The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-02-26
PUBLIC CREDIT,

| There are few subjects upon which so much
misrepresentation exists, and perhaps none in
regard to which ignorance is so dangerous, as
the nature and value Of public credit
Interested persons, constituting but small
portion OF the community. and their merce-
nary advocates are continually harping upon
the vital Importance Of preserving the public
credit, and, OF necessity, the disastrous con-
sequences to the people that would inevitably
| result were it destroyed or impaired
| They rest their case exclusively upon the
following dicta: 1. Private credit Is SO in
dissolubly associated with public credit that
all that affects the latter must necessarily
affect the former; and 2, capital will not re-
main or seek an investment from abroad in
a repudiating State, as every State must be
which does not maintain her edit"
These assertions, which cannot, even by
courtesy, be called reasons, ire relied upon
and considered to be conclus e in demon
strating the great advantages to society in
maintain ng public credit. Let us carefully
examine them.
The only utility of public lit is to en-
able the governmental official Il contract
public debt. A public debt is Inevitably fol-
lowed by increased taxation. Increased taxa
ton decreases the value OF property, bee tuse
the value Of property is measured by it's net
revenue, and, of consequence all that absorbs
or diminishes its revenue to that extent de-
creases its value.
Now, as an individuals credit is measured
by the value Of his property, it Is evident
that the exercise Of public credit must nee
essarily impair private credit, and Ii the tax
Is excessive, will effectually destroy it. The
chain of reasoning is complete. Public credit
means public debt. Public debt means in
creased taxation. Taxation decreases the
value of property, and to that extent de-
stroys credit, trade and business. Therefore
public credit, instead of sustaining private
credit, is directly antagonistic and destructive
OF 1t.
am almost ashamed to occupy your space
In proving the universally recognized axioms
of economic science, 70" it is an admitted
TRUTH to which there is no exception, that
public credit is public curse. as it is the pa
rent OF debt and forerunner Of exorbitant
taxation, the greatest evil that a government
can inftict upon people.
| will now review the second statement, in
which it Is assumed that q State which fails
to sustain its credit is repudiating State,
and that capital will flee from it. In advance
| wish it to be understood that do not at
least at present, advocate Reputation; but
let us not be frightened by bug-a-boo; as
the uncOmproniSing course OF the public
creditor may compel the people to resort to
reputation as the only practicable means of
emancipating themselves from financial
thraldom. 1t Is not only not true that CAPT.
tai will fail to seek investment in Louisiana
If it repudiates, but it Is the reverse OF truth
If reputation is followed by reduced and
low taxation, the only purpose OF reputation.
1t is an elementary axiom in economical
science, that in every territory not over
crowded with a dense population, ii favored
by soil even moderately fertile and eli
mate favorable to production, security OF
property-the almost exclusive object OF
government, will attract capital from abroad,
develop it at home induce immigration and
thus bring prosperity. Security OF property,
not so much from the aggressive acts OF the
vicious, but security from the exorbit ant eX-
actlons q q tax-imposing government, prln-
clpally to meet the demands OF the bond
holder, who necessarily clamor for a rigid
collection OF taxes, else the public credit will
De ruined. In every civilized community
properly IS secure II moderately taxed;
hence it has become a maxim that COVER
I ments are good or bad Just as they are taxed
little or much and that government is hest
which taxes least.
having demonstrated by priori reasoning
ulaG w obstruction OF public credit and re-
puuiaclol VIII ehectually conduce to the
prosperity OF the people, let us examine
whether actual experience confirms the de-
auctions OF reason. Mississippi is ranidlv
prospering, having been repudiating State
with no credit, and in consequences NV AMI
decreasing taxes Georgia has thrown off a
large portion OF her debt and cut down the
interest on the remainder, thus virtually re
pudiating much the greater part of her deht
has decreased and Is still decreasing her taxa,
ton, and is rapidly progressing In prosper1tu
1t will be observed that have carefully ali.
stained from all consideration of the moral
and legal aspects OF reputation, as it would
open 10 q new field Of discussion, upon which
at some future time, / would be pleased to