National Republican., 1875-11-13

ALBANY, Nov. I2-The following is Attorney
General PrRtt's opinion as to investments in Dis
tTiet Of Columbia bonds:
STATE OF NEW YoRk,)
OFFICE OF THE ATTORNEY GENERAL,
ALBANY, Nov. Q, 1875.
Hon. D. C. Ellis, Superintendent Bank Depart
DEAR SIR: Yours of October %, 1875, with en-
closures, was duly received. The Attorney Gen.
eral has examined, with considerable care, the
questions propounded to the Superintendent OF
the Bank Department on behalf Of several savings
banks in the city Of New York, and has come to
the conclusion that the trustees Of savings banks
may, under the statute of this State lawfully in
vest the moneys deposited in said banks in the
a65 bends Of the District OF Columbia issued un-
der acts Of Congress Of June 20, 1874, and Feb
Iuary 20, 1875.
BY chapter 81 Of the session laws OF 1875, sec
tion %, trustees of savings banks are authorized
70 invest moneys deposited In those banks In stocks
OF bonds of the United States or those for which
the faith Of the United States is
PLEDGED TO rRovIDE
for the payment OF the interest and principal. By
section Of the act OF Congress of June ~ 1874, as
amended by the act Of February 20, 1875, after
providing for the issue of the bonds in question,
and for the form thereof it is further provided
follows:
"That the faith of the United States is hereby
pledged that the United States will (by proper
Proportional appropriation, as contemplated BY
this act, and by causing 10 be levied upon prop
erty within said District such taxes as will do SOY
provide the revenue necessary to pay the interest
On said bonds as the same may become due and
payable, and create a sinking fund 10 pay the
principal thereof at maturity"
The terms Of this provision are so familiar to
those used in our State statutes in regard to
INvEsTxENTs By TRUSTEES
Of savings banks as to raise strong inference
that the trainers Of the latter act must have had
the acts Of Congress in relation to the issue OF
These bonds before them and formed the act with
special reference to these bonds. That these
bonds answered all the requirements of our
statute will not be questioned, unless the clause
prescribing the method of raising the revenues
necessary to redeem the pledges in some manner
inpairs or neutralizes the pledge itself
lam unable to construe that clause so as to
give 1t any such effect. As to that proportion OF
the obligations which Congress may decide that
the United States ought to pay, the pledge is ab-
solute and unqualified that Congress Will make
the necessary appropriation to provide for its
payment. As to that proportion which may be
supposed upon the District Of Columbia, the
pledge is substantially direct. Congress has su-
Breme legislative power over the District of Co.
Iumbia, and may impose upon the property or in
haDitants any rate Of taxation necessary for the
payment Of its debt
1tis 60 Nv means Of taxation Of some kind
that the United States Is enabled to discharge its
pecuniary obligations, and the revenues nsces-
sary to discharge these obligations Of the District
Of Columbia may be raised by taxation upon the
property OF the District as we'll as by any other
method Of taxation. There can be no presump-
tIon of any failure considering the amount Of
property SUBJECT TO taxation necessary to raise
the requisite amount OF revenue, and If there
could be such failure the Attorney General does
not sec how the United States could be relieved
from its pledge. THE faith Of the United States
is pledged that the United States will (by caus-
ing TO be levied property within said District
such taxes as will do SOY provide the revenue ne
eessary," &c.
The pledge is so LabsOlute that the United
States must be deemed to take the risk Of any
failure in its objects of taxation. The Attorney
General, therefore, feels constrained, upon q
more deliberate examination oE the question, to
modify the opinion heretofore rendered from this
Department to the superintendent Of the bank
department, and advise that, in his opinion, trus
tees OF savings banks in this State are legally
authorized to invest the funds OF said banks in
the s65 bonds of the District Of Columbia, issued
under act Of Congress, June 20, 1874, and Feb
ruary 90, 1875. All of which!is respectfully sub.
mitted. DAHL PRATT,
Attorney General