The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-06-02

the bonds issued prior to the war, exclusive 9
the bonds delivered to the Citizens Banl
and the Consolidated Association, will MAX
| the State debt $lg,432,744, exclusive OF ths
warrants funded, which exceed In amoun
$780, 600. The State bonds issued prior to th.
amount TO ss,1ss,eoo, to wit s47apoo isauet
to the Nashville Railroad Company. $3.50, ,00t
issued in 1863 for the relief OF the State treas
ury, 1854 600 issued TO the jackson Railroad
Company, $s50,000 issued to the Opelousas
Baton Rouge and Crosse Tete Railroad Com
1 pany, and $25O,00O issued to the Vicksburg
Shreveport and Texas Railroad Company.
The. validity. OF these bonds was never
questioned until now; they. were made the
basis on which the free banks were author.
tied to issue circulating notes by the twelfth
se0tiontof the act Of 1865. No. 166, relative tc
free banking; the State invested large
amounts Y them for the Is school fund; they
funding act of1875. and the reasons assigned
by the committee TOR their invalidity oannot
be sustained.
The committee are u opinion that the ways
for the payment Of the bonds having failed,
duty Imposed on the Legislature By article
9 OF the constitution Of 1859, Is construed into
Q contract between the State and it's creditors,
lined to payment out Of the means provided
by the act creating the debt The extent Of
the means provided Is construed to be the
measure ofobligation.
This confounds the resources of the debtor,
set apart as security for the payment of o
debt, with the obligation resulting from the
contract by which the debt is created. A secu-
mty is thus converted into a Limitation OF the
obligation. nj 5
II the case Of Morris Ranger vs. the City Of
New Orleans, recently decided by the 6l-
preme Court OF the United tates.
I1 that case the law provided that the rail-
road company should Issue to the city certif-
Gates of stock for an amount equal to the
amount OF bonds received, and that the
stock should remain forever pledged for the
redemption Of said bonds
Inc city cOntended that az the stock and its
revenues I were the only means provided for
Ivy to pay beyond the means provided. The
court held otherwise and added: I'll comes
with bad grace from the city, not to say
eYinces Vince ~ lnsensibiity to its obligations to
authorities have sold the stock and diverted
the proceeds to other uses.' - -
Inc State has also sold Its railroad stocks,
and diverted the proceeds OF sale to other
uses than the payment Of It's bonds issued to
railroads.
The undersigned have entered into this dis
cussion merely to remove the Impression
which seems to have taken possession OF the
minds OF some, that the eleven and half
mli.lons 4 on " o. consols now constituting the
debt OF the State represent no legal obliga-
lions Of the State and are based on no valid
consideration. But the funding act of 1874,
and the contemporaneOus constitutional
amendment, created o tribunal to determine
he validity OF the obligations rendered in
axcnange Tor consols,, and authorized the
,reditor to appeal to the courts, In case the
Funding Board rejected his claim.
subsequently, the authority OF the Fund
ng Board was restricted BY the supplement
,al funding, act of 1875, which prohibited the
unding of certain classes Of bonds until
heir validity was established BY d decree
y the Supreme Court. The bonds mentioned I
q said supplemental act constituted about |
Of the State debt.
! Hence the outstanding consOIs represent /
'onds adjudicated BY the Funding Board or
he Supreme Court to be valid obligations OF
This adjudication is conclusive on the
,hief Justice Manning, as its organ. In May,
s788, said: "We regard the faith of the State
8 trrevocably pledged to the payment OF her
lidated bonds issued under the authority I
that act 1874, and to the payment OF such
ther bonds as may be issued under the sane
ion of the decree we shall make herein. The
ontract with the holders of these bonds Is
ne which, In the language OF the constitu-
onal amendment. the State can by no means
nd IN no wise impair" State ex rel. Pacific
fAhihC00 VS. ANAOlOllbs 0ONSI4Oly OU IA IoDs Il
La the same case, page 9s1, the court say,
le funding act was approved January "a,
IA, and on the same day an amendment to
le constitution was approved. "This amend-
tent has become part Of the constitution
Y it's subsequent ratification by the voters at
10 polls"
''The Supreme Court of the State had al
lady decided in July, 1876, that this amend
ent was adopted, and 1t now forms part Of
V organic iaw Of the State ~ a. 579,
orstall's case"
The Supreme Court Of the United States in
y case OF McComb We. Board of Liquidation
W: ION the day OF passing this act (speak-
9 Of the funding act Of 1874 the General
g people OF the State an amendment to the !
institution OF the State, which was adopted !
the ensuing election" $ $
This case was decided In October term 1875. !
Otto, 531. !
The Nichols General Assembly, on the !
selfth OF March, 1877, passed an act the title s
which Is as follows: Gan act to enforce !
fectually the constitutional amendments ].
opposed January "a, 1874, ratified at the :
,neral election held on the second of No 3
g funding thereof; to protect the interests i
the State and the holders Of the bonds = =
sued by virtue OF said amendments; for = =
at purpose to amend and re-enact an act, s
= No. 3, approved the twenty fourth OF =
This act Is No. 50 of the regular session Of =
n, approved by Gov. Nichols, the first Sec I
IN of which provides "that act No. 8. ap- :
owed the twenty fourth OF January, 1874, !, :
ges SO to AZ inclusive, statutes OF 1874, 1
mmOnly known as the funding bill, enti- I
u an act, etc, be and the same is :,
reby amended and re-enacted as follows,
d" @s !
Under these circumstances the undersigned =
yer conceived 1t possible that any one would ! J
dertake to assatl the validity OF the bonds :
'ued In pursuance Of the provisions OF the 7
OF 1874 and the constitutional amendment :,
mmittee. 9 9
All departments Of the State government d
d recognized the binding force Of the fund Il
: act and the constitutional amendment en- Il
rcing it. The Supreme Court OF the State u
two occasions and the Supreme Court of