The morning star and Catholic messenger., 1879-02-02
(Communioated.)
Repudiation or Compromise.

the MORNING STAR goes to press. the Lsgisis-
ture will have only few hours to sit before
sdiourning slne dis, aud will have omitted to
adopt any bill for remodeliing the Faaded
Debt of New Orleans, and that therefore the
Premium Bond Plan will continue to Is opera
tive for ct least another year.
In the consultations held in Mayor Patton's
psrlor, two principal propositions were dis
oussed. One, presented by the Mayor himself,
is to scale the debt at forty per cent. in bonds
bearing four per cent interest. Tue other, pre-
sented by distinguished fasnoisrs and bond
holders, is to issue new bonds for the whole
debt. at par, payable in fifty years, with inter
est at two aud half per cent during tan years
and at three per cent during the remainder Of
the time.
The Bonded Dsbt now amounts to alb out
S16 ZOO, 900 and besides this the city owes q
large floating debt which abe cannot pay
out of current income. If the Mayors plan of
scaling were adopted, it would reduce the debt
to 81 100000.
This would require annual taxation during
fifty years, as follows:
To provide for the principal. pal.-..-.-..st44 o20
10 pay interest coupons..-.-.--.. 2ss sOOO-si3!OO0
If the other plan were carried out, it would
require during ten years:
To provide for principal $3.50 900
To pay interest coupons..--.---- 45O,OUU-s3lOO OJO
and annually Afterwards
For principal. $3.50, 900
For coupons. 54J,00o-$9oo 600
As the principal of the bonds is made pay
able at the end of fifty years, bat as fftisth
must be raised every year, both plans ooatem-
plate that, instead of being consigned to accu.
ploka in oinE kh rlu
fftieth shall BIS used, as fast as collected, in
purchasing the bonds from those willing to sell
them, before m maturity, to the city at par or for
less.
By the Mayors plan, it will suffi 70 to raise
only 1892 900 annually to meet both principal
and interest bat by that of the foauciers
$3.50 900 or S540. 900 would be required to pay
the interest only-making z it necessary to raise
the additional sun of $500. 900 every year to
provide for paying the principal at maturity.
Thus the taxpayers and bondholders are ia
direct opposition for the Mayors plan ia that
of the Taxpayers; aud offers all they are willing
or able to pay.
True that By both plans t ne yearly parch ases
would not only red lcs the debt itself, bat each
of these reductions would lessen the amount
required to pay the einterest-ooupons. There is.
however, on this point, a material difference.
By the Taxpayers plau, t1ere would al ways be
after paying interest, sum left to buy bonds
with; but, by the fuanoers' plan, every dollar
that could be raised, by supportable taxation,
woul1 be absorbed by the interest portion of
the debit At the end, ths debt would b, about
the same ss it is to day. Four hundred and
fifty thousand dollars is the IN aximum which
= tho Of tkar
funded dabt, on a fair assessment oan possibly
bring.
Bat it is said that the value of property, in
this city, will rise. Increased prosperity, from
commerce aud manufactures, new buildings
ndinfax of population will, it is hoped make
property more valuable. Alas! is it reason.
able to expect this 30 long rs the whole value
is burdened by mortgage of $50 900 900,
which is equal to fourth or a third of
fair assessmentf Who will atari an enterprise
here aud expose his capital to such charge
Msnifestly the development of New Orleans
80 far as the value of it's taxed property or
fixed capital is concerned, will be insignif-
can't, If ths burden and the consequent tax
rate is not deminished, so as to leave . net
end sure income Of at least four per cent to
the enterprisers and landlords generally.
But the bondholders raise the cry of "repu-
diAtion."
They say they are willing to compromise or
compound by q reduction of the interest only.
This lie now Ave, six and ssven per cent; and
they are willing to take two and half for
few years and then three.
Clearly, in principle, a reduction of interest
is as much \ compromise" or "repudiation," !"
as would be . reduction of the debt itself. So
that, after all, the real question between the
parties is merely one of amount.
The Premium and other bonds were bought
by the present holders at an average of about
thirty three oentS on the dollar. Hence, If they
could collect interest in fall, they would get
fifteen, eighteen or .twenty-one per cent on
| their Investment. II only the interest is re-
duced to two and q half and three, but the face
of the bonds is maintained, they would get
seven aud half or nine per cont interest
aud this in presence of the fact that enormou.
amounts of capital are now seeking permanent
and safe investment iu this country OF foul pei
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