The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1874-06-03
An Important Decision.

rites, the probability that such bonds would
be declared illegal, the possibility that the
paper city issuing them would never grow to
the great expectations of the projectors, and
above all, the high rates of interest and the
runous discount at which these securities
sold, tended 10 produce distrust in
them in their best days. Last Fall when the
public mind was disturbed by the panic we
were deferred from publishing some import
ant decisions of Western courts, both State
and federal, affecting these securities, simply
because any distrust cast upon Western
bonds at that time would have removed
confidence not only in all kinds of securities,
but the holders of savings bank books
would have made a run upon thes,
institutions which would have in
curably driven them into suspension if not
insolvency. Now the danger of general pam
ic is over and the people have so got control
of themselves that they will distinguish be-
tween Western and home security. The
day has passed when the wild cat securities
are popular with people who get their sur
plus dollars by hard work.
The Supreme Court of the United States
has recently rendered decision affecting
class of these Western municipal securities
which is so important as to demand more
than passing notice.
The facts in the case are briefly as follows:
WATERFOWL, Wisconsin, is city of 1868 in
habitants, having property that is assessed at
little over million, and debt of $3.50, 900
which was contracted in a fit of railroad
fever, with the understanding that the rail-
road company would pay the bonds and their
interest. The corporation, as is often the
case, failed SO to do, the road was foreclosed
and sold, leaving the large debt for the city
to take care Of One Rees owned a part of
this little city's big indebtedness and after
several years delay, during which time he
had no occasion to detach the coupons from
his bonds, he brought several suits against
the city in the United States Court of that
State. In due course Of time he got his ex-
ecutions against the city. In November,
1858, he obtained from the Court a peremp-
tory writ of mandamus directing the city of
Watertown to levy and collect tax upon the
property of the city to pay the judgments;
but before the writ could be served, Major
ity of the city council resigned their offices.
The marshal, learning this fact, ceased pro-
ceedings under the writ. In May, 1869, an
other board having been elected, another at
tempt was made to compel the authorities to
lay the tax, but majority resigned in season
to Illustrate the purpose of the officer.
Special elections were ordered but the voters
failed to respond, kept three in one ward,
but the man elected was not patriotic enough
to accept the office. There is little or no diff
terence i'll the statement of facts by either
party.
In view of the facts above set forth, the
plaintiff asks the aid of the Court to subject
the taxable property of the city to the pay
ment OF his judgments, alleging that the
corporate authorities are trustees for the ben
fit of the creditors of the city, and the prop
erty of the citizens is trust fund for that
purpose, and that lit is the duty of the court
to lay hold of the property and cause it to be
justly applied by ordering the Marshal of the
Court to sieze and sell so much of it as may
be necessary to discharge mis- debt.
The defense does not make much oppo-
sition to the payment of the bonds which are
Inquestionably issued by authority of State
law, except that the city never expected to
pay the bonds, relying upon the railroad to
1t, and are unable to pay the whole amount,
but are willing to compromise and pay part.
The defendants further set forth that there
is no law to compel the aldermen to hold Of
flee to levy taxes as was attempted by the
plaintiff; that the plaintiff took his chances
OF the levy being made voluntarily and that
not being so done, there is no violation of
law.
The court in making its decision admits
the fairness of the plaintiffs case and the
bad faith of the WATERFOWL authorities as
well as their theories respecting the debt
which it calls vicious. A majority of the
court, however, concludes that the Supreme
Court Of the United States has no power to
direct tax to be levied for the payment of
such Judgements, as the power to raise
money is "the highest attribute of sovereign
ty and is not extended to the judiciary" The
opinion further states that it is ESPECIALLY
beyond the power of the federal judiciary to
assume the place of State in the exercise of
this authority at once so delicate and i'm
portant."
This decision is very important since it
opens way for small cities burdened with
railroad and other loans 10 repudiate such
obligations; and if bonds in aid of railroads
can be SO easily repudiated there is no reason
why any kind of municipal obligation
should be honored.
The Court also calls attention to the fact
that the charter Of the city of WATERFOWL
provides that the property of any inhabitant
or corporation thereof shall not be levied on
or sold by virtue of any execution issued to
satisfy any debt or contract of the city. Con-
in order to obtain money to dis
charge an execution in the city of Water
own and other western municipalities, it is
necessary to levy tax on all the property,
which is declared to be voluntary act of its
officials. In view of these facts, the term
western city securities will be regarded as
,ne of sarcasm and something of mockery to
hose who look over coupons over due.
Judge Clifford has given dissenting opin-
on which is concurred in by Judge Swaine,
n which he says that he dissents from the
opinion of the Court in the case upon the
ground ''that equity will never suffer trust
10 be defeated by the refusal of the trustee to
administer the fund, or on account of the
OF the trustee, and also because
Oh the effect of the decree in the court be-
low, II affirmed by this court, will be to give
judicial sanction to fraudulent reputation
of an honest debit
NE" 1oRK contemplates the erection Of
great gram elevator, deeming it Imperative
ly demanded by local business interests. In
regard to the project the New York Mail says
''The city on the seaboard which. beside