The herald and news. [volume] (Newberry S.C.) 1903-1937, 1913-09-12
COURT lJPHOLDS The
REDEMPTION ACT
COMMISSION MAY PROCEED WITH
REFUNDMENT.
Supreme Court Declares Act Authori-
zing Refundment is COnstitu-
tiOnal-Points Considered.

Columbia, Sept. S-Act Of 1912
providing for the exercise by the State
Of South Carolina of its option to call
in and pay the whole or any part
of the brown bonds and stocks, issu-
ed under a special act allowing the
redemption, was declared constitu-
tional by the supreme court yester-
day, in a decision by Associate Justice
Hydrick. The test suit was brought
by W. W Ray.
"It is therefore ordered that the
commission be at liberty to carry out
the provisions of the act of 1912 in
accord with the views and principles
herein announced" concludes the de-
cision.
''That provision of the act was in
tended to make the sinking fund
cumulative, only until the time should
arrive for the final redemption of the
bonds and stocks for the payment Of
which it was set apart, when, of
course, it was intended that it should
be used for that purpose. That time
has arrived, and, by the express terms
of the act, the State now has the right
to call in and pay or redeem the
whole or any part of the bonds and
stocks issued under the act. There
fore the commission should cancel the
bonds and stocks so redeemed.
Action for Injunction.
On January of this year this ac-
ton for injunction was begun against
the former members of the sinking
fund commission to test the constitu-
tionaIity of the act of 1912, and the
authority of the commission thereun-
der to pay or refund certain outstand-
ing stocks and bonds, and the validity
Of a resolution of December %, 1912,
in order that all questions as to the
validity of the bonds and stocks which
may be issued by the commission may
be finally determined.
According to the decision the act
provides that the sinking fund COM
mission, which is composed of the
governor, the State treasurer, the
comptroller general, the attorney gen
eral, the chairman Of the committee
on finance of the senate and the chair
man of the committee on ways and
means of the house Of representa-
tives snail have authority to exercise
the option reserved to the State in
the refunding act of 1892 GA Stat,
24) to call in and pay, at the expira-
ton of 20 years from the date of issue
thereof, the whole or any part OF the
bonds and stocks issued hereunder,
dated January 1, 1892, and known as
redemption brown consols, and for
that purpose that the commission
shall be authorized to issue and sell
4 per cent bonds and stocks not ex-
ceeding the aggregate outstanding
amount of the bonds and stocks that
have been or may be issued under
said act of 1892, and certain previous
refunding acts which are specifically
mentioned.
During the year 1912 the commits
sion passed several resolutions and
took some steps preliminary to
carrying out the provisions of the
act. Hon. W. L. Mauldin, who was
chairman of the committee on finance
of the senate, died before either Of
the meetings of the commission here
in mentioned was held, and thereby
a vacancy in the commission was ere
ated. On October 80, 1912, the COM
mission passed a resolution that its
clerk ascertain what amount Of the
sinking fund would be available on
January 2, 1913, for retiring the
brown consols, and that, when the
amount was ascertained, the neces-
sary steps be taken for calling in the
bonds to collect the amount thereof
to be paid off and retired That res
olution was adopted at a meeting OF
the commission attended by four of its
members and its validity has not been
questioned. On December 2, 1912, in
pursuance of that resolution, the State
treasurer, who is the secretary and
treasurer of the commission, publish
ed over his signature, as State treas
urer and treasurer Of the commission,
in financial paper in New York and
in two daily papers in this State a no.
tice to the holders of redemption
brown bonds, issued under the act of
1892 and numbered from 3781 10
1919, both included, to present the