St. Tammany farmer. [volume] (Covington, La.) 1874-current, 1919-10-04
Letter Addressed to Thomp-
son Charges Inefficient
Management.
$12,OoO,OOO SPENT LESS
THAN TWO YEARS
Bonds Sold at 96 and De-
posts Drew No
Interest.

Dear Sir:-In your letter Of res
ignatio1 from the position of mem
Der of the Board Of Commissioners
of the Port of New Orleans you make
the assertion that my request was
prompte1 by political reasons. This
is purely an assumption on your part,
although innumerable complaints
have come to me to the effect that
your department had become thor
oughly Behrmanized and political
lied from top to bottom under your
administration. Though this was not
the basis Of my action, it might have
been sufficient grounds for a change
in the administration of the affairs
Of the port in order that the men
working under you might not feel
constrained by the pressure of the
City Machine in the exercise of their
free right of suffrage.
l thought it we'll to appoint new
board tor the reasons hereinbeloW
given, among many others that Will
follow later.
Told Him Canal Cost Wouldn't
Exceed $4,5OO,OOO.
About two years ago, when / was
touring the country districts of the
state in behalf of one of the Liberty
Loan Bond issues, you made prepara-
tions and completed the prelimi-
naries for the digging of an Indus
trial Canal from the Mississippi river
to Lake Pontchartrain. after Ques-
tioning the adyisability of undertak-
ing this uncertain enterprise l final
ly consented because of the united
demand for it in New Orleans and
because of your positive assurance
that it would cost only about three
and a half to four and a half mil
lion dollars, and bonds to the latter
amount were eventually issued by
you.
l trusted your judgment. You
ought to have thorough knowledge
of the Fort of New Orleans, its re-
quirem nts, and the probable cost
of the necessary improvements. After
your force had been working On the
canal for while, you surprised me
with announcement that you were
compelled to issue one and a half
million ($1, ,500,OOO) dollars more
bonds in aid of the enterprise, max
ing six million ($6,000,000) dollars
in all.
Called for $4,000, 900, More After
Getting $1,5OO,OOO More.
A further short period elapsed
and then you startled me pro-
foundly with declaration that
you would be compelled to is
sue six million ($6,OOO,OOO)
dollars more bonds ITO finish
and make good our obliga-
.tions," as you phrased it i'm your
report to the board.
| denurred to this huge eXpendi-
ture, and was astounded that such
a terrible mistake had been made in
the original undertaking. For sew
eral weeks l withheld my consent to
the issuance of the bonds. But,
trapped by your miscalculations,
what was | to do? With the work
stopped, six million dollars would
have been thrown into a ditch that
began nowhere and ended nowhere,
and disaster to the credit of the port
would have followed. Besides, thou
sands o. laboring men in the city of
New ORLEANS would have been
thrown out of employment at time
when the federal government was
calling upon me to help ameliorate
their condition. l was forced to
consent.
Funds Without Interest.
Then what did you do? You sold
The last bond issue of six million
6,O0O,0OO) dollars, plus two mil
lion $4,000, 0,000) dollars more that
was issued for warehouses, at 96c on
the dollar to certain banks in the
city of New Orleans, and entered in
to a further contract with these
banks whereby they received the.l
proceeds of the sale on deposit with
out interest for one year.
The four per cent discount allow
ed to the banks in this private sale
to three hundred twenty
thousand (s320,O00) dollars. This
loss, together with the loss Of at
least three per cent interest on a
large portion of the proceeds Of the
eight million ($s,000,0O0) dollar
bond issue for one year, netted a
total loss to the people Of the state
(for your board is a state board) to
the amount of at least five hundred
thousand {$5OO,000) dollars. You
argued to me strenuously that you
needed the money Immediately, be-
cause your funds were about ex-
haus ed, and it was necessary to hold
the la5or, and that, therefore, time
could rot be consumed in advertis-
ing for competitive bids for the
bonds.
Ought to Have Got Par and In
terest Too.
Shortly after this l discovered
that you ought to have received at
least par for the bonds and that you
ought to have received at least three /
per cent per annum interest on the
deposit rf the proceeds Of the sale.
l say this because almost imme-
diately following your bond sale and
under similar conditions, we, the
State Board of Liquidation, sold !