The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-10-15
A WRONG DECIsION.

The Hon. F. A. Reeve, Solicitor of the
Treasury, has recently rendered an ex-
traordinary opinion. A certain county in
Georgia being about to issue county bonds
Of denomination as low as 81 and 81, to be
used as local currency, asked the Secretary
OF the Treasury for a ruling as to the
legality of such an issue. The Secretary
referred the matter to the Solicitor of the
Treasury. who. in his reply, says:
/ have the honor TO acknowledge your
reference to a letter addressed to the Con-
troller of the Currency by Mr.. r. g. Clark,
OF Rome, Ga.
Mr.. Clark states that the County Com
missioners of Floyd county. Georgia, pro-
pose to issue q certain amount in county
bonds, 4 per cent. interest, in denomina-
tons of five. ten and twenty dollars, with
a view of using the same as local currency;
and he inquiries whether such action would
conflict in any way with United States
banking laws.
In response to your request for an ex-
preston of my opinion, havesto advise
you that no statute of the United States
prohibits the issue OF county bonds in any
denomination. A county has a right TO is
sue bonds when not i'm contravention to the
Constitution of the State. Ii may be OBJ
served, however. that Section ls or the act
vides: THAT every person, firm, associa-
ton other than national banking assocla-
tons, and every corporation, State bank
or State banking association shall pay a
tax Of 10 per centum on the amount OF
their own notes used for circulation and
every such person, firm, association, cor
pcration. State bank or State banking as
ISOLATION, and also every. national banking
association, shall pay a like tax of 10 per
centum of the amount of the notes Of any
person. firm. association other than ma
tional banking associations. or of any cor
poration. State Bank or State banking as
ISOLATION. or of any town, city or municipal
corporation, used for circulation and paid
out by them"
1t will be seen that the word county is
not enumerated among the corporations.
banking associations. etc., mentioned In the
statute. Nor can the word notes be held
to include county bonds; and / am, there
fore, also of the opinion that the proposed
issue would not be taxable under said
statute.
laws of the United States do not prohibit
the issue of county bonds of any denom-
nation, but such bonds cannot be made a
legal tender, and if issued or used for cir
~culation they are subject to the temper
cent. tax imposed on notes issued by any
municipal corporation. The Solicitor of the
Treasury holds because the word "coun-'
ty' is not enumerated among the corpora
lions whose nOteS, IL lSSucu lux SICufdiioH,
are subject to the tax. that therefore the
law does not apply. He implies that a,
county is not a municipal corporation,
whereas it is as much so as is a city. The
term municipal corporation as used in
the law. is synonymous with public corpor-
alton, and includes counties as we'll as
cities and towns. The Solicitor is a lawyer
from Tennessee who is afflicted with the
cheap money heresy, and not overburdened
with legal knowledge. His anxiety to give
effect to the demand of the Chicago plat
form for the removal of the prohibitive
tax on State bank notes has led him to
make a dangerous and unsoLud decision. 1t
is safe to predict that Secretary Carlisle
will not permit the opinion 20 go out as
the ruling of the Treasury Department.