The Portland daily press., 1889-04-02
THE NEW STATE BONDS.
The Issue Deemed to Be Valid by the
Supreme Bench.

AUGUSTA, April 1.-The Judges of the
Supreme Court today rendered the following
opinion respecting the validity of the new
issue of State bonds. 1t will be remembered
that when the bids were opened last week,
the question of constitutionality was raised,
and the successful bidders proceeded to New
York to ascertain if the State banking au-
thorties there would allow the New York
savings banks to invest in them. The reply
was that the bonds would be admitted If the
Maine Supreme Court would pronounce them
sound.
AUGUSTA, Me-, April /, 1889.
Hen. Edtcir c. Burletgh, Gorerraor:
asking the opinion of the justices of the Supreme
Judicial Court whether in their opinion upon the
statement In your communication the act of the
legislature OF Maine, approved March 13, A. D.,
1889, being chapter 3O8 of the public laws OF
1883 is constitutional, and whether the bonds is
ceived and has been fully considered. In answer
TO your inquiry we respectfully reply that in the
opinion OF al the justices, the act referred to
surance OF such an act would be valid Article
., Sec IA OF the constitution declares that the
legislature shall not create any debt exceeding
limited amount named except to suppress insur-
rection, repel invasion or for purposes of war"
The issue of bonds, which by the act of 1885, is to
be dated as June l. 1889, will vastly exceed the
constitutional limit, should it be regarded as a
now debt In our opinion it cannot In the const-
tutional sense be so regarded. 1t will rather be
the old debt in a new form. The issue OF bonds
soon to mature was originally provided for .'pur-
state.
But the bonds to be issued Just as much repre-
sent the war debt as do the bonds to be retired 1t
Will be as the act denominates it, renewal and
extension OF the bonded indebtedness of the State.
new credit or borrowing is substituted for the
old upon favorable terms 10 the state, the new
bonds being exchanged for the DID, bond for bond.
II would literally be renewal and extension of
the debt, and If the new bonds are sold to obtain
me ans with which to liqu0ate the old, it will in
All substantial respects amount to the same
thing.
The same result will be reached as far as the
State is concerned. The old bonds were evidence
of the war debt. The new bonds will become
such evidence by substitution. The holders of
the old bonds would in equity be considered as re-
ceving payment of their debt from the. purchas-
ers Of the new bonds, when the money received
the act provides that the receipts of sale shall be
so applied, and Judicial remedy may be had. If
need be. to prevent misapplication'
Whether the debt of the State be represented
by one set of bonds or the other 1t is one and the
same debt as far as the constitutional provision
the payment Of the debt but does not extinguis5
from Gradual taxation s Re@ Sebe th and az pqopeff pq9pffs
of the state. The issue of the bonds to bear
date of October /, 1889, Is to be appropri-
ated for the payment or removal OF another IL
debtedness OF the State which was originally au-
thoriZed by section 10 of article of the cVpsti-
tuition. That section authorized the state 70 IS
sue bonds payable within "a years win . per
cent INTEREST tiIo ponds or their proceeds to be
devoted towards the reimbursement OF the towns
and cfJies of the state for the expenditure OF
moneys for the purposes of war during the rebel
lion.
Now these bonds are nearly DUE We can per-
ceive no constitutional or other objection TO a re-
newal or payment of them by new issue. The
constitutional clause provided that the original
issue should be at 8 per cent on no longer term
than 81 years. But it does not, In terms or by ap-
plication, limit the means by which the indebted
ness should be paid.
No sinking fund is required nor made of taxa
tion prescribed by the constitutional clause to
sure an extiDguishment OF the debt before or at
situtional obligation of the State and the legsla-
ture is not prevented from resorting to any pl ac-
tical methods for keeping the credit Of the State
unsullied. IL follows that the legislature has
power TO prescribe the payment or renewal of
this branch Of the State Indebtedness as it deems
proper, without infringing upon other constitu-
tIonal decisions.
The decision was unanimously signed.