The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-06-14

peEIeeb WlGnOub references W 1iS g1uG 49,,
Pacific Railway Company vs.. Nichols, Gov
ernor, 80 A. 9s7J
The committee fall into grave error Of fact
when they assert that 100000 OF these bonds
were redeemed. The TRANSACTION ,a1 iS cnafae-
deposit Of 500, 900 in bonds OF the State with
the Treasurer, and Is legal1zed. ..s 80
These same bonds had, however, been
pledged to raise funds Tor the purposes ana
ends Of tie original act authorizing the issue
and realized In the aggregate the sum u
These bonds were sold under act No. 1913 OF
i 1863 (which also reeites the fact Of their having
been pledged
These acts show that the bonds were issued
to build levees; that they were issued to- con
tractors to facilitate their loan; that the State
thereafter made an advance OF Its notes In
furtheranea of the same object, as loan on
100000 of these bonds, that it pledged and
finally caused these to be sold to pay its own
notes.
4 There was then but one issue, in fact, OF
the 100000 of bonds, and as the payment ot
these was provided for in the originating act
they are not obnoxious to the objection adj
vaneed by the committee. Beside, the very
point raised by the committee was decided In
the case A. Ct. Cell vs.. Chiffon, % A. 225: "The
after they had once been back into the treasury
has been denied; but 1t seems to us that 1t the
4 Legislature had the power (which Is not de-
niec) to issue any bonds at all, 1t Is matter
Oh luulHGE6UCD WlhH SHS OIHeIS bIl6Hi W. DJ
ISSUED, whether they be bonds newly printed,
or whether they be her bonds Issued ut q for
mer date, and which have been returned to the
treasury and have not been cancelled
4 / might thus go on and show That eacn
series Of bonds was created by competent au-
thority, and that the payment thereof was
adequately provided for To refute the pre-
tense forI hold It to be nothing more, that
| the provisions contained In the acts creating
the obligations, whose disalowance the COM
mittee recommend Is inadequate within the
constitutional provision. 1t Is sufficient to
show that the COMMITTEES itself Is not governed
by 1T.
act No. 277 of 1868, is recommended; when
we turn to the provision made by that act
we discover that the Treasurer was directed
to transfer yearly $4,000 to q special fund,
etc For aught that appears this has never
been done; in any event. the provision Was
less than that made In references to other is
sues; as for instance that, securing pay
ment Of the $4,OD0,000 levee bonds, where
sales of swamp lands, the setting aside out
pay the semi-annnal interest due on the
bonds, then, ii insufficient, out OF the ord-
nary tax. authorizing the collection Of an ad-
ditional tax to meet the end In view, pro-
| visions surely much broader; yet payment OF
the one Is recommended, while In the same
breath the other Is dlsaltowed. Why this
discrimination? | am forced to the conclusion
that the committee have failed to give the
reason Ii any 1t have, for its action. dis
| like to believe that the action was predeter-
mined; that sufficient reason falling, pretext
merely was resorted to to arrive at conclu-
sions as unwarranted by law and equity as
they are disastrous to public good faith.
| When that is done Inconsistency 1S certain to
crop out, as 1t has.
| The committee Is pleased to say, In refer
ence to the planters consolidated bonds that
| the Supreme Court broadly states that Ii the
question raised In the case THAT OF State liza
| if4yt had Enuf f1u6 In fha1 ucn T,f LIKE
sier u Binder vs.. The Board Of Liquidation,
reported In 30 An. Gil, the decision ordering
the funding of the bonds held by the Consol-
dated Association would have been different"
more to the point, that Id the same volume,
at page 1851, In the case OF Forstall's Sons
vs.. The Board OF Liquidation, the court de-
cided that the arrest of funding these bonds,
itself, was an error, and the question Of the
| liability OF the State having Daen distinctly
| raised, indeed being the sole question In the
case, all that series Of bonds were ordered
funded upon the express ground "that the
| Stute ia the sole obiigOr.0
This decision, If we are to be guided by law,
as Interpreted by the highest judicial author
ity, is conclusive upon this series OF bonds, as
we'll as those issued to the Citizens Bank.
which the committee apparently class as
parallel.
Let me now call the attention OF the Con-
vention, for q moment to the consideration
which the State has received In money for its
bonded debt, and thus demonstrate that In
out regard as to whether Irregularities have
crept into the form OF Issuing her obligations
or not.
In report prepared by James d. Seguin,
which / find published in the Times OF June /,
1879, the correctness OF which has never been
questioned, SO far as am aware, draw the
conclusion that the State has received in
cash ,533 80 for Its outstanding debt;
which, when funded under the act of 1874
and It very nearly is that now-will be sl2,-
Taking into consideration, therefore, accu-
mulated interest, which formed q part OF the
volume OF debt prior to funding, it appears
that the State has actually received cash in
excess OF the amount she is now called on to
pay. Equitably and morally,no room for com
plant exists. 1t Is sufficient to add, that
while there are many outcrfes Of fraudulent
and illegal debts, the admission is made
distinguished. For few possibly fraudu-
lent bonds, it would be monstrous to disavow
all.
In 1874 the walls Of distress and Frustrated
Industries rose to heaven from all parts of
this luckless State as so many solemn pro-
tests against the extravagant government
then in existence. The adjustment of needless
offices, and reduction OF taxation, was loudly
demanded the State government awoke
slowly to the necessity of Offering some
measure of relief. The funding scheme was
the offspring Of that necessity. Acts Nos. 8
and of 1874, and act No. II of 1875, and
act No So OF 1877 We're the result.
An attentive consideration of the schemein-
volved in these acts will show that it In effect
contemplates the assent Of the State creditor
for its success, and invites his cooperation
by liberal and advantageous conditions Of
security as to capital and punctualty as to
payment OF interest. To the extent that 1t
won the creditors assent it was q success,
and that ascent relieved the scheme OF the
obnoxious imputation of reputation.
While. on one hand, it offered inducements
to the creditor, on the other 1t provided secu-
rity to the State against illegal issues, in that
1t provided q Board OF Liquidation composed
Of the highest State officers and heavy penal
ties against any member Of that board for
auditing and funding any illegal claim, and
finally q judicial inquiry into the validity of
any, contested claim; and on the seventeenth
OF May, 1875, by act No. II, certain bonds were
designated by name and series as questioned
and doubtful, and not to be funded until their
validity shall have been established by the