Mexico weekly ledger., 1888-11-01
THE BOND QUESTION.
The Clty's Lawyer Responds to
"Querist's" Communication,

To the Editor If The Ledger,
MEXICO, Mo-, Oct, 25,-In view
of the fact that all the questions
asked by "Querist" in his COM
m%unieation published in your paper
yesterday ARE questions OF law upon
which | have advised the City
Council, | will answer them. Let
il be understood, however, that this
is not intended as an argument
either for or against the PROPOSE
ton submitted to the people, but
is intended to so explain the mat
ter that no one will cast his vote
under the impression that there is
n fatal error in the form ofthe con
tract or ordinance; but on the merits
or detaerits OF the proposed plan:
"Quesist' first asks, "Dces the
Water-works Co. own the back
rent and has it not been assigned
TO the bondholders to pay inter-
est?" 1t doesn't make a particle
Indifference which of these parties
owns the back rental, because un-
der the agreement the city pur-
chases both bonds and stock and
if all the stock is purchased by the
city-as provided by the ordi-
nance-the city will be entitled to
everything due the corporation. for
each owner of a share of stock is en-
titled to his proportional part of
what Is due the corporation and if
the city, securing all the stock,
everything due the corporation Will
be due to 1t. On the other hand,
if the rental has been assigned to
the wner of the bonds to pay the
interest thereon and the city, pur-
chases ali the bonds-as provided
by the ordinance-the interest due
on the bonds, of course, passes
with the bonds and viii belong to
the city, just rs the interest on a
note belongs to the purchaser there
of. This seems clear and it also
shows the absurdity of the question
asked by 80" in the I~ntelligencer.
"Querist' also desires to know
whether it would not be well for
the city to buy the Water-works
property, the real estate, engines,
mains, etc.
All of these things pass with the
stock. A corporation of this kind
is represented by stock; no one can
have an interest in it or own any of
its property except by owning
stock. Every transaction whether
of sales, collections, purchases or
what not is for the benefit of the
stakeholder. The stockholders are
the corporation, and the property
belongs to them. Now it is self
evident that if the city purchases
all the stock it will stand in the
place of the stockholders.
If you own bank stock and the
bank owns real estate, of course
you have an interest In the real es-
tate, but when you sell your stock
you part with all your interest in
the concern without making a
deed to real estate, so If all the
stockholders sell, interest in real
estate passes to the purchasers.
1t is not a fact that the PROPOSE
ton submitted is entirely different
from the one supposed to be SUBJ
mitted.
All the money to be paid out for
a work of this kind must come out
of the fifty cents on the 500 which
the State constitution allows our
city to levy without submitting the
question to a vote of the people.
The sinking fund will therefore in
this cas- consist merely in setting
aside a part of this money for the
payment of the debt created by
issuing the bonds. It is only a
sinking fund created for a special
purpose and by making a levy
greater than the so cents on 500
that must be created by a vote OF
the people.
The City Council Mould not have
to order another election to carry
into effect the powers granted them
If the present propositionis carried.
The City Council by its charter
has the power, without a vote OF
the people, to provide the city
with water, and if they had money
enough could buy the works i'm
mediately.
But the State constitution says :
ono county OR city 4 X X
shall be allowed to become in
debted in any manner or for any
purpose to an amount exceeding in
any one year the income and
revenue provided for such year,
without the assent of two-thirds of
the voters thereof voting at an cleo
ton to be held for that purpose"
The debt proposed to be created by
issuing bonds in this case is more
than the revenue for one year, and
the question is, whether this assent
shall be given by voting for the
issue of bonds.
It is no more necessary to SUBJ
NIT to the people the details con-
corning the sinking fund and bonds
than it is to have them vote on
what color the paperthey are print
ed on shall be.