Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1883-01-17
THE DEBr OF The CITY OF MEN

We publish elsewhere report of the com
m;'tse appointed by the Citizens meeting
h'll at the courthouse some weeks ago, t.
c-rsder the question OF The debt of the Cit
OF Memphis and report plan OF settlement
10 meeting that, we understand, is 10 b.
called for Friday evening next at The Green
law Operahouse.
1hS report recommends that The bonds b
funded at fifty ents on the dollar at sir per cent
interest The funding bonds 10 be issued b
the Turing. District government, the coupon
10 be receivable for toxes due The said govern
ment, and the Legislature 10 Levy tar 10 pa,
the interest and for tie creation of sink
ing fund for the liquidation of the debt, The settle
Tasnt no. take e6tct uafil three olrths of The cred
it0rs IN amount shlH siLnity their acceptance o
and vithin a time 10 be limited
The committee enforce these recommends
lions with what they consider controlip.
reasons, each of which we will endsayor te
answer successfully. The frs. is az follows
" Our State courts have already decided tina
the district Is he successor OF the city anC
Is liable for its debts. Judgments to the amour
OF hundreds OF thousands Of dollars have beer
whether the courts can by mandHmus COMPEL IN,
Taxing District to levy taxes for the payment o
Legislature conIeTring on L the taxing bowel y n
the United States.
AnS0er.-The United States Suprems Cour
has already decided this. question. In an
nouncing its decision in-the case Of Garre,
Son rs. Meriweiher (R-ceiver for the CITY
OF Memphis), Chief. Justice Waite said. "IA,
PoDeT Of taxation is fgi,h fire, and cannot b,
exercised othe' t0ise than nder The authority o.
the Legislature" In the same case, Mr.. Jus
tcs Field, delivering an opinion for himself
Mr.. Justice Miller and Mr.. Justice Bradley
said: when creditors are unable TO obtain
payment Of their judgments against munici
pal bodies by execution, they can proceed by
mandamus against the municipal su horities
to compel them to levy the necessary tax for
that purpose, If such authorities are clothed BY
the Legislature with ta1ing-power, and such
tax, when collected, csnnot be diverted to
other uses; but if those authorities possess no
such POiUer, o. these Offices haze been abolished and
The pOWer withdrawn, the remedy Of he creditors
Is by an appeal 10 The Legislature, Which alone
can give them relief NOFEDERAL COURT,
EITHERON ITSLAW OREQUITYS SIDE,
HAS ANY INHERENT JURISDICTION
TO LAY A TAX FOR ANY PURPOSE,
OR TO ENFORCE A TAX LEVIED, EX-
CEPT THROUGH THE AGENCIES PRO-
VIDEO BYLAW. HOWEVER URGENT
THE APPEAL OF CREDITORS AND
THE APPARENT HOPELESsNESS OF
THEIR POSITION WITHOUT THE AID
OF THE FEDERAL COURT, IT CANNOT
SEIZE THE POWER WHICH BELONGS
TO THE LEGISLATIVE DEPARTMENT
OF THE STATE AND WELD IT IN
THEIRBEHALF.n
The committee Offers as- alternative
reason, anticipating such a decision as the
above, the following:
~ Should the Supreme Court decide in our IA
taxation, then how long Will it be before the
Legislature, at the instance of the creditors will
can show that the exacIions Of our Creditors are
grossly unreasonable and unjust.
Anspe.--The APPEAL will show from
the testimony Of ninstesn Of the abiesi lawgers in
the STATE, all Of them prominent members Of The
Bar Of Memphis, ha THE CREDITORS
ARE UNREASONABLE The names of
these lawyers are: B. NJ. Estes, H. T. Elicit,
Archibald Wright, Folks, Luke Wright,
Humes, Poston, CAN'T, Patterson, Clapp,
Beard, Smith, Collier, Craft, Cooper, Wealth.
erford, L. II. Estes, jr., c. w. Heiskell and
J. B. HeiskelI.
The creditors OF the city OF Memphis can
not appeal to the Legislature TO ruin the
Taxing-District government, not only be-
cause that would be itself wrong, but
because they are unreasonable in de-
mauding that the Taxing. District gov
eminent shall issue the compromise
bonds-for if issued by separate COM
mission, they would be just as strong,
and stronger than a bond Issued by tax
levying municipality. since the act Great
ing such a commission would become part Of
the contract with the bondholders and could
not be annulled even by the repeal Of the act,
the creation OF a sinking fund would be per-
petual until the deb, principal and interest,
had all been paid. The evidence TO this
effect OF the Memphis lawyers above named
is as follows, and was freely rendered at the
time that the present commission known as
the Liquidatirg Board) was appointed:
The bonds OF this board will be free from such
contingencies. The law is self executing. The
tar is laid once and for all time until tine debt
paid. No occasion can arise for squirting tardy
officials into diligence by legal process. The bonds
therefore, possess not only all the security OF Or
binary municipal obligations, but also this ex
traordinary feature, which adds greatly to their
value by assuring the certainty and regularity Of
All public credit is based upon the government
power is vigorously and regularly exercised will
be the value of pubic securities. The bonds OF
value IN high degree. for the tax for their pay
ment will accompany the bonds until the latter
are extinguished.
the tax imposed will be irrepealable as to the
holders Of them. This is true OF mum cipal bonds
municipalities power to lay taxes for their pay
lnent. Such power of taxation cannot be taken
But The same end NAV be attained by total re.
peal of the charter, in that there would be
no agents remaining in existence 70 lay the tax
and thus the remedy of the creditor would be
defeated.
In this respect it seems to us that the lquidating
bonds will occupy more favorable position. The
repeal OF the acI would not destroy the agency by
which the tax is imposed. The tax itself is con-
tinuing. and does not require to be annually
renewed If the Legislature were to repeal the
entire act, such repeal would be OF no effect to
fights Of the 5ond6olders. It would p sun be
the duty OF the county trustee to collect the tax
before such attempted repeal, and that duty could
be enforced. Tho Liquidating Board, however,
would be abolished, and there would be no agency
provided to receive the tax from the trustee, and
equity never suffers trust to fail for want of a
trustee, and, in the case supposed, would have
Jurisdiction to appoint suitable trustee q sub
stitute for the board, with power to perform all
the duties assigned to 1t under the said act.
] his is the opinion OF Estes & Elicit, and
& Wright, by Humes & Poston and by
CAN'T & Patterson. A strong array OF
names this, and the resder will say quite
the equivalent of the very respectable and
highly esteemed members of the committee.
But there are more 10 come. Clapp &
Beard say:
As the power of a municipal corporation to make
contracts or 10 issue bonds is derived wholly from
the legislative branch of the government through
special grants or acts of incorporation and such
polite, may be created and destroyed ut the
pleasure of the Legislature, we regard
in repeating the charter to make such
regulations as may be necessary in regard to the
indebtedness Of a corporation whose charter is so
repealed, and to appoint persons clothed with
authority to adjust such Indebtedness by the
issuance OF bonds or otherwise; and the acts OF
the persons so appointed, when within the pur-
view of their authority, Will be valid and ob!iga-
tory, as much so certainly as when Issued under
the sanction OF law by the municipality itself be-
lore the repeal OF its charter
Smith & Collier say:
The pledge to levy the tax until the debt is paid
contained IN the second section of the act, is in
the nature OF contract with creditors who accept
the compromise. We think the rights Of credit
are secureL as well as If the bonds were issued
by the cIty itself The pledge already referred TO-
contained in the second section, and making the
coupons receivable for the taxes give the security
Hence, the form of the bond seems immaterial.
Craft & Cooper say:
The city Of Memphis, by reason Of the repeal Of
and the Taxing District having no such pows r ii
necessarily follows that the Legislature alone can
levy tax for any purpose within tue territory OF