Year: 1879

LOUISIANA REPUDIATION.


In common with all the Southern States
FOR time under oarpet-bag rule after the
war, Louisiana is having trouble
over her bonded debt. A oonstjtu-
tional convention is now engaged
in framing a new organic law for the State,
and the question what to do with the debt
incurred during the period of extravaganza
and corruption is agitating the members
greatly. Two reports were presented on
Saturday from the committee having the
matter in charge, the majority being in favor
of the payment of the legally issued bonds,
and the reputation of those that were not
properly issued, and from the proceeds of
which the State derived no benefit. The
legal debt, they claim, amounts to but little
more than four millions Of dollars, while
that which was issued under the oarpet-bag
government, which was squandered and
stolen, amounts to several times that sum.
This latter it is proposed to repudiate. The
minority report, signed by but ono member
of the committee, characterizes the PROPOSE
ton to repudiate as astounding and unheard
Of After discussion Of the legal questions
involved in the proposed reputation of
the majority, it declares all moral and
legal obligations demand payment of the
debt. It shows the amount of money the
State has received rom the sale of her bonds
and notes from the action of the Nichols
legislature and the decision Of the supreme
court of the State to prove that the funding
debt of 1874 and the constitutional amend.
ment OF the same year are binding upon the
State. The report advises committee of
nine be appointed by the President to con-
fer with representatives OF bondholders with
a view to an honorable adjustment of the
debt question.


With only superficial knowledge of the
facts involved in this controversy, We are in
clined to agree with the latter view as the
more honorable and best calculated to pro-
tect and preserve the credit of the State.
It is generally far better for corporation to
pay some debts that we're illegally contracted
than to contest them. While the State is
sovereign to certain extent, and can pay OF
not as it shall please, greater loss
is likely to ensue from a re-
fusal to pay these unjust claims
than in meeting all on demand. It is still a
great hardship to the Taxpayers to be com
PEELED to pay for that which they never re-
ceived, and they are in a measure e1cusable
for desiring to avoid such burdens. Though
issued under the forms of law, the bonds in
question did the State no good. The pro.
ceeds were squandered in the most shameful
manner by the horde of rapacious thieves


who for so long plundered the common


wealth. But even under such circumstance


it will be the part of wisdom to pay rather


than repudiate, for capitalists have natura


prejudice against all that savors of repudia


tion. Not only would the credit Of the Stat'


suffer, but capital would he driven away o.


refuse to make investment in any of the in


dustries upon which SO much of prosperit,,


depends We therefore record the commit


tees report in favor of repudiating the deb


of Louisiana as unwise and short-sighted


If it is adopted by the convention and rati


fed by the people the bonds of the State vii


fall far below their present price in the mar


ket, and even those who hold the legally


issued bonds will suffer heavy loss. If tn
) time should come, too, when it will be neces
, sary for the State to borrow money, it wi
7 be found almost impossible to do SO, excef


at ruinous discount. Honesty is the be-


policy for States as we'll as for individual
and nothing will be lost by stretching poin
!, or two for the sake of maintaining the finar
cial credit of the State government.