Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-12-03

tions issued to pay such cost, and the
interest thereon. And further, that
there shall be levied each year on al
i taxable property lying within the linn
its of benefit and protection of the
water works, after it's construction, q
water tax of five mills on the dollar, OF
so much thereof as may be necessary
together with the net proceeds of wa
ter rents collected, to pay the cost OF
maintenance, repair and operation OF
the water works and extensions and
improvements, and to pay any of the
purchase price or cost of constructing
said works, or of any bonds or mort
cages issued thereof, or interest there
on, which shall not be paid from the
proceeds of the two mill tax
1T was also provided that the pay
ment of the bonds and the interest
| thereon shall be secured mort
gage on the system of water works;
and to the payment thereof shall be
pledged the entire proceeds of the
| two mill sinking fund, and SO much
of the proceeds of the water rates and
rentals, and of said five mill water
tax as may be needed for the mainten-
ance, repairs, operations, extensions
and improvements of the water works.
Said ordinances further provide that
no part of the cost of said water works
or any of the bonds issued thereof
shall ever be paid out of the general
funds of said city, or out of any fund
or the proceeds of any tax other than
the property and funds specifically
named, and that such provision and
limitation shall be recited in the
bonds; and hence 1t is urged that the
transaction will not create any in
debfedness on the part of the city, but
| that the money borrowed by the city
from the purchasers of the bonds will
DC. only an anticipation by the city, for
It's present use, of specific revenues
which it has provided for, to accrue in
the future.
RMS contention of the appellant is
based upon a palpable jugglery of
phrases and can not be maintained
II It can. the constitutional provision
above quoted, which prohibits any mu-
nicipaiity from becoming Indebted be-
You'd the specified limit, in any manner
or for any purpose, is delusive and of
no avail to protect taxpayers.
The city has no revenue, nor means
OF raising money, except by levy of
taxes. 1t is admitted that ii the
scheme contemplated the payment of
the bonds, only from 2-mill tax which
was agreed to be levied year by year for
their payment, an Indebtedness of the
city would be created; but it is con-
tended that by making one levy now,
of any annual 2-miil tax, to be coll
lected off the taxpayers year by year
for fifty years, or till the bonds are
paid, and from which fund only they
are to be paid, no Indebtedness is Gre
ated, and that the borrowing of the
money, for which the bonds are nego-
tiated, is but simple matter of an
ticipating for present use the future
revenue, which will come from the tax
so levied, covering the future years.
We think the taxpayer in future years
will regard this scheme as q subterfuge
TO deprive him of the protection of the
constitution; and that the thought will
force itself upon him that city cre-
ates an indebtedness when it borrows
money to be paid with interest from
taxes in the future, whether such taxes
are formally levied at one time, cover
ing the future, or yearly, to meet the
"The creation OF indebtedness by an
individual is often effected by borrow
ing money for his present uses: and al
ways In anticipation of his future reve-
nues and resources. whether lle has a |
reliable source of revenue or 1t is only |
uncertain and hoped 2or. If he has al
reliable fixed income in property rent
ais, for example, and agrees with the |
lender that he win devote and set apart |
and apply In satisfaction of the loan all |
the rents-already fixed in amount
which he will collect from a specified |
building or estate, yearly. as he shall |
collect the same, and that the lender
g grees to be content with that arrange |
merlt, and that he will not seek to 9TH |
erwise recover the sum loaned, lis 1t not |
clear that the borrower is indebted to
the lender until the loan is satisfied by |
The rents agreed to be APP |
piled are owing by the tenants to the |
borrower. When paid by the tenants
the money belongs to their landlord, |
the borrower, and never belongs to the
lender until paid over to him by the
borrower; and then and not before it is
applied to the satisfaction of the loan. |
IL Tic bOIIoWcI Siiouiu uilCi iGSSi'ii6
such rents fail to pay the same to the
lender. the latter should become re-
leased from his agreement to wait for
the rents, and should proceed against
his debtor generally. This supposed
case is practically analogous to the
scheme of the city Of Ottumwa which
we are considering.
Appellants contention amounts to
this: That Notwithstanding the consti-
tutional limitation referred to, and that
the city being already indebted beyond
the limit, has no power, even with leg
islative sanction, to incur any new In
debtedness to the amount Of a single |
dollar, 1t may nevertheless borrow
to the amount of 100000 issuing
it's negotiable bonds therefor, with in
terest, contracting to pay the same at
specified dates, and that this will not
create any indebtedness, If it shall at
the same time levy taxes to be collected
annually from the taxable property of
the city for long term of years, or in
definitely till the sum borrowed is paid
and provided, that the
bonds shall be paid only from the taxes
so specifically levied. If this may be |
done to build water works the city may
go on and in the same way borrow and |
issue Its bonds for an equal amount to |
build public buildings, and for another
equal amount to construct a system of
sewers, and for another equal amount |