Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1874-06-09
THE INTEREST TAX.
Injunction 20 Restrain the City Author
lilies from Any but ats Proper Use.

Yesterday w. T. Booker, citizen OF
the State of Virginia, filed bill in the
first chancery court asking that the city
of Memphis be enjOined from disturbing
or digposing of the interest tax now on
hand, or hereafter to be collected as such
interest tax, for any other purpose than
the payment Of interest Oh its bonds.
The plaintiff AYERS that he is the innc-
cent holder and owner of certain cou-
pors, or interest warrants, issued by the
city of Memphis, which he obtained on
prOmisory notes in due course of trade,
for value and without notice, and is
therefore In contemplation OF law as an
innocent holder thereof. Complainant
charges that such coupons were legally
issued, and placed on the market as any
other negotiable security, and as such
came into his hands; that to meet said
coupons at maturity the defendant, as
in duty bound, has levied and collected
a special tax, called ''the interest tax"
there being In the city treasury Of Mem
phis over seventy Thousand dollars of
this interest tax, so levied and collected.
Complainant alleges that it Is the duty
of the city of Memphis TO apply
the interest tax to the payment of the
coupons, or interest warrants so held by
him, and not to use said fund for any
other purpose, this being obligated by
virtue of charter So, which reads: "The
general council shall have power in ad-
ditiOn to lay and collect a special tax for
the sole and special purpose of paying
the interest as the same may Become
due on the bonds issued, or to be issued
by the city. The said tax shall not be
greater than may be necessary for the
purpose. A separate account thereof
shall be kept, and the money received
under it shall not be applied to any oth,r
purpose sohdtever." The complainant
further charges that Mayor Loague and
the finance committee of the general
council have resolved to use, and are
actually using said interest tax now on
hand for other purposes than the pay
ment of interest On its bonds, hut to
what particular use be knows not. He
Is informed, and believes, and so charges
the fact to be, that the defendant well
knowing that the direct application of
this fund to other purposes would be il
legal, have fallen upon q device, the
offspring Of chicanery and deceit,
whereby they purpose to do In
directly what they know cannot
be done dlreetty, 8 thing which a
court Of chaDeery win never allow.
This device Is to bJrrolg nom themselves
the said interest fund, and then pass 1t
to the credit OF themselves on some other
account, and thus apply 1t to some other
purpose. This "weak Invention of the.
enemy may be brilliant, as one Of the
strokes In grand financial policy, but
its moral turpitude is no less worthy Of
admiration. Complainant alleges that
the application OF the fund for other
purposes than prescribed by law, viii at
least postpone the payment of his cou-
pons until another tax can be levied, as
no payment, according to the charter,
sectlon n, OF the same osn be made out
OF the general or ordinary revenue OF the
city when q special tax is levied. Un-
less the city be restrained from missp-
plying eAis fund by proper writs Of in
junction, he will be without the means
Of collecting his debt. The legislature
having, on July S, 1870 facts of 1870,
chapter 110), exempted from execution all
property used for municipal or public
purposes, and the city has no other, COM
piainant further alleges that there would
| be no fund out of which he could make
/ his debt should he seek redress ia the
proper tribunal, unless the city be re-
| strained from Illegally dispOsing of the
/ fund now on hand or to be collected.
/ Complainant shows that the coupons, or
warrants, except one for seven hundred
and fifty dollars, are made payable in
the city OF New York, and bear interest
after maturity at the rate of seven per
cent. per annnm, that being the legal