Ottumwa tri-weekly courier. [volume] (Ottumwa, Iowa) 1903-1916, 1913-08-19

otherwise, that make up the whole
article, ] can not assume and do not
feel that II said section 3, article 2.
was followed by, or In any manner con-
nected with a section like section of
article Z, only modified in form to APP
ply to municipal indebtedness, the
decision In the Swanson case would
have been as 1t Ia, Section 3, article
IL stands alone and by itself, and nust
be read by itself--anyhow 1t was read
by itself In the Swanson case; while In
this case sections 2 and of article Z,
the sections that pertain to state obli-
cations must be read and construed
together, And In the acts that create
state obligations under said section 5,
continuing special annual tax must
be levied, sufficient In amount to pay
the principal OF, and interest on, all
such obligations within twenty years;
and the funds arising from such
such special levy can be applied to
no other purpose than such payments;
should be issued under such an act,
the levy would be irrepeable. That is.
obligations created against the state
under that section, though provided
for by such hxed, certain, ample and
irrepealable continuing levy. are In the
section named debt" The word
debt" In section 2 means undoubtedly
the same as In section 5. And the
point, that the decision In the Swan
son case turned on-that moneys" the
receipt Of which IL thus assumed
(by continuing irrepealable levy are
regarded as for all practical purposes
already in the treasury, and contracts
made upon the faith thereof are treat
ed as cash transactions. So long as
any particular fund has cash In the
treasury, or taxes which can be legal
ly anticipated for its benefit, no ap-
preparation thereof within the limits
of such actual and prospective revenue
will have the effect to create an In
debtedness--cannot In view Of section
| S, article I, be given effect In this &C.
ton. do not want to be understood
as critising the Swanson case, or in
declining to hold contrary to 1t. on
ly say, that neither said section 3, nor
any other section of similar import
has any necessary or direct bearing on
the section construed In the Swanson
case; while in this case that section
Genominates obligations on "all fours"
with the obligations herein In ques-
ton, debts. What has been said here
relative to the Swanson case applies
with equal force and vitality to the
large number OF county and municipal
cases In other jurisdictions, cited at
the hearing and on the briefs an
nouncing the same principals as are
announced Id that case. They are
founded upon similar constitutional
provisions as the Swanson case. and
none of them are bottomed upon con-
stitution provisions similar to sections
and s OF article Z involved In this
| case. However, there were a large
number of cases cited, which held that
bonds issued by municipality for i'm
provements payable solely out Of spec
ial assessments upon property bene-
fted are not within the debt limit
generally held that no debt 10 con.
tracted by the municipality to be paid
by It. The debt 10 to be paid by the
property benefited, that IL. from the
funds of ildividuals, and not from the
funds Of the municipality. The loan
In such cases IL really to the owner OF
j the property benefited. The munich
patty acts merely as an assessing and
collecting agent. A full performance
Of the obligation Of the municipality
under such law involves It in no I'm
ancial liability. The individual prop
erty owner who is benefited pays the
debt. 1t ID through breach OF Ito
obligation, and not by performance
OF 1t, that the municipality incurs q
financial liability. There Is no analogy
between the principle upon which
these cases are founded and the case
at bar. Under the act here In ques.
ton the state itself Is the borrower.
!. 1t borrows for its own use, and II
promises to repay the sum borrowed
! with interest, and from Its own funds.
/ The act provides for payment by the
state, and not payment by individuals,
as in the case of special assessments.
1t requires no argument to show that
this is a promise of the state to pay
| the principal and the interest, and II
is promise to pay out Of the state re.
be discharged by a resort to taxation
The fact that portion Of the debt
may be paid from the sale OF govern
ElcHt SQuAIS duu TcutS w uOl CudukS
I the character of the obligation, OF
alter its effect upon the state. The
& important fact is that it Is paid b.,
the state and from its resources. II is
not important from what fund 1t Ia pay
able. The result would be in every re
spect the same If payments were made
directly from funds derived from gen
eral taxation instead of special tax
levy. Without attempting to classify
these nstruments-interest bearing
warrants or certificates it is entirely
apparent that they evidence a state
debt, every dollar of which both prin
Icipal and interest, must inevitably be
repaid by resort to taxation and the
taxpayers stand the burden. The
Swanson case announces the law in
4 Iowa, upon the question therein deter
minded, but the supreme court
iof some twenty-five states In the
!: union, do not coincide with
these views, and held directly op
posite to them. The United States cir
/. cult court OF appeals of this circuit
Judges Sanborn, Thayer and Lochren
presiding, In the case Of City Water
/ C,nn1,y M x,c oify re TNf<unvo 40