The Providence news. (Providence [R.I.]) 1891-1906, 1894-01-15
ITS C0NS|NU||0NAuIY.
Railroad Bonds Endorsement
Argued Before Court.
HEARING ON THE INJUNCTION.
The Right OF the City to Sign the
Guaranty Called into Qucstion-Both
Sides Presented Briefs In Supreme
Court Today.

The postponed hearing on the ex-parte
injunction granted December rs to prevent
the city from endorsing the bonds OF
the Providence and Springfield Railroad
company was given today before
Chief Justice Matterson and Justices Til
linghast, Rogers, Wilbur and Stiness. An
tioh was ana asked erms1sn' Sy the n'anS eo%-
plainants, Robert III. l. Goddard,
and other tax payers. A preliminary in
junction was at once granted by the court
and hearing set down for last Friday
which was postponed until today to suit
the convenience of counsel.
Rathbone Gardner for the complain
ants opened the case and stated in general
terms the conditions under which the COM
plainants felt compelled TO protest against
the signing of the bonds. He read the
petition for an injunction and fortified
1t with the several afiidavits that have been
filed since the petition was first pre-
sented.
Subsequent knowledge regarding the
route OF the road made 1t necessary to
withdraw the allegation regarding the
road in Connecticut. To this the other
counsel did not object.
"This is an application for a prelimin-
AIRY injunction, said the complainant's at
torney, (which the defendants have chosen
to set down for hearing upon affidavits
plainly containing much matter
that is irrelevant instead of
raising the underlying questions
by demurrer. The hearing, therefore, is
TO be governed by the general rule of pre-
liminary injunction. Grave questions OF
constitutional rights are involved
Mr.. Gardner stated in substance that
the question of the constitutionality OF
municipal aid to a railroad corporation
was presented for the first time; that the
power of authorizing municipal aid to
railroad corporations must rest on the
power of taxation; il must be for pub
lie as distinguished from private pur-
pose or enterprise; that the benefit must
be direct to the municipality where aid is
to be extended to the municipality; the
claim that there was some sort Of under
standing by individual members of the
city council that the guaranty
should be given is too absurd to receive
serious consideration; that the city coun-
Gil at the time the bonds were issued Ie-
fused to give such guaranty, and the then
holders of the bonds disclaimed any in
tention OF asking any such guaranty. The
general assembly and the city council
intended and understood that these bonds
II guaranteed by the city were to be Sc
cured by first mortgage upon the whole
railroad. 1t turns out that it is subject
to 99-years' lease of that road
to the New York and New
England, running 50 years beyond
the maturity of these bonds and which
leasehold is plainly subject to all the ex-
amounting to some 25,OOO,0 900. 1t is also
made a condition precedent to
the city's guaranty that the
bonds shall first be guaranteed by the
New England road as further security
in addition to the mortgage against loss
under its own guaranty. Its guaranty is
entirely valueless since the New England
has become utterly insolvent and is now
in the hands of receivers.
1t is further contended that the state
could not directly guarantee the bonds
without submitting the question to the
people. Hence the state cannot by indi-
rection through its municipalities do
what the constitution expressly prohibits
it from doing directly itself.
Case of the Defendants.
The defendants briefly state their case
as follows:
The complainants state that the act of
the legislature authorizing the same sis
unconstitutional and void, in that no
benefit or sufficient compensating benefit
either does, will or can accrue to the said
city of Providence or to citizens or tax
payers thereby"
This position is clcarlyjunsound.
1. The power OF the legislature to au-
thorize municipal corporations to aid
railways, is now fully established except
i'm those states i'm which there is an ex-
press constitutional prohibition of that
power.
2. The policy of the legislation is legis-
lative not judicial question; so also the
adequacy OF the public benefit is ques
tion of expediency for the city to decide.
The wisdom and propriety of the action
of the legislature and the city govern
ment upon these questions cannot be re-
viewed by the court.
3. The importance OF the Providence
& Springfield railroad to the city OF Provi-
dence and its citizens is manifest from
affidavits before the court.
4. The amendment to the bill filed jan
uary 9th, 1894, is n manifest confession of
the weakness Of the complainants' posi-
tion.
with Sec. 13 OF Art. Nv. OF the Constitution
of the State" is a manifest confusion OF
state obligations with those OF the city.
The Complainants In Error.
The complainants further object to the
proposed guaranty on the ground that the
original issue of bonds guaranteed by the
city, and to retire which the new issue
was in part authorized) have ''all
been paid and cancelled, and that
the extension OF said railroad TO said
East Thompson has been built equipped
and completed" that therefore the con-
templated guaranty 'is absolutely with
out consideration, and that said guaranty,
IL made, will enure not 10 the benefit OF
said city. In answer IL may be said that the
road extends into Massachusetts, and not
into Connecticut, and terminates at East
Douglas. The proposed extensions and
equipment of the road are by no means
completed as yet; the bonds have not
the city, cannot be sold in the present
market without ruinous sacrifice.
Their legal conclus ions are unsound. IL
g-.. a ,.f q