The Tucson citizen., 1902-05-20
BONDS
OF the Notorious Fraudulent
Narrow Gauge Breed
Held Valid
Supreme Court Decides That Tax
pduerS OF Pima CountU
Must Submit to
Robbery

Word was received from Washing
ton late yesterday afternoon that the
case of Murphy against Utter had been
affirmed This is the case where the
holders OF the bonds commonly called
the Pima County Narrow Gauge bonds
brought suit against the loan COM
missioners OF Arizona TO have the
bonds and coupons funded by the ex-
change OF Territorial bonds. Their ap-
plication was granted by the supreme
court OF the Territory and the bonds
ordered to be funded. and II Is this de-
cree which was affirmed by the SUI
preme court OF the United States. I'M
der this decision the loan commission
ers are ordered TO issue refunding
bonds to the amount of almost $780,
600, and Pima county will be called on
To pay the interest at per cent,
amounting to $4,000 a year. on the
bonds
All this will be for a road which was
never built In 1883 the legislature OF
Arizona passed an act TO promote the
construction of q certain railroad to
be built from Tucson to Globe accord
ing to the route set out In the articles
OF incorporation. Under this act $780,
900 of Pima county bonds were to be
issued and delivered to the ineorpora-
tors OF the railroad company ut once.
and thereafter $50, 900 OF similar bonds
OF the county were to be issued and
delivered as soon MS Ave miles of the
railroad were graded and laid with
ties and iron, and the railroad com
pany was to give the county an equal
amount OF its bonds. In 1884 some
trifilng preliminary work was done on
the railroad. but after receiving $5o,-
600 of the county's bonds all work on
the road was suspended. II was be-
lieved from the start that there waa no
intention in good faita to build the
road and the board Of supervisors re-
fused to pay any interest on the bonds
which had been issued. and no Interest
has ever been paid. In 1856 some
bond brokers from New York came TO
Tucson and canvassed the situation
and made some Arrangement with the
original incorporators OF the company
by which they succeeded 10 the rights
OF the original promoters, light
grade for ten miles was made and ties
and iron hid thereon. and an addi-
tional sio0s00e Of Pima county bonds
was then issued 10 the bond operators
after receiving which all presesase al
| further work Was discontinued and
never resumed,
! Suit was brought on the coupons
and was carries TO the supreme eosrt
LOT the United States. which tribunal
decided I'm 1894. In the case OF Lewis
VS.. Pima County. that the bonds and
coupons were invalid because OF laci
lof authority In the Legislature TO an.
sAorize an indebtedness to build rail.
road.
On June g. 1896, while n. @. Murphy
was Delegate to Congress from Ari
zona, Congress passed the funding art
amending and extending the provision
Of it's former funding act of June %
1880. The provision Of this fnndint
lact under which the bonds. as the su
preme court afterwards held. were val
idated. and as II now holds, must b.
funded. was that all evidences of in
debtedness Of the Territory OF Arizona
which had been sold or exchanged IL
good faith In compliance with th'
terms of the act OF the legislature b!
which they were authorized, shall b
funded"
In the suit to compel the funding Q
the bonds the defence was made tha
the bonds were secured under a pal
pable fraud on the part of the bon'
operators. and that no consideration
lenured to the county. as the road wa
never built, and that many OF tn
bonds and all of the coupons were II
the hands of the original bond oper
, ators. Testimony was taken AZ TO al
: the facts connected with the matte
from Its inception, and the estdenc
, was placed In full before the court.
I The decision compelling the fmndin
: of the bonds lis based ON the theor
that Congress is supreme as to tn
t Territories. and that whether tn
, bonds were good, bad or Indifferent
l Congress ordered that they should b
e funded and this mandate Is binding o
the court.
e An examination of the funding az
introduced and urged by Delegat
4 Murphy shows that 1t was worded S
:. as to make the funding OF these bond
imperative, and thus cut~out any dt
!. fence, no matter how meritorious
t might be. that could be interposed.
/, had been the established policy of Cor
n gress to leave with the Territories tn
i question OF funding. as the method
O paying Territorial Indebtedness is or
for the Territories to arrange as the
II see fit, but in TIE case OF thes
d bonds any discretion which IL
Territory previously had was take
- away. and the funding of the bone
made obligatory.