The daily times., 1922-02-22
COURT MUST PASS
ON VALIDITY OF
THE FINANCE ACT
BOND SALES HINDEREI
6ONO SALkS HlNOkNED
With the News Reaching Will
son that a New York Bond
Attorney Does Not Think the
Municipal Finance Act Leg
al Towns May Find it Hard
to Sell Their Bonds.
(By Max Abernethy).

(By Max Abernethy).
Raleigh, Feb. 22.-The capitol to-
day had not recovered from yester-
days shock telling Of the unconstitu-
tionality of the State Municipal Fin
ance Act and the attorney general and
the supreme court will again be call
ed upon to pass upon the question.
Although it makes but little If any
difference even if the States highest
court holds the act valid SO long as
the bonding companies refuse to buy
the bonds of the municipalities and
there will be but little help in carry
ing out proposed improvements of
the cities and towns. The court may
hold that the law is valid but the
supreme court does not buy bonds;
the New York companies do and
that's where the rub comes.
These New York bond dealers have
held, or at least some of them have,
that the act was not properly passed
and therefore is unconstitutional.
They will not buy bonds of North
Carolina cities which have to be
issued under the act. All of the court
rulings may be one way without
changing the opinion of the bond buy
ers.
1t is useless to point out that the
municipalities are disappointed over
the sad news. Mayors and finance Of
fcers had the time of their lives con-
vincing Governor Morrison last year
that a special session of the Legisla-
ture was necessary to correct defects
in the finance act. 1t was finally done
and the legislators came to Raleigh
in extraordinary assembly and at
tempted to fix things up. They So
journed at the capitol at $1,000 per
day for 5 days to make the act
valid. Now the word comes down to
the city of Wilson that the $125, 600
street improvement bonds issued un-
der the amended 1921 municipal fin
ance act can not be sold because the
act was not passed three times by
both houses as required by the State
constitution.
Governor Morrison will not be ex-
pected to call another special session
to fix things; the regular session
meets next January and if the bonds
of the municipalities cannot be sold
now they must be held until the 1928
lot uofhorc
Material amendments offered to
the measure by Representative Grant,
of Davie, between the second and
third readings in the House, the
fact that it was later recalled from
the Senate, reconsidered and placed
on it's second reading in the House
On the same day of the recall, are
the elements that are disquieting the
bonding attorneys.
Attorney General Manning has ad-
vised one such firm that the legality
of the act is beyond question, and
that bonds issued under it's authority
are legal in all particulars. One
legal firm has advised clients that
the measure is valid, and others have
held that it is invalid. The matter
|appears destined to come to the
courts for final settlement.
The State Supreme Court has al
ready passed Informally on the val
idity of the act. A joint committee
from the General Assembly laid the
act with all of it's amendments, and
the condition of the Journals of both
houses before the court in conference
before it's final passage. Its defects
were noted by the court, and correct
ed by the General Assembly.
To make sure that it had done
everything possible in the matter OF
corrective legislation, the General As
sembly took the precaution to correct
the invalid act passed by the regular
session in 1921. II the new act pass
ed IN December is declared invalid,
Continued on Page six.)
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