Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1889-04-05
MAINE BONDS.
Full Text Of The Opinion Of The New
York Attorney General.


| new re1unuinK aCt anu the procedure uuue
our constitution req airing the court to Civ
opinions on the constitution. As At,orne
General Littlefield had requested that MI
Heath should be called on If there WAS nc
time for him to come from Rockiand, tn
matter was at once placed in Mr.. Heath
hands. After telegrsphing the references {
cases cited in the opinion below. q secon
telegram explained that the situation re
quired his presence. MIR. Heath on his ar
rival found that bonds of the State of Indian
just issued under refundng bill had beer
refused admission into New York. The i'm
| portance TO the State of the opinion come
from the fact that the New York saving
banks are the only market for our bonds a
their low rate of interest (three per cent
| This result inSures the success of the re
funding. The successful bidders, Simo,
Borg Co. of New York. will be here ne
week 10 sign the final contracts. The Sa.,
saves nearly 100000 year in interest
The State receives premium If 3 10 De
cent. on its Juie bonds and per cent on it,
co.nbers. Ii is generally conceded that the
terms are exceedingly favorable to tn,
State. The following is the opinion Ien
dered in New York:
STATE OF New York, !
aITOkNEt bENEkAL offiCE.
ALBANY, April Srd, 1889.
Hos. WILLIS S. PAINE. Supt. Banking De-
partment:
Dear Sir Your communication of the
30ih ultimo, enclosing a letter addressed to
you by Andrew Mills, Esq President Of the
Dry Dock Savings Bank, with other letters
and p .pers, has been received.
1t appears that Mr.. Mills desires you to
int, IA 10 IL. ,al 60 H..
banks of this State to invest in certain bonds $
issued by the State of Maine pursuant TO an
act of the legislature of that State passed
March l3. 1889.
Chapter 500 Of the Laws Of 1889 prescribes .
the securities in which savings banks may
invest their deposits. and subdivision 5 of
section 2G0 reads as follows:
"In the stocks or bonds or interest bear
ing obligations of any State in the Union
that has not, within ten years previous to
making such investment by such corpora
ton, de faulted in the ,layment of either part
of any principal or interest of any debt au-
thorized by any legislature of such State to
be contracted"
1t is, believe. conceded by you that
there never has been default in the State
of Maine in the payment Of any Of its OBJ
legations.
The only legal objection that could be
raised, therefore, to savings banks investing
in these bonds would he that they were
illegally issued, aud | understand that it
has been suggested in some quarters that
this is fact. That the legisla-
ture in authorizing this Issue violated
article 0, section IA of the Constitution,
which provides that the legislature shall not
create any debt exceeding u certain amount
except to suppress insurrection, repel inva-
sion or for the purposes of war"
These bords were issued pursuant to an
act entitled Van act 10 provide for the re-
funding of the public debt" passed March
IS, 1859, and the amount largely exceeds the
limit prescribed in the section of the Const-
tuition above cited.
1t is claimed. however, that these bonds
were not issued for the purpose Of creating
new debt but for the purpose of providing
ior the payment or refunding of an old one.
hieb Old debt was contracted for war pur-
poses and vas concededly consitutionally and
legal y Incurred,
lie qu .tion whether the legislature by
providing for the refunding of this old debt
aud authorizing the issuing and selling of
State bonds for that purpose violated the
Constitution, has been adjudcated upon by
the Supreme court of Maine.
The Maine Constitution, sec. Q of article
9, provides that the Supreme Judicial court
''shall be Obliged to give their opinion upon
important questions of law, and upon solemn
occasions when required by the Governor
council senate or house of representatives. "
In pursuance of this provision the Cover.
nor submitted to the Court the following
statement and question.
STATEMENT.
sI.74s, 900 of the bonded indebtedness OF
the State of Maine, issued by virtue of a re-
solve approved March 10, 1864, mature or
the first day of June, 1889
s2,ls7 400 Of the bonded indebtedness OF
the State of Maine, issued by virtue of ar
act of the legislature approved
March 7, A. d., 1863, (P. l.
1868. chap 225) as amended by act approv.
ed March &, A. ID. 1863, or. l.. A. ID. 1869
chap. 40) mature on the first day of October
1889.
In addition to this bonded Indebtedness
there is other outstanding inde btedness Of
the Sla,e of Maine amounting I, SS2, 900
The legislature of 1859 enacted an act en-
titled, IAN act to provide for the refIndlng
of the public debt" approved February 26
A. D. 1859. approved March IS h, 1889
(P. l. 1889, chap. 30s) copy Of which i,
he rewith submitted"
QUESTION"
"Is this act, (P. L. 1889, chap. 30s) con
stitu,ional, and would bonds issued by virtue
of Its provisions be valid?
Very respectfully.
EDWIN c. BURLEiGH,
Governor
The Court in answering this question art
unanimous in the decision arrived At and
holi that the act il constitutional and that
the bonds issued in pursuance thereof would
be valid.
Opinions of the Supreme Court delivered
upon the request of the Governor are con
sdered equally binding with opinions deliv
cred nv the Court in passing final judgment
10 Maine Reports as7 az Id 599; Prime,
vs.. Skilin II ID 39I ,3G5.
The Constitution in respect to the questio,
under consideration therefore has been ju Ii
eialy construed 10 reference to the question
in the State Of its adoption AMI existence
|, isa we'll settled rule that the construction
placed upon a statute or Constitution Of an 9th
or State by the courts Of that Sta,
be followed by the oourts in thi. State
Je.up vs Csrnige. 80 N. Y. al; Shelh
| vs.. Guy, II Wheaton 377; Town Of Sou,l
Ottawa VS.. Perkins, % L. s. 2C0, 2d7. Es
peeially is this rule applicable to the pre- sen
case wh.re rights sill become vested D
parties purchasing these bonds in this State
by virtue Of the decision Of the Maine court
above referred to.
| II appears therefore tha. the State O
Maine hs, issued these bonds. that the ID
snance thereof has been judicially declare
legal and valid: that the State Of Maine ha
never defaulted in the payment Of its obliga
! tions, and that our statutes authorize saving
banks 10 invest in such securities.
am Of the opinion. therefore. tha, saving
banks Of TIL, State may legally invest thei
deposits. etc. in the bonds Of the State O
Maine, issued pursuant to the provisions O
an act Of the legislature Of the State O
Maine entitled, "An Act to provide for th
refunding of the public debt, and 10 repea
an act entitled, An Ac; to provide for til
refunding OF tae public debt" approve
February ~, 1893, being chapter 313, Law
Of 1880. Very Respectfully.
Yonr ohed.eat servant,
Ed G. Whitaker,
Dep. Attorney General.
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