The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1879-05-23
INTER- CONVERTIBLE BONDS,

recently adopted by Georgia In the dispose
Of her new loan Of four millions OF dollars, Il
one to which we have already alluded, tina
the bonds would be at discount, and conse
quently would furnish a very inconvenlen
currency, whose circulation would be Limited
to the State.
This would probably be the case at first
but there is no reason why these securities o
/ the State of Louisiana should not In a yer,
short while become quite as valuable and a!
eagerly sought after as those Of Georgia
Whatever may be the basis Of adjustment
1t Ia to be hoped that the settlement Of til,
State debt arrived at by the Convention vii
be regarded az final one, and that It vii
be recognized and Its payment. princlpa
and interest, solemnly assured by al
classes of the people. It may be taker
for granted that no basis of settlement will b,
adopted by the Convention which the State
shall not be able TO carry out to the letter
| Everything that is done will be agreed upor
only after the fullest and most exhaustive LII
vestigatlon of the resources of the State. The
full sum Of her taxable values will be ascer
tanned, and the amount Of taxation that car
be imposed, and that will most probably
be collected and become available fol
this purpose, will be made to ap
pear upon the most satisfactory eyi.
dence. The governmental establishment
will be perfected and its current expenses ap-
proximated, and finally a new and compre-
| hensive system OF assessment and taxation
under which an efficient anu unamblguous
| revenue law can be constructed, will be sup
piled When all Or this shall have been done
and the basis Of the debt agreed upon, and
provided 1t be q just and equitable one
placed beyond all cavil and opposition, there
ID every reason to believe that the State credit
will Immediately revive In all the money
markets of the world and her bonds be con
sidered as safe investments as any public Sc
curities In the country. If this is not accom-
plished by the Convention, the people will
have just cause for disappointment. We
have not the slightest doubt that IL can and
will be done.
There can be no question but that the plan
of issuing currency bonds suggested BY us
would very greatly contribute to this result.
It's first and most important effect would be
to diffuse the debt among our own people,
thus realizing the twofold benefit. OF keeping
the interest at home instead of sending 1t
abroad to pay foreign bondhoIders. and of
making Of every holder OF dollars worth OF
these securities an Intelligent. because an In
terested, VOTER having at heart the protection
of the honor and welfare of the State. It is
believed that the larger proportion Of the debt
is now held by the people Of the State, which
would render this arrangement all the more
beneficial and make that fact no longer q
misfortune.
In order to render this plan more feasible,
and to impart q greater hexibility to this issue
Of bonds, IL would probably be better to make
them inter-convertible, instead of fixing abso-
lutely the proportions Of the debt that shall be
issued in bonds OF different denominations,
which would not be practicable. For exam
pie, let the bonds be printed In form and OF a
size convenient for USE the highest denomina-
tion fixed at one thousand and the lowest at
five dollars, and permit the holder to convert
his bond or bonds into whatever denomna-
lion he chooses, and to reconvert at will from
lower to higher. and uice persa The holder
for the sake OF investment will desire bonds
Of the larger denominations, while the trades
man who may have come into possession Of q
large bond, instead OF being able to use 1t only
as security on which to borrow money. for
which he will have to pay interest can con-
vert his bond into others of more available
In this manner the debt will be in a meas
nre popularized, and will be, more nearly
than In any other shape, assimiated to that
character of public Indebtedness which some
shallow economists have pronounced bless
ng, simply because it affords a ready and
safe means OF investment for limited num-
Der OF individuals, to pay the interest on
whose bonds the whole community endures
iaxation. Without going to the extent Of
lending our approval to this last proposi
Ion, it must be apparent to all that
,he State debt can by this plan be made a
great convenience, and 1t is very certain that
70 long as there are moneyed persons who
vii buy these bonds, without any considera-
Die reductions, there Is sure test that the
lebt Is not beyond the capacity of the State.
y Will afford safe investment, with mode
ate interest, for small capitalists and the
rugal poor, who will thus be enabled to nut
lside their dimes without entrusting them to
hS pi0S'Alou5 VI vi savings Dankg,
still more important result of this plan
would be the opportunity 1t would afford Tor
ne re-establishment of the free banks, with a |
Medium OF exchange which would be exempt
rom the 10 per cent tax imposed on State
'ank circulation. The restoration OF the free
'anking system would exert a beneficial in
luence on the commerce of New Orleans
which can hardly be estimated. It would 90
urther than any other conceivable circum-
lance 20 restore her lost commercial suprem-
cy, and make her again the money centre of
he whole Southwest 1t would place her In
recisely the same attitude towards this vast
I'd opulent region which she formerly held
no which the financial policy Of the general
overnment has made New York to assume
owards the whole country.
lt must De remembered that the basis of
ne State bank issue was chiefly, by law,
tate and city securities. We see no reason
ny they cannot operate as successfully I'M
ar this SyStam whan State oradit shall