Fort Worth gazette. [volume] (Fort Worth, Tex.) 1891-1898, 1892-03-15
Corporate Bonds and stocks.

Corporate Bonds and Stocks.
The credit of Texas is more or less in
volved in the execution and circulation of
every bond, obligation or certificate by any
corporation deriving its franchise from the
| state That both private and municipal
corporations have violated their obligations
| to the public in many instances to the dis
credit of our state cannot be questioned.
| The time has arrived in the progress of
civilization when the government itself
| should be careful and Just enough to pre-
vent its corporate creatures abusing their
privileges TO the injury of any citizen.
| There is no greater franchise committed to
her private and municipal corporations than
| the power to raise revenue. All those Of a
public or quasi public nature must resort to
some method of taxation by which to col
lect it
The state has granted to her public high
ways the power today rate tax upon the
traffic of the country for the purpose Of
raising revenue for their legitimate cor
porate purposes: and it has delegated to the
county, city and town governments the
| power to tax the people for local public
| purposes alone. Without the states con-
| sent, expressed through soma law, the col
lection of money by such corporations
would be unauthorized and Illegal. When
ever any of those corporations go beyond
the purposes for which they were created
in levyirg taxes or collecting tolls, they
abuse their privileges sDd franchises. If
the state knows this and fails to apply the
necessary corrective, then she violates her
functions of government, to the injury of
! the people. That she has, for the lack of
proper laws, permitted the extravaganza
reckless issuance of fictitious bonds and
stocks by her railroad corporations is
matter of public notoriety That she has
not been strict enough in keeping county,
city and town governments within their
crb in T. n
bonds and scrip is equally true and well
known. Her obligations to the people at
home and abroad bind her now to check the
growing evil by legislation that will make
It's repetition impossi6le.
Extravagance in building courthouses
and jails by counties and public halls by
cities and towns beyond the necessities of
the times must be viewed with feelings of
regret by every citizen when he contrasts
them with the educational institutions near
by. Taxes, on account of such extravagant
debts, must necessarily be high. Condi-
tions in this respect are becoming burden
some now in some quarters. The counties of
this state now have outstanding S7000,000
and the cities and towns over $l0,0O0,000 in
interest-bearing bonds against them. While
the state levies Is cents for general revenue
and 121S cents for free school purposes, or
the aggregate of 2I1S cents, on the 500 val
uation of property, some counties levy and
towns and cities levy and collect six to eight
times more than that amount. Many small
towns and so-called cities have issued bonds
far beyond their capacity to pay within the
bounds of legitimate taxation. That repu-
diation will follow or that litigation will be
vexatious and continuous in resistance to
these bonds is inevitable. Many of them
are afoat now in the hands Of innocent pur-
chasers who have invested in this class Of
securities upon faith in the credit and honor
of the state. As result they have reaped
no return or reward from the investment
except disappointment aud regrets. Moth
ing better could be expected as result
from system of laws that
PERMITS EXTRAvAGANCE
in the issuance Of public securities of any
class. 1t has become a common thing in
the past few years for cities, counties and
towns to issue bonds for so-called public
purposes in excess of their ability to pay if
not in violation of the constitution. The
communicating influence of such bonds, with
the name Texas" upon them, though they
may be put forth by one of her small sub
divisions, is felt by every valid public Sc
curity sought by other counties and cities
of the state to be placed on the markets OF
the world. In proportion to the suspicion
that may be aroused by few abuses or
acts of default or Reputation, either upon
real or technical grounds the confidence of
investors in all securities emanating from
any municipality or county within the state
is shaken.
Unless restrictions are placed upon the
issuance of such obligations, SO that they
may be confined to necessary public pur-
poses within constitutional limits, the peo-
pie may expect to suffer humiliation and
continued loss. No bond should be per-
mitted to issue or circulate by county, city
or town bearing any doubt as to its valid
ity When they have the seal of the gov
ayr, or. ir-ic
them, absolute verify should obtain, and
the faith of the corporation issuing them
should be pledged irrevocably to their pay
ment
At best the issuance of bonds by any sub
division of the state or a municipality is of
questionable propriety; and If they have to
be issued, they should have the stamp of
honesty upon them SO that reputation
could not follow.
1t would be well. therefore, to strengthen
the law limiting the amount of bonds that
any county or municipality may issue. so
that they cannot under any circumstances
exceed the limits prescribed by the consti-
tuition; and require that all of them, before
they shall be placed upon the market for
sale, shall have their validity tested and
certified to by the encouragement, and be
duly registered in the comptroller's depart
ment. In addition to this, it would be vol
to provide that after they had in these re-
spects complied with the terms of the law,
their payment shall become absolute and
shall never be contested. This will immedi-
ately guarantee the unobstructed sale Of
such secu- tiles bearing reduced rate of
interest, and promote economy and justice
as well
While extravaganza exists in the issuance
of county, city and town bonds, it is quite |
Insignificant compared to the reckless, |
profit gate issuance of bonds and stocks by |
our railroad corporations. The railways |
in this state have outstanding against |
them $40, 000 600 III bonds and stocks, an |
amount equal TO more than one-half the |
assessed valuation of all the property within |
the state, including the railways them |
selves, or SIS, 200. 900 more than the total |
assessed value of all the lands in the state, |
excluding town lots, Many roads have |
bonds and stocks amounting to more than |
$50, 600 10 the mile, when they cost less than /
% per cent of that amount.
When it is known that in her munifcence |
the state of Texas granted railway compa- |
MES about IS. 900, 600 acres Of land, besides |
other valuable privileges, and that the peo- |
pie were liberal in granting them rights Of |
way and generously contributing Of their |
private means to aid them. it does seem /
that such attempted encumbrance of our |
commerce is unjust and displays bad faith, |
to express It mildly. These bonds are is
sued reckiessly without restriction, and in /
most. instance. fctitiously and without |
consid GRAFTON, and are hoated on the may
kets of the world bearing on their face /
the supposed authority OF the state. They /
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