The state rights democrat. [volume] (Albany, Linn County, Oregon) 1865-1900, 1873-11-07
TAXATION FOR SUBSIDIES To RAIL
ROADS DECLARED VOm.

Harper's Magazine for November,
the statement of a very important and
final decision of the highest court Of
resort in the State OF New York, up.
on the question Of raising money by
taxation for the benefit of railroad
corporations. The Act of the New
York Legislature, of 1870, in respect
to bonds by municipal corporations
to aid in constructing railroads, is de-
clared to be void. This decision fully
sustains the grounds taken in this
State three years ago, by Governor
Grover, in his veto Of the Portland
Subsidy Bill. tits somewhat remark
able that our Executive has been
called upon to act on many new and
leading questions, and that subsequent
events and decisions have uniformly
justified his course.
Harper's Magazine says:
"After eighteen years the Court Of
Appeals of the State of New York
has declared the legislation unconsti-
tutional authorizing municipal corpo-
rations to issue their bonds to aid in
the construction Of railroads. The
Judgment of the court was rendered
by Associate Justice Martin Grover
and includes a review Of the entire
subject. 1t is declared to be within
the power of the Legislature to pro.
vide that money shall be raised by
towns on bonds issued TO be paid by
taxtion to construct and improve its
public highways, but it has no such
authority over the towns IN respect
to aiding private corporation. Leg.
islators can compel towns to issue
bonds in aid of railroads if they are
public highways in the same sense as
common roads. 1t has been uniform.
ly held that the right of eminent do
main my be exercised so far in behalf
of railway corporations as is necessary
for the construction and operation Of
the road upon the ground that the
road and its operation were for pub
lie purpose, and the real estate con
demned for its use was taken for pub
lie and not private use. But it is
equally clear that the property ac
quired for the corporation belongs to
it exclusively, and its ownership is as
absolute as that of any private individ
ual OF property belonging to him.
Yet the road is operated for the pri
vate emolument of its stockholders
and therefore the operation is private
Municipal corporations are created by
the Legislature as instrumentalities ol
the government, and are absolutely
subject to its control so far as legisla'
ton for governmental purpose is con
cerned. If the purpose to be effected
is public, mandatory statute is valid
If it is private enterprise, il is not
within the province of Legislation, and
is therefore void. A railroad corpo-
ration savors of the characteristics oi
both; it is public as to its franchise
and private as to the ownership Af its
property and its relations to its stock
holders, The Legislature is supreme
only as to public purposes The act
of 1870 in respect to bonds by munici.
pal corporations to aid III construc-
tion of railroads, relates to private
purposes, is to that extent void, and,
as the latter feature is inseparable
from the former, the entire act must
be held to be void.
This decision will give the quietus
to practice which has been carried
to an abuse, threatening calamitous
results"
Upon this subject the Portland
Ne'os very justly remarks:
At the time the veto of our Execu.
tive was promulgated, it was made
the subject of sharp animadversion
and bitter denunciation by the parti-
san enemies of the Governor and by
the railrod interests of the State
That message has been gall and worm
wood to the Ring party ever since the
day that it was read in the Legisla-
ture. 1t is this, chiefly, that has in
fccted the hostility to Governor Gro.
YER with that malignancy that has
characterized it from that day to this,
The doctrines of that message have
never been acquiesced in by those who
urged the passage of the 100000
Subsidy Bill, and because of this fact,
the decision in question, aside from its
general interest, is of great import
ance here.
The limitations, stated in terms, in
the Constitution upon the Legisla-
tive power of the State, are so un-
equivocal that it is difficult to see how
there corld bo more than one opinion
as to the operation against the design
of the bill, But another question
raised in the message was not so free
from difficulty, In his veto the Ex.
ecutive used this language; a believe
that without reference to constitu.
tional limitations, this bill goes be-
yond the power of the Legislature to
impose tax upon q people, To
make tax legitimate, it must be for
public, aud not for private, pur.
pose Taxation for the benefit Of an
individual or corporation, upon cou-
siderations real or speculative, can
never be upheld"
IL will be seen that the Governor
did not rest his veto solely upon the
express limitations contained in the
Constitution, but he took the broad
ground that the Act contravened that
implied limitation which the para
mount interests of the people had es.
tablished, and the maintenance of
which was necessary to their liberty
and safety. 1t was the assertion OF
private rights, and this is the idea up
on which tho various movements to
protect industry in this country are
based, IL was braupht iorward and