Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1870-03-04
Received and ordered printed.
GAS COMMITTEE.

MEMPHIS, February %, 1870.
To the Honorable Board OF Councilman:
Gentlemen: Upon the resolution refer
ring TO the Gas COMMITTEES the question
Of the issuance of bonds to the Memphis
GayOsO Gas Company, and also upon the
seven thousand dollars to the above COM
pany, your committee reports,
First, That they have consulted the
City Attorney and find that according to
our charter we have no power 70 issue
any bonds to any such company.
Second, That the ten thousand dollars
subscribed and of which three thousand
were drawnby the President OF the above
named company, was illegal, as the opin-
ion of the City Attorney annexed to this
report will show; we are, therefore, OF the
opinion that il is not in the power of the
city to subscribe at present any stock TO
the GayOso Gas Company; neither ought
the balance Of the seven thousand dollars
be paid which were yOtedtO said company,
Tor the reason set down in the City At
lorney's opinion
MARTIN COHEN, Chairman.
Report adopted.
MEMPHIS, February %, 1870.
Hon. John Johnson, Mayor, and the Com
mittee on Claims:
Gentlemen-As requested, l have eN-
amined the proceedings of the Board Of
Mayor and Aldermen of the city in refer
ence to the subscription of stock TO the
Gayoso Gas Company, a copy of which l
return with this opinion.
do not find that there ever has been
any contract on the part of the city to
subscribe for stock.
There was a resolution introduced and
passed a first reading thai the city sub
scribe stock.
The resolution was then referred to the
Finance Committee, n a report was
made recommending that the city sub
scribe $4,000 stock upon certain condi-
lions. The report was adopted.
No further action appears to have been
taken in reference to the resolution or the
And l learn from the Comptroller that
there is no evidence in his office that a
formal contract of subscription was ever
entered into.
Mr.. Donovan, the President of the
Gayoso Gas Company, also informed me
that he had no formal contract Of sub
scription.
But it appears from the records in the
Comptrolier's Office that 5000 was paid
on the assumption that the subscription
had been completed.
am of opinion that these facts do not
show a binding contract OF subscription,
either as against the city or the Gas Com
pany.
The proceedings of the Board in refer
( ence to the subscriptions of 100000 and
$4,000 evidently never amounted TO con-
tracts of subscription.
The city, therefore, as L said in the be-
ginning, has never, in my opinion, con-
tracted to subseribe'stoc in the Gas Com
pany.
And, as no contract has ever been en-
tered into, / am also Of opinion that the
80 - -. m FhnrfFv 11egu To nmrar into
the contract. The great lapse Of time, the
change of city officers, and, indeed, the
repesl of the charter hen in force, and
the substitution of a new, and III some
respects a different charter, are sufficient
reasons why he should not do 50.
But there is a greater difficulty. | have
been able to find no warrant in the Otd
charter to authorize the subscription.
section 40, page 23, Bridges Ordi'
nances, certainly cOnfers no such au-
thority, nor have / seen any other pro
vision that does
The extent of section 40 is to authorize
subscriptions TO railroads, and to author
ize The making of public improvements
or the acquiring Of property for pubic
use, to be paid ia bonds Of the city, to be
issued only after the submission Of an
| ordinance to the people, and their ratih-
cation OF it.
/ do not believe the subscription o.
stock in any sort Of q corporation would
/ come within either Of the powers granted
Section 81 of the new charter Is similal
10 section 40 before referred TO.
And / can find no authority In the new
charter for subscribing stock IN any cor
poratiOn.
/ am, therefore, as you have already
| seen, Of opinion that no contract to sub
scribe stock has ever been made with tn
Gayoso Gas COmpauy-that none coulI
lawfully have been made-and that non'
can now be made. Respectfully,
800 ~ GU