The Nonpartisan Leader Newspaper, June 21, 1917, Page 8

SR o~ ] here the Sky is the Limit How Louisiana Financed Its State-Owned Grain Elev_ator and Cotton Warehouse, and About the Publicly Owned Terminal Railway Handling cotton in the big state-owned warehouse at New Orleans. BY OLlVE-R S. MORRIS HE sky's the limit” when it comes to state-ownér- ship in Louisiana. That people’ of Louisiana have authorized the issuance of bonds in UNLIMITED amounts for the erection of state-owned terminal facilities at New Orleans. The state commission in charge of the New Orleans terminal facilities can issue as many bonds as in its judgment are needed to develop the terminals. This means unlimited money for state-owned warehouses, elevators, ete. If you are familiar with what the recent farmer legislature in North Dakota tried to do, this “sky’s-the- limit” proposition will interest you. You remember the farmers wanted the people to vote on a new consti- tution (House Bill 44), which allowed the state to guarantee bonds for state elevators, warehouses, mills and packing plants. These bonds were to be redeemed by the profits of the state projects. ‘Then you remember the howl that went up from the gang papers and politicians and the big interests. “You haven’t put any limit on the bonds that can be issued,” yelled these gentlemen. “SKY'S THE LIMIT", SAID THE INTERESTS Then they invented the phrase, “The sky’s the limit.” They used that phrase to scare the people out of authorizing state ownership without setting some limit on the bonds that could be issued. They weren't interested, really, in the fact that there was no specified limit, They didn’t want any bonds issued at all—limit or no limit. That was really their trouble. So they stood on their left ears, kicked their legs frantically in the air and vociferated something about the sky being the limit. Well, that sounded pretty good till the farmers came back at these gentle- men and showed that no bonds could be issued without the legislature or a vote of the people authorized them. And if the legislature authorized them, their act was subject to refer- endum. So the people got a vote on it anyway. It was merely a matter of letting the people rule, and the far- is to say, the legislature and, . erect and Here’s thé case of a state where the of public ownership of terminals. : port commission to spend all that i Louisiana considered it good business policy to authorize $25,000,000 in bonds in one lump for development of public terminals—grain elevators, warehouses, etc.—although only a fraction of that is needed at present. The rest will be there, however, when needed. That's how stingy Louisiana is when it comes to fur- nishing the wherewithal to drive out private monopoly and eliminate the toll-takers at the gate. mers didn't fear the people, but some other gentry did. So that phrase, “the sky’s the limit,” became historic. DAKOTA PLAN MILD BESIDE OF THIS ONE So far as the sky being the limit on state ownership is concerned, the pol- icy the farmers of North Dakota wanted to adopt is very mild and con- servative beside that the people of Louisiana have adopted. Louisiana has placed the authority to issue UN- LIMITED bonds for state-owned proj- ects in the hands of five men ap- pointed by the governor. No propo- gition there of the legislature elected by the people, subject to referendum, having a say about it. No direct re- sponsibility to the people at all. Just the say of five men appointed by -the governor. If the conservatives and re- actionaries threw fits over the North Dakota proposition, ‘they would have blown up entirely if the farmers had sprung the Louisiana plan on them. They never would have stopped run- ning in circles and “the sky’s the limit” would have been a mild slogan’ compared to . what they would have invented. Feb s e Louisiana did it in “Act No. 133” of the acts of the Louisiana legislature of 1910. This is a joint resolution, Section 1 of which provides that “the board of commissioners of the Port of New Orleans is hereby authorized to operate warehouses and other structures necessary to the com- merce of the Port of New Orleans, and s needed for state-owned gr wharves and other terminal facilities. to pay for same by issuing -mortgages ° and bonds.” : iz % This act was voted on and adopted by the people at the election in No- vember, 1910. Not a word in it about any limit on the bonds except the sky. The commission is authorized to do anything “necessary” to develop the terminals and to pay for it in mortgages or bonds. Other parts of the act provide that the revenues of the state-owned enterprises shall pay interest and principal of the bonds, and that the property of the state- owned plants shall be pledged as se- curity for the mortgages or bonds. The general constitution and.laws of the state, however, make the state as a whole responsible for and liable for the indebtedness, if the revenues fail to provide for it. It is really a blanket authorization for state-guaranteed bonds in unlimited amounts for de- velopment of state-owned terminals at New Orleans. “SURE, WHY NOT?” SAID THE- PEOPLE The legislature and people of Loui- siana had hitherto ‘authorized bond is- sues for.the development of the ter- minal ‘facilities at New Orleans. Each time the people had to vote on each separate project and authorize the bonds for it. This was needless, in the opinion “of * those - backing ‘the state projects and engaged in-administering them. Why not get a blanket authori- zation” for “everything necessary, now ‘or o the future, saving time - and people were not afrald to make “the sky the limit” in the case The people of Louisiana han empowered the New Orleans ain elevators, cotton warehouses, 'PAGE PIGHT The state is about to double the present storage facilities of this warehouse. trouble every time the port commis=- sion wanted to do something? Sure, why not? said the people, and they passed the act of 1910. With this authorization in their hands, the port commissioners decided not to be pikers either. They only needed three or four million to build a cotton warehouse, so they issued bonds for it. Later, however, they fig- ured it was foolish to issue bonds only for immediate projects. Why not pro- vide for a big amount of bonds all at once, take all the legal steps neces- sary and simply float a few million every now and then, as the develop- ment of the port proceeded? So the commission, under its blanket author- ity, provided for an issue of $25,000,000, all in a lump. They made arrangements with the financial powers -that be to market this big issue. Now, when they need money, they simply call up their bank. : - “Say, sell a couple of million dol« lars worth of bonds for us,” they say, and the bank does it, out of the $25,= 000,000 provided for-by the board une- der . the blanket authority of the people. . Only a few million of this $25,000,000 bas actually been floated so far, and it may be 10 or 20 years before it all is. Out of it the commission built the state-owned and operated grain ele- vator and is now doubling the capacity of the elevator and doubling the ‘ca- pacity of the state-owned cotton ware- house. JUST GOOD BUSINESS; NO “HOLLER” AT ALL And the big thing about all this is that nobody has set up a “holler”. True, - there was some opposition at the start about the original issue of bonds for the cotton warehouse, but when that proved such a success it died down. The people of Louisiana take it as a matter of course that the port commission has provided, by its $25,000,000 issue of bonds, for the needs of the New Orleans terminals 'for the next 10 years or so. They look on it as good business methods. The result has been that when the commissioners wanted to add to the grain elevator and increase the-size of - the cotton warehouse, they did not have to issue separate issues of bonds. They just called up the bank and sold some { | | |