The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-06-02
MINORITY REPORT
- OF THE
Committee ON The State Debt.

Committee ON The State Debt.
Ed OF Louisiana:
The undersigned members OF the Committed
on the State Debt, having been unable to as
sent to the report of the committee consider
ittheir duty to submit the reasons for theil
dissent:
The startling results Of the report Of the
committee necessarily induce hesitation and
reluctance IN accepting the principles which
have guided the committee In reaching its
conclusions.
N The mind Is d8zed by the annulment ol
nearly twelve millions Of bonds by q stroke
Eof the pen: and, although in times of revolu-
tion, when the Imagination is superheated by
political excitement such an extraordinary
let may be accepted as the necessity Of the
cccasion, one cannot witness y IN the midst
of profound peace Without grave appreheR-
sions Of Its justice and proprlsty.
Doubtless some who approve the measure
are amazed at the moderation Of the commit
Zee, but the Undersigned do not believe d
majority Of this Convention are In accord
with the views expressed by the committee,
The committee have found that Of all the
bonds issued by the State, outstanding on the
first Of january, 1874, and which, according
10 u[lt COIluIieIGt amounted TO III.
ss7,5Oo, only a fraction thereof-to w.t.. $3,-
10000 legal; and they reject SIG, ,693, AT 30
Is Of no force, legal or moral.
OK the amount OF the debt found by the
committee to be legal, to wit: So, ,486 600, the
State is entitled to ST. ,529,5o0 to be CARRIED to
the credit OF the free school fund and the
seminary fund, leaving outstanding In the
hands OF third parties 215G,5 500. To whom
this S2,156, 800 is to be paid cannot be ascer-
tanned, as the bonds considered valid by the
hnx
on the dollar for consols, issued under the act
ol 1874, and the particular consols thus is-
sued II exchange tor these bonds cannot be
The result IS that the state owes itself
$780, 800 as trustee for the purposes Of edu-
cation, and 1t also owes to nameIes credlter
$2l56, 800.
How this unknown creditor Is to be ferret
ed out puts the imagination at fault, and
hence all that the Legislature can do Is to ad-
yertlse for him as ls done in the case of I'm
known heirs OF vacant SUGGESTIONS, and re-
tain the amount Of the debt in the treasury
until he appears, for 1t Is impossible to make
the exchanges proposed In the ordinance re-
ported by the committee, since the bonds re-
cognzed by the ordinance as valid and ex-
chargeable have been surrendered and can
celed by the owners who have accepted con- |
sols In lieu thereof.
What strikes the mind In contemplating the |
plan Of the committee is that the State is held |
as an inyt tstment OF the school funds, while |
the State is considered discharged from re- |
sponsibility for the same kind OF bonds when
purchased by individuals.
For Instance, the free school fund was par
tally invested In railroad bonds issued by the |
State prior to the war; the amount Of rail-
lIgad bonds thus purchased was $4O1 900, in
gluding $4,000 OF the bonds issued to the
Nashville Railroad Company. II third persons
xho invested in the same kind of bonds are to
hair
icrth By the committee, It seems 10 be just
that tle State and Its school fund should be
subjected to the same heroic treatment.
n Inc com mfttee In It's report completely dis
regards all moral and legal obligation on the
part Of the State to refund the consideration
received ~ by 1t for any OF the bonds declared to
be Illegal
The difference between fraudulent bond
and bond void for want of power to issue it
= well known, and Important consequences
fow from it.
Il q debt be contracted In fraud, and the
debtor receive no consideration for 1t, then
here is no legal or moral obligation on the
nrt of the debtor to respect his contract
but II State OF corporation Issues bond !
Y n. manner not authorized by the eonsti- !
tution Of the State or the law creating the
sogporation, though the bond may be void,
We obligation to restore the consideration
ngelved for 1t subsists. in law and equity.
"a the seof MeCracken VS.. San Francis !
~ ~ SdlLiUlHlIty IGtJ5ss u. O1Jy JHiGI
Held as the organ Of the court held. that AL y
though the ordinance nassefl Nv tha Cannon b
IOlnpil anthnri1in@ tha saia - " u IN raal M
ttA hplnnuner l., tsa oitv ~ Gan 7rara,san
Sss osg ~ - III, Inn ciIy ~ oan LanclsGu
NM xoiui yeJ tne oDleaUlon 70 restore WnaC
q. received was independent Of the
i iEsstahlng SLa lnig causes o1 tne city cnarter.
VA hae obligation to restore the price Of the
SAlo made, and which had been received bY |
Ascity. it was held arosa frnm fha nhiiun. t
esSaas Nv W 40 Justice TO restore what belongs to
Tss, " ssiss Which rests upon all persons natural
@M.li suliclai ana 10 the language OF the court &
nsmnsl Mmsy wei be doubted whether II would be =
M SissenI WI 1or the Legislature 70 exempt the =
sIt,,y ,aaay more than private individuals 1rom
iissslsy issS under circumstances OF this charac- q
H III,
Court of Appeals of New York in the case Of t.
Sa,s ~ v9elda 1en Bank VS.. Ontario Bank. III New y
asi ~ In that case bank Issued an flle- .
H. gdslSMncate " Mate proh1b1ted by the banking =
ssSsse dda9 was allowed TO recover back the con- !,
of I'M ss pald to the pank ana the lndorsee
c1vor t nulu ceftlHcate was neld enJlbied 20 re-
iSsoi euS CONSIDERATION received by the Dhnk !s