The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-01-22

holders have, Of scourse, seconded their ef
forts, vet, the interest remains unpaid and
no practicable plan has been suggested by
which 1t can be paid.
This is q very sad state Of affairs. No mar
wants to repudiate the honest debt Of the
State, and none want to pay the fraudulent
debt. But what is to be done The tax Of
five and one-half mills on the dollar Is not
lected, and the people have not been able to
pay that tag. Shall the taxes be increased !
II the people could not pay five and one-hall
mills they could not pay a greater rate q
taxation. 1t is true the fever plague which
swept over our country last summer caused a
great loss to our citizens, and Is reason why
our delinquent rolls are greater than usual
but we understand that IL all the tax was col
lected 1t would not yield sufficient revenue to
pay the interest
During Radical supremacy In this State an
enormous fraudulent debt was saddled upon
the people OF Louisiana, a debt which every
thinking man knew could not be paid. Ana,
finally, during Kelloggs administration the
present funding scheme WAS devised, the con-
stitutiOn was amended 50 as to authorize the
system and a board Of liquidation was Gre
ated. This board funded portion OF the debt
sufficient to more than cover the revenue that
would arise from the five and one-half mill
tax, and they then stopped funding the debt,
fundable debt. II they had done this the
crash of the State credit would have come
long ago. AS 1t was there was adeficiency
achyear and the int Fest could not be met.
When the Nichols board of liquidation be-
gan operations they found large amount OF
the debt not funded. They did their duty by
funding the debt under the law, and the sum
OF the interest was increased; this Is our I'M
Outstanding OF the situation, and we do not
know that the debt has all been funded yet.
has been created by scaling the old debt and
funding it-honest and fraudulent debt alike
In new bonds at sixty cents on the dollar.
Inc new bonds bearing 7 per cent interest;
ana this Is the interest which the State Is un-
able to pay.
These new bonds are now worth In the
market less than sixty-five cents on tire dol
lar, we are informed, and consequently do
not represent more than 65 per cent of
their face value In actual wealth to the
holder. II this be true, would the bondholder
suffer IL these bonds were replaced by others
giving the bondholder In new bonds 65
per cent of what he now holds, and making
the new bonds worth their face value2
Ii the present debt OF the State was funded
vt sixty-five cents on the dollar In bonds bear
ng 4 per cent interest the debt would be
reduced below $10,O0O,O0O, and the interest
would always be met promptly, with less
han half the tax now paid into the interest
und.
The interest on such a debt could not only
,e paid promptly, but the debt itself could be
paid without difficulty as the bonds matured.
Such a bond as this would, we think, be
worth its face value In the market. We see
10 reason why such bond would not be as
rood as United States per cent bond. Do
you call this repudiation2 II to give the
,ondholder what is worth as much as that
which he now holds Is reputation, then this |
8 Reputation; otherwise, in our opinion, 1t Is
lot We think the new bonds would be worth
V much In money as the old ones now are.
The interest would be less, but it could and
would be paid, while the present rate OF inter-
,st will not and cannot be paid.
The time has come when some action must
% taken In regard to the State debt, and it is
veil for the people to begin to consider what
hat action will be.
We do not pretend that the plan we have
Is the best one that could be devised, |
Tor do we pretend to be an expert in State |
inances, but we have formulated these ideas |
n the hope that some one, equal to the task,
will present plan by which our State can be |
from her present financial troubles |