The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-01-28
PREMIUM BONDS.
LETTER TO TINE MArOR OF NEW on
LEANS rmOM HON. JOHN n.
LApITTE.

Hon. Isaac w. Patton. Mayor Of New Orleans.
Dear Sn-As citizen Of New Orleans hav
ing an Interest In the general welfare OF tn,
community, claim the privilege of address
Ing to you few remarks upon the financla
condition OF the city, and specially as regards
the proposed change In the premium bont
plan.
deem it unnecessary 10 adduce any argu
ments to prove that the credit Of every indi
vidual citizen Of State or city is more or less
affected by the credit of the city or State. es
pecialy If the loss of public credit be tar
nshed by any act Of bad faith. Communities
the same as individuals may become involved
| In debt beyond their ability to pay In olden
| times the unfortunate debtor and his family
became the property of the creditor, and he
and they were sold into slavery, Later on
this was modified, and the power Of the cred
itor was limited TO casting the debtor into
prison. Modern civilization has eliminated
this remnant Of barbarism from the statute
book. and places II within the power Of the
debtor to obtain legal discharge by the
surrender of all his worldly effects. There
liz. however, moral obligation which
attaches TO end follows the debtor, and which
can only be discharged by payment In full.
with interest. should he at any future
time be In position to do 90, With individ-
uas this acknowledgment of the moral obli-
CATION Is unfortunately too rare, but In the
case of communities 1t Is entirely impractl,,
cable. The individual debtor can seek for and
find his creditors, but public obligations pass
from hand to hand each bearing his share OF
the loss. so that 1t is practically impossible for
a city or State ever to make good such losses
to those by whom they were sustained. IL
follows that city or State should be all the
more reluctant TO compound or compromise
with their creditors, and such measures
should only be resorted TO when the result Of
the direst necessity, and. In any event. the
consent Of the creditor should first be OBJ
tanned.
What Is known as the premium bond plan
was adopted under circumstances that seemed
to warrant compromise between the city
and it's creditors, and 1t would be q waste of
words TO inquire at this late day. whether or
not II was the best plan that could have been
adopted. My own judgment was adverse to
that plan when first proposed and the low |
market price Of the bonds at the present
time would seem to justify that con-
cuson. It has become an accomplished |
fact, and has been, ! believe, accepted by q
large majority Of the creditors, save and
except such as conceived they had a
preference claim upon the city by vir..
tue Of special legislation. Of the nature OF
a contract. Any compromise Of this nature,
II about. and however just and equitable 1t
may be to the creditor greatly impairs the
credit of the city and affects adversely the
market value OF It's securities A second ar
or compromise would utterly de-
,troy every vestige OF credit, and the securi-
les would sink far below their real value.
rhe act of the Legislature creating the pre-
mum bonds declared In the most solemn
manner that 1t was contract between the
,ty and It's creditors; how can the sanetlty
,f atnh n np rnpt ha viplatpI xriihnut nntnf1. |
ny an utter loss OF credit How can the i'm
,utation OF bad faith be refuted? Perhaps IL
nay be said that the same dire necessity
which rendered the premium bond plan or
gain exists The all-important question,
hen, Is. Does such an absolute necessity
xist or does 1t not / shall endeavor to
how that 1t does not, and for the proof will
ely solely upon the act itself.
Section OF act No. 81, approved March 20,
S76 reads as follows:
sEc. 8. Be It further enacted. ETC.. That It shall
Q the duty Of the City Council In the month of
December OF eHeh year. or In the annual budget
adoped iaI me e. SUN, year, TO IN
rincipal and interest Of the premium bonds,
,geiher with premium included, In the several
,ieh year by the aforesaid ordinances and this
ct. Il shall be the duty OF the Council annually
, levy an aual and uniform tax on oil the "a.
le city. at d rate sufficient to provide the ,
mount included Ia the budget as aforesaid, ,
nd said tax SO levied shall constitute Q special
ay lnent of said bonds and interest on the said
comprised In said allotment. and the
ind so raised shall be- placed to the credit Of
d account to be called the premium bond &C. |
punt. and no money from said fund shall be l
aid out except on. the Joint authority of the I
aid tax to be raised shall be denominatsd 1,
10 premium bond tax, and shall be sepa- =.
aiely mentioned iu tho tax rolls and. 70.
operation OF the city Of New Orleans for ali
urposes. including general administration, 7
,bool. police, lighting, salary of officers. court
rent, including the sum to be raised to pay :
10 premium bonds, as above stated. cha .
ever. until the full. complete and fnal pay /.
rent Of the said premium bonds. exceed the =
ate OF one and one-half per centum on the !
ollar Of all the assessed value Of property
ty Of New Orleans: The above Limitation on !
10 taxable power OF tho corporationis hereby ,
eelared to be contract. not only with tho q
18th sll residents and tax payers of the said city.
D as to apthorize any holder of said premium I
onds. resident or taxpayer. to legally object to 9
mtted. IL being also n part OF the considera- I
on OF this contract that the city of New orleans
hall be incompetent to incur any debt or obli q
lis state. until he final payment and extinc- /,
on OF the premium bonds aforesaid" 1T
Section II further provides that Mt least {
TX OF one-half of per cent per anpum shall
9 specially set aside for the execution of the t
royisions of this act.
Section declares that ut shall be incompe- +
mt for any court to mandamus the officers {
the city to levy and collect any interest /
TX other than that provided in this act, or In '
ase OF such mandamus by receiver or c
herwise, to direct the levy and collection ON q
ny such tax"
Can anything be added to increase the I
)lemnity OF the contract made by this act |
etween the city Of New Orleans and the {
olders OF the premium bonds2 Could lam q
uage be used TO more clearly define the i'm !
erative duty of the Mayor and other officers |
, carry out It's provisions2
IL will be said that the act limits the total
TX to be levied for all purposes to
Z per centum per annum and that per
,ntum Of the assessed value OF all taxable
roperty Of this city Is the smallest sum that
Ill suffice to meet the absolute and indis- 4
ensabe expenses OF conducting the city gov t
that self-preservation being the
rst law OF nature, overriding all statu-
Try enactments, that sum must be u
stained to maintain the city government, ;
% the minimum Of one-half of ! per /