The weekly democratic statesman. [volume] (Austin, Tex.) 1871-1883, 1875-07-08
CORPORATIONS PUT IN LEADING
sF~bN6S--HOW THE u. =. So
PREME COURT HARNESskD THEM.

CORPORATIONS PUT IN LEADING
STGBN6S--HOw THE U. y. So :
PREME COUNT HARNESsED TREM.
We referred some days ago to a decision
of local Federal court affecting the valid
ity of bonds issued by municipal corpora
tions. Another case has gone before the
United States Supreme court from Topeka,
Kansas. This town issued its bonds 20 aid
in building manufacturing establishment.
The bonds were sued on, and now the high
est judicstory in the United States holds
that such bonds are invalid and do not bind
the city or taxpayer. Judge Miller, the
whole court concurriDg, said:
''There is no such thing in the theory Of
our government, state and National as un-
limited powers in any of their branches.
The executive, the Legislative and the judi
cial departments are all of limited and de-
fined powers. There are LIMITATIONS of such
powers which arise out of the essential ma
ture Of all free governments, implied reser-
vations of individual rights, without which
the social compact could not exist, and
which are respected by all governments en-
titled TO the name. Among these is the
limitation of the right of taxation, that l.
can only be used in aid of public object
an object which is within the purpose for
which governments are established 1t can
not therefore, be exercised in aid of enter
prises strictly private for the benefit of in
dividuals, though in a remote or collateral
way the local public may be benefited
thereby"
Under such a strict construction of the
powers of a corporation it is plain
enough that no one could buy the
bonds of Austin issued in behalf of
great irrigation scheme contemplated
by our city fathers, who would construct
locks and dams and canals, and transfer the
water from Marble Falls over or under
mountain heights to Austin. The corpora
tion was created that it might promote and
| guard the well-being of its inhabitants, but
the powers with which it is invested must
be rigidly construed or property would be
made valueless by speculative schemes OF
those who would irrjgate farms and employ
the credit of corporation in promotion of
private aims. II Topeka could not invest
in cotton mill, Austin will hardly be sui
|
the machinery of mills, and make farms
blossom like a paradise, and, until this
point Is practically determined, no one
will buy Austin bonds issued in promotion
of the Mayors scheme of public @ benefi-
cence. Municipal bonds must be issued,
and the courts language bears no other in
depreciation, in aid of a public object-an
object within the purpose for which the
municipal government was created. What
may or may not be "public Object" it
may be difficult always to determine, but
the people are safe. Until this point is de-
4 termined nobody will buy a county's or
cIty's bonds, and if bonds be put upon the
market and sold at heavy diseount-even
at seventy-two cents, and even to Forster
the discount being enormous because the
validity of the bonds is doubtful, the city
government imposing such losses upon
the people should be instantly destroyed.
While the city would not be suffered to in
vest in a cotton mill or irrigation schemes
designed to serve the country and city and
promote public and private prosperity, it
would seem that the city could make no
valid contract binding taxpayers in behalf
of water works unless these were con-
structed in an approved manner, designed
plainly to serve the city and its people, and
not as private, personal speculation. If
the powers of corporations cannot be diff
fused and subordinated to widespread pub
lie purposes, they surely cannot be restricted
and directed into channels of purely per-
sonal gain and selishness. The rulings of
the Supreme Court must operate in both
directions, and it must be very difficult to
distinguish at all times public uses, for
which taxation may be imposed, from pri.
vate, in behalf of which the power to tax
is imperative. This fact is confessed by
the Supreme Court, and the judge said:
''It was none the less the duty of the
courts to aid to prevent citizens property
from being unlawfully appropriated to the
use of others. A statute which authorizes
a town to issue its bonds in aid of the man
ufacturing enterprise of individuals is void,
because the taxes necessary to pay the bonds
would, il collected, be a transfer of the
property of individuals to aid in the pro-
ject of gain and profit of Others, and moi
for public use, in the proper sense of the
term."
This dictum Of the court will surely in
vest the sale of county and city bonds with
many difficulties, and would make it doubt
full, if corporation were not specially
authorized by the Legislature creating it
whether a city or county could use its credi
in behalf of railway scheme. Very plain
ly the uncertainty of the law affecting thes,
matters may well cause mayors and alder
men much perplexity, especially now, wher
every scheme Of local legislation becomes
job, and when men, utterly unfit for Office
are selected by incapable voters to admins
ter upon the effects of dead and dying com
munities.