St. Landry democrat., 1879-06-14

IA Of consols, for which the State has
received in cash S6,S93, ,507 81, or within
$401 1855 50 of the face value OF the
bonns.
These S7,294,744 of consols, together
with the bonds issued prior to the war,
exclusive of the bonds delivered to the
Citizens Bank and the Consolidated
Association will make.the State debt S1O,,,
49,, IA, exclusive of the warrants funded
which exceed in amount SS00,OO0. lhe
State bonds issued prior to the war and
included in the above estimate, amount
to S3, ,1S3, 900, to wit s47G,000 issued to
the Nashville Railroad Company, $3.50,
OOO issued in 1868 for the relief of the
State treasury, 1884 1000 issued to the
jackson Railroad Company, SG50000
issued to the Opclousas Railroad Com
nany, S130,O00 issued to the Baton Rouge
| and Crosse Tete Railroad Compay, and
$3.50. 900 issued to the Nicksburg, Shreye-
port and Texas Railroad Company.
The validity OF these bonds was never
questioned until now ; t7ey were made
| the basis on which the free banks We're
authorized to issue circulating notes ny
the twelfth section OF the act OF 1900,
| No. 1866, relative to free banking the
State invested large amounts IN them
| for the school fund they escaped the
|
of 1875, and the reasons assigned by the
committee for their invalldlty cannot
! be sustained.
The committee are Of opinion that the
ways and means which the Legislature
provided for the payment of the bonds
| having failed, the obligation to pay Is
extinguiShed. The duty imposed on
the Legislature by article 3of the con-
stitution of 1852, is construed into 4 con
tract between the State and its creditors,
whereby the obligation of the State Is
confined to payment out OF the means
provided by the act creating the dent.
The extent Of the means provlded Is
construed to be the measure OF obligation
This confounds the resources OF the
debtor, set apart rs security for the pay
ment OF debt, with the obligation re-
sulting from the contract by which the
debt is created. A security is thus
converted into a limitation OF the oo-
legation.
This doctrine was held to be inadmis
sible in the case of Morris Ranger vs..
the City of New Orleans, recently de
cided by the Supreme Court OF the
United States.
In that case the law provided that 5he
railroad company should issue to the
city certificates of stock for an amount
equal to the amount of bonds received
and " that the stock shonld remain for
ever pledged for the redemption OF sald
bonds.n
The city contended that as the stock
and its revenues were the only means
provided for the payment OF bonds
there was no liability to pay beyond the
wise, and added :" 1t comes with bad
grace from the city, not to say evinces
an insensibiiity to its obligations tt
allege exemption from liability after it
authorities have sold the stock ant
diverted the proceeds to other uses.'
The State has also sold its railroat
stocks, and diverted the proceeds o.
sale to other uses than the payment O
it's bonds issued to railroads.
The undersigned have entered into tlli:
discussion merely to remove the impres
sion which seems to have taken posses
sion of the minds of some, that ttt
eleven and half millions OF consol;
now constituting the debt of the State
represent no legal obligations OF the
State, and are based on no valid con
sideration. But the funding act of 1874
and the cOntemporaneous constitutions
, amendment, created atribunaI to deter
mine the validiaty Of the obligation:
rendered in exchange for consols, ant
authorized the crediter to the courts il
ease the Funding Board rejected hi
claim.
Subsequently the authority of it
Funding Board was restricted by til.
supplemental funding act of 1875, which
prohibited the funding OF certain classe
of bonds until their validity was es
tabished by a decree of the Suprem,
, Court. The bonds mentioned in salt
supplemental act constituted about one
half of the State debt.
Hence the outstanding consols repre-
sent bonds adjudicated by the Fundin:
Board or the Supreme Court to be valit
Obligations Of the State.
This adjudication is conclusive on tht
State. Hence the Supreme Court
through Chief Justice Manning, as it
organ, in May, 1873, said: We regart
the faith of the State as irrevocabl,
pledged to the payment of her consoli
dated bonds issued under the authority
, of that act QS74,) and to the paymen
of such other bonds as may be issuet
under the sanction of the decree ".
shall make herein. The contract will
,, the holders of these bonds is one which
, in the language of the constitutional
amendment, the State can by no mean!
f and in no wise impair" State eX rel
Pacific Railroad VS.. Nichols, Governor
, 80 A. 986.
In the same case, page 9s1, the court
) say, the funding act was approved Jan
| uary "a, 1874, and on the same day al
; amendment to the constitution was ap
, proved. "This amendment has become
{ a part of bie constitution by its subse
quent ratification by the voters at th'
) polls
The Supreme Court of the State lat
: already decided in July, 1875, that tlii
amendment was adopted, and it nov
, forms part of the organic law of thu
, State 81 A. $40. Forstali's case.0
The Supreme Court of the Unitet
States in the oase Of McComb VS.. Boart
of Liquidation says: q On the day o
passing this act (spea!sing Of the fundins
act of 1915 the General Assembly passet
another act, proposing to the people O.
. the State an amendment to the constltu
{ tion Of the State, which was adopted a
the ensuing election"
, This case was decided in October tern
, 1875, 2 Otto, 531.
The Nichols General Assembly, or
!, the twelfth of March, 1877, passed ar
act the title of which is as follows al
act to enforce eifectnlly the constitu
tional amendments proposed January
"a, 1874. ratified at the general eieetiDy
held on the second Of November, 1874
relative to the State debtand the funding
thereof: to protect the interests of tllt
stateand the holders of the bonds issue(
by virtue Of said amendments for tina
purpose to amend and re-enact an act
IS No. 3, approved the twenty -fourtl
| of January, 1874, etc. ~ =
, This act is No. So of the regular ses
sion OF 1877, approved by Gov. Nichols
the first section of which provides /" thai
act No. 3, approved the twenty -fourtl