The Houston daily post. [volume] (Houston, Tex.) 1886-1903, 1898-03-30
III Attorney General Has Not Yet
Decided the Question.
WILL BE LEFT 10 HIGHER COURTS
Case Vow before Fort worth Court
OF Appeals, Dcctsion Of which
VIII settle Matter.

+ COunttcS nut uluulCipdt wi poi hboiior no =
the power In this State to issue bonds
payable in gold, 1t Is In order TO repeat
what has previously been published In
Tho Post on that subject, namely, that
although the question has Been presented
to Mr.. Cranes department 1t has not as
yet been passed upon and will In all prob
ability be held UP there until the higher
courts dispose Of 1t, they having been af-
forded the opportunity to do SO in a case
now pending before the Fort Worth court
Of civil appeals. in which the authority
Of tho municipality OF Fort Worth to OBJ
ligate itself to pay gold in liquidation Of
bonded Indebtedness Is disputed.
1t has heretofore been Tie custom and
policy OF the attorney generals depart
ment OF Texas TO approve gold clause
bonus, there being no statutory nor con-
stitulional prohibition against the issuing
OF such bonds by cities or counties, anu
no one having up to short time ago
thought of questioning tile validity OF So
curities Of that character but since the
ISSUE has been made enough doubt has
been created In the premises to cause u
halt to be called until the matter can be
thoroughly investigated.
The contention or those who deny tho
validity of gold clause bonds is that the
authority to issue them must necessarily
be accompanied by authority to require
the payment of taxes In gold which Is
not possessed either by cities, counties or
the State. and, furthermore, that the Is
suing OF gold bonds. the acknowledged
excuse for which Is 10 enhance the mar
ket value OF the obligation, would operate
In the direction of discrediting bonds pay
able In legal tender money and prac
stically create several classes of bonds. one
more valuable than the other
Z The answer to this Is that In promising
20 pay In gold cities, counties and States
10 not obligate themselves to pay In
money which Is at q premium, but simply
agree to liquidate their indebtedness in u
certain kind OF legal tender and that no
greater burden of taxation is imposed upon
the taxpayer in consequence than IL tie
gold clause were not Inserted, the prac
teal effect OF the insertion of said clause
being III most instances to facilitate the
disposition OF the bonds at lower rate OF
interest than would otherwise be pos
sible.
Those who question the validity of gold
clause bonds rely upon the decision of the
ohio supreme court In the City OF Gin
tdnnati ex rel VS.. Anderson ct al; upon
tho decision of the Mississippi supreme
court in Woodruff vs. Mississippi. and
upon the decision of the Tennessee SUI
premo court In Burnet Vs. Maloney.
In City Of Cincinnati. ex rel, VS. Ander-
son ct al, the supreme court OF Ohio held
that the city had no statutory authority
to issue gold bonds and that considering
previous acts of the legislature in reia-
tion to Issuing bonds the law making
power hnd never intended to grant such
authority Unfortunately, because OH
stated occasions when 1t had desired to
permit the city to obligate itself 10 pay
gold In discharge Of its obligations II had
specifically conferred authority to do so
by statute.
In Woodruff VS.. Mississippi the supreme
court OF Mississippi held THAT when AN
act to redeem and protect from overflow
from the River Mississippi certain bottom
lands herein described. approved March
~. 1871. was passed and when the bonds
embraced in this suit were issued. gold
coin WINS not the basis OF the business Of
the country. 1t was money but of such
greater value than the circulating me-
dun, consisting OF United States TREASURY
notes and National bank notes
In authorizing the issuance of bonds for
one million of dollars and in the use OF
the term money the legislature must be
supposed to have meant in the ant cited
that money which constituted the basis OF
the general business of the country and
WIS a legal tender for the payment Of
This case was reversed in the United
states supreme court on the ground thai
although the leyee board OF NJ ssissip,i
which isused the bonds In controversy
acknowledged itself indebted in gold, Il
promised to pay In dollars. |. O.. dollars
OF any sort, and that therefore even und n
the mississippi courts construction of Its
statute the bonds we're valid,
In Burnett vs. Mnloney tho decIsIon ~
the supreme court OF Tennessee was given
ny divided court three Justices against
two, The authority OF n county 10 issue
bonds nayable PRINCIPAL and interest In
gold under an act authorizing IL TO .lssue
bonds' WAS questioned and the majority
OF the court called attention to The fnnt
that all tho cases cited, with one excep-
lion In favor OF the validity of the gold
clause, involved bonds issued by munici |
pal CORPORATIONS, and held that there Is a |
wide difference between tho powers OF |
and county CORPORATIONS under |
similar acts OF the legislature. ana en- |
arged upon the narrow powers or counties |
~ compared With cities and other muniej- |
pal corporations which operate unaer |
'harters, naRing the whole case on tho dr. +
'serence between the two classes OF o. |
iFors.
In favor Of tho validity Of pold clause
bonds the following cases are cited. Jrd. |
ION va. City OF Alabama. 81 Alabama eio. |
Farfon. Leach a CO. vs.. Board on Com.
nissIoners Of Sinking Fund OF Louisyi,'e.
y Kentucky. 119: Packwood vs. Ritt,tas
;onntv, is Washington. SO: Yesler Va. ctsv
Y Seattle. Washington, sos: HeIlbcrn IA.
Mayor ~ Cuthhert. 81 Southeastern Re.
'0rter goa (GeorRla,: Moore vs. CITY az /
NALL Waila, go Federal Reporter. 9Gl. aud
In all these cases the opinion OF the
ourfs ls that cxnrfss md general power |
Issue Negotiable bonds, In the ahsenro
y y. legislative restriction. oarries tho -im-
He'd or Incidental mower to make them
ayable generally. thpt Is IN currency
Ihich v c0nstItutionally lega, tcrder,
: pavnhlo IN thc particular coin which
ngpfitutea the leraI and commercial
'Hndard by which tho value OF the other
lrds Of currency II measured.
the Feneyal rule Il that cnrpor,tlons
ron Thichi s conferred the power 10 rive
'cuTitls~ may exercise such power In tho
ps!'e mode ana manner as natural persons
~ rpdry similar circumstances. there
ssnf ~ lesjsiatlve restriction nor spe-
f!cftinn az particular mode. Accord
n n the supreme court RI Tesas munIci-
s1!lltisn sre ye'''ntsry corporations wNose