Nashville union and American. [volume] (Nashville, Tenn.) 1853-1862, 1860-01-11
- on nanslug PrIvIleges.


leges granted in the charter. the bank should pay
one half Of one per cent annually on the amount Of
the capital stock paid in In 1896. tax laid on
the capital stock, Of which s27OOOO was owned IN
the State and sI50O 900 owned by nonresident.
The bank refused to pay the tax. Suit was brought
BY YERGEs, Attorney General for the State. against
the bank for the amount Of the increased tax. The
Supreme Court said that the bonus or annual tax
agreed to be paid, made contract, and that the
charter was therefore contract for all the privi
leges contained in the charter, Of which could
be altered but that the $4,000 owned in the State
could be taxed as stock the 81 600 owned out of
the State could not be taxed as stock.
This decision was made so long ago as 1883 and,
though made after the adoption of the amended con-
stitution it was declared that the provisions Of the
amended constitution would have no effect on the
charter as it was enacted before its adoption How
far the provisions Of the present constitution bear
on charters created since its adoption is different
matter worthy to be considered.
Since this decision was made in 1885, the Supreme
Courts of New Hampshire and of Ohio have both
decided that the taxing power was not 'the proper
subject matter Of contract and cOald not, there
fore, be alienated in perpetuity or for term Of
years.
A bill is now pending before the general assembly
which proposes to make a contract to bind up the
taxing power as to all the monopolies which the
Legislature may charter this session, for the term Of
een years, and to obligate the State Of Tennessee
not to increase the tax on them for that time Al
though protests Of endorsements Of railroad bonds
wars or instructions may require the tax to be
uuadrupled on land, slaves, money without charter
ed privileges, and on everything else, chartered mo-
ney. if owned out Of the State, cannot be reached
as other money is reached although it be in fact in
the State, and heavy profits be made by its use in
the State, which are annually removed from the
State by its owners.
The exemption of chartered money from increased
taxation to which all other money the State is sub
ject whether privileged unprivilegod is so gross
a departure from common justice in the exercise of
the taxing power as to deserve some little thought as
to whether it can and ought to be done in any case
whatever
The Supreme Court of the United States declared
that when nothing was said about taxes, or bonus
in a bank charter, the legislative power was unim-
paired and the power to tax remained amongst the
general powers of the Legislature to raise rev
enue, from time to time, as the pablo exigeneies
might demand Therefore, it is that it Is proper to
strike out every thing in bank charters on the sub
ject of taxation, and leave them as every other
description of property is, subject to the general
revenre powers of the Legislature. This is the
more necessary as this bonus operates not I'M
frequently like an artful and concealed contrivance
to entrap legislative bodies into binding contracts in
regard all the stipulations in the charter, which
such legislative bodies did not intend to make [See
I6 Howl There is much trouble to a plain unso-
phsticated mind to make contract out of mere le-
gslatiTe permission to a body of men to follow a
trade for a term of years, on specified regulations
and upon the payment of annual tax; and hence
the great body Of the people neUer believe that the matter
has any feature Of a contract in It. and that eonvic-
ton is confirmed when they are told that one Of
the parties to this alleged contract is under
no obligation whatever to discount a single note or
bil or issue single circulating note, or do any act
in pursuance of the permission granted by legal
license or charter. Every stock bank in the State
may at any time refuse TO perform any function of
banking; may withdraw the whole Of their circu-
laton, what IS worse, may withdraw their effects
and leave their circulation in the hands Of the peO
pie with nothing to meet it. Where is the mutual
" in this alleged contract? What is the corpora
ton bound to do as the consideration Of this pre-
tended contract? nothing whatever. But it may be
said that the constitution authorizes the legislature
to grant such charters of incorporation as they may
deem expedient for the public good and that the
public good is the consideration which binds the
legislature not to recall the permission given to
trade. on the payment of annual tax. ButhOw
long are the corporations bound to furnish this
great good to the people in the case Of bank?
Not one day. They may subscribe the stock to day
and tomorrow cancel the subscription. They
may issue millions initiate prices and derange trade
/ for one year, and withdraw the circulating notes
the next year and put end to this pretended CON
sideration. They claim a charter contract COR if
teen years to 20 on OF stop to dcmoraze the country
by excessive issues depete it by total and utter
withdrawal and non-use of its privileges.
/ Judge STORY, who was distinguished amongst our
ablest Judges for his extreme devotion to corporate
franchises, says in regard to the Charles river
| bridge: THE franchise was not mere private
right From the moment Of its acceptance and the
erection of the bridge, it became charged with a
public right The government had right to insist
that the bridge should be kept in perfect repair for
public travel, that the bridge should be lighted,
that the draw should be raised without expense for
purposes Of navigation and if the prOprietOrs had
refused or neglected to do their duty in any Of these
respects they would have been subject to public
prosecution It would be no defence or apology
that the bridge was Improbable. that the repairs
were expensive that the toll inadequate, or that
that the whole concern was a ruinOus enterprise
The proprietors took their charter with the charge
and must abide by their choice It is no answer to
all this to say that the propretors might surrender
their charter and thus escape from their burthen.
They could have no right to make such surrender
The government might reject or accept the surren
der: and until such acceptance the Lurthens would
be obligatory to the last hour Of the charter, and
when that hour shall have arrived the bridge itself
IN good repair. is to be delivered to the State
.. As long ago as the ease in the year book 22d
Henry G. the difference was pointed out in argument
between such gratis as involve public duties and
public matters for the common prospect Of the peo-
Pile and such as are for their private benefit inyov
ing no such consideration. If a bank or insurance
company, or a manufacturing company is establish
ed in any town by an act Of incorporation, no one
ever imagined that the corporation was bound to do
business to employ its capital TO manufacture goods
to make insurance. The privilege is a mere private
corporate privilege for the benefit Of the STOCKHOLM
ers to be used or not their pleasure, to operate
when they please, and to stop when they please.
Did any man ever imagine he had right to have
a note discounted by a bank, or a policy under
written by an insurance company! Such grants are
always deemed private rights and no indictment
lies for nonusar. But in case Of bridge and other
character Of like franchises, (turnpkes and rail-
roads,) 'they are affected with jas p5lic'rn such
grants are made for the public accommodation, AMI
portage and passage are authorised to be levied On
travellers. which can only be neby public author
itv. The proprietors are bound to keep all suita-
BILE accommodations for travellers under the penal
ty of indictment for neglect. Is there any analogy
in such case to the case of bank OF insurance or
manutac turing company
Without endorsing all that Judge STORY asserts it
must be admitted that there is wide aud enduring
distinction between these classes Of franchisers IN
the verynature of things which cannot be overlook
ed by the dullest understanding and which no |