for interest and all other State pur-
poses, except the support OF public schools,
shall never hereafter exceed twelve and half
mills ON the dollar. The interest tax afore-
said shall be continuing annual tax until
the said consolidated bonds shall be paid or
redeemed, principal and interest; and the
said appropriation shall be continuing an
nual appropriation during the same period.
and this levy and appropriation shall author
ize and make 1t the duty Of the Auditor and
Treasurer and the said Board, respectively, to
collect said tax annually, and pay said inter-
est, and redeem the said bonds, until the same
shall be fully discharged"
The statute was accompanied with consti-
tutional amendments, limiting the debt to
s150o0,00o, making its provisions part OF
the constitution, and providing, THAT the
revenue OF each year derived from taxation
upon real, personal and mixed property, or
from licenses, shall be devoted solely to the
raised. excepting any surplus remaininQ.
which shall be directed to the sinking OF the |
public debt"
After the passage OF this law and the adop- |
ton OF the amendments connected with it. the
rate Of taxation was as follows: Interest and |
principal OF public debt, five and half mills. |
levees, three mills; general fund, four mills; |
schools, two mills. This fiscal arrangement |
had hardly been effected when It became OBJ |
vious that the provision OF five and half |
mills was Inadequate, upon the then basis Of |
and collections Hereunder. to /
provide promptly for the payment of the In
terest on the consolidated debt. It is a fact |
well known that after the General Assembly 1
Of 1874 had fixed the rate Of interest upon the /
bonds, and determined upon the precise
means and instrumentalities by which prin-
cipal and interest we're to be paid, the Board
Of Liquidation of the former administration
closed its doors, and ceased TO receive applica-
lions for funding, when It became evident
that the funded debt was becoming inconye-
niently large. and, in consequence Of that fact.
the prompt payment OF the interest on the
public debt was becoming problematical. The
former authorities, In default OF the perform
lnce OF the duties imposed by the statute OF
1874 threw upon the present Board OF Liquf-
lation the task OF funding the heavy EVIL
ienees OF debt left by them as a legacy to be
disposed OF by after administrations. Had
,he funding process been carried on promptly,
Ind all the outstanding bonds and warrants
been converted Immediately, the State would
lave found the collections from the tax Of five
md half mills inadeuIlata tn meet tho CON, |
BON falling due on the first day OF January,
S75, after the funding plan went into opera
ion Even with the advantage Of collections
made since the date Of the various coupons
rom the taxes of the years from which they
we're payable, there Is not single year since
874 which has not coupons OF interest unpaid
This increase OF deficiency results from the
arrying on Of the funding process.
When the present administration came into
'ower the Board Of Liquidation under It.