480 



LOUISIANA. 



No. 60 instructed members of Congress from 

 the State to procure the passage of an act 

 changing the law in relation to the election of 

 United States Senators to the sessions of the 

 General Assemblies next preceding the time 

 at which such Senators are to take their seats. 

 No. 61 requested the Senators and Represent- 

 atives of Louisiana in Congress to provide in 

 any act conferring upon any railroad company 

 all the rights, privileges, and franchises of any 

 defaulting railroad company, that any ~bona 

 fide settler upon any tract of public land so 

 forfeited and annulled be entitled to all the 

 rights of preemption, homestead, and purchase 

 to said tract that are assured to him by the pre- 

 emption laws of the United States. Act No. 

 71 provided for the payment of the officers, 

 schools, and charities of the State, and for the 

 payment of the interest upon its public debt. 

 An appropriation of $360,000 was made to 

 pay interest coupons on consolidated bonds 

 and interest on the new issue of State bonds 

 in July, 1880, and January, 1881 ; and a simi- 

 lar amount to extinguish this indebtedness in 

 July, 1881, and January, 1882. That part of 

 the new Constitution which referred to the 

 scaling of the debt was submitted as a separate 

 proposition to the people, and received a large 

 majority of votes. To pay the interest ac- 

 corded, the tax authorized and required is 

 three mills on the dollar. Bondholders at 

 their option may refund and receive the new 

 bonds, representing three-fourths of the face 

 value of the old bonds, and bearing four per 

 cent, interest from the date of refunding. If 

 all the old bonds were thus refunded, they 

 would amount to about $9,000,000, requiring 

 $360,000 per annum to meet the interest at 

 four per cent. As consols at the assembling 

 of the Legislature Avere selling below fifty 

 cents on the dollar, and refunding would offer 

 a six per cent, investment to purchasers of 

 bonds, it seemed probable that refunding 

 would become general, and the Legislature 

 acted upon the advice in the Governor's mes- 

 sage, "The only safe course is to assess the 

 whole three mills." 



The finances of Louisiana caused a painful 

 and urgent discussion in the Constitutional 

 Convention. The civil war occasioned a sub- 

 version of the conditions of property and labor 

 in the State. For some years there was an- 

 archy in the relations of capital and labor. 

 There were disorder, waste, and profusion in the 

 management of the Treasury. The State was 

 reduced to insolvency. In 1874 the last and 

 not the least guilty of these administrations 

 proposed a settlement. There was a funding 

 of bonded and floating debt, both being re- 

 duced forty per cent. The rate of interest is 

 seven per cent, per annum. A specified tax 

 was to be imposed, collected, and paid out for 

 interest. The bonded debt at this period was 

 $22,439,800. The disputed debt was $3,901,- 

 000. There was also a floating debt of $1,006,- 

 839. 



It must be borne in mind that the expendi- 

 tures which had caused this rapid growth of 

 indebtedness had not been made on public 

 works, which would enrich or embellish the 

 country. Roads, levees, the highways of com- 

 merce, even the public parks and gardens, 

 everything, great or small, connected with the 

 public welfare, was neglected, and the public 

 money, on what pretense soever it was wrung 

 from a ruined people, served the sole purpose 

 of enriching strangers. 



Besides the actual indebtedness above men- 

 tioned, there was authority to issue bonds to 

 corporations of different kinds, exceeding the 

 debt there stated. Nor did this statement em- 

 brace the bonds of the State loaned to property 

 banks, nearly half a century ago, amounting 

 now to some seven million dollars, which are 

 a claim upon the State. 



The Convention determined that the de- 

 mands upon the State arising from this debt 

 were beyond its ability to discharge, and it 

 fixed the interest at two per cent, for five 

 years; three per cent, for fifteen years; and 

 four per cent, for fourteen years, till the ma- 

 turity of the bond. One installment of inter- 

 est was pretermitted. A tax was imposed to 

 meet this changed condition of the consoli- 

 dated debt. 



At this date the amount of the consolidated 

 bonds is $11,531,000; the disputed debt re- 

 mains $3,901,000, with an addition of about 

 fifty per cent, for interest. The bonds loaned 

 to the property banks will become a burden 

 to the State for some four or five million dol- 

 lars, it being understood that the banks are 

 able only to redeem a portion of the sum 

 due. 



The debt of New Orleans is greater than the 

 State debt, and its government is more costly. 

 Five eighths of the burden of State taxation is 

 borne by the city. The debt of the city mostly 

 concerns its citizens, and any plan for its settle- 

 ment must be submitted to them for approval. 

 The Convention remitted to the Legislature 

 the whole question of the city debt. The Gov- 

 ernor in his message counseled the establish- 

 ment of a syndicate to acquire the outstanding 

 city bonds at their current market value. The 

 syndicate might by refunding, or in some way, 

 bring the interest within the compass of the 

 two-mills tax. A change in the city charter 

 in the interest of retrenchment was also pro- 

 posed. Accordingly, Act No. 133 was passed 

 by the Legislature " to liquidate the indebted- 

 ness of the city of New Orleans, and to apply 

 its assets to the satisfaction thereof; to create 

 a Board of Liquidation and prescribe their du- 

 ties ; and to provide for a fiscal agent and for 

 the levying of a sufficient tax to pay said in- 

 terest." It created a syndicate -of six citizens 

 to form a permanent "Board of Liquidation," 

 with control of all matters relating to the 

 bonded debt of New Orleans, and having pow- 

 er to issue bonds, signed by the mayor and 

 Administrators of Accounts and of Finances, 



