Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-05-31
RAILROAD BOND
LAW INVALID IS
COURT DECISION
Act to Reimburse Four
Counties and the Town OF
Silver City is Unconstltu-
. tionaI, Says Mechem.
(By the Taxpayers Association oil
New Mexico.l

New Mexico1
Judge Edwin Mechem, sitting Tor
Judge Holloman in the First 1uul-
cial district, has rendered judgment
declaring unconstitutional the law
of the 1921 legislature providing
for the reimbursement of Santa lie,
Grant, Luna and Hidalgo countess
and OF the town of Silver City TOT
Interest and principal payments up
on bonds issued i'll aid of railroad
construction, The case Will be APP
pealed to the supreme court.
/ The issuance of bonds in aid Oh
railroad construction in New Mex
leo constitutes an interesting chap-
ter in the history of the state
finances. These bonds were issued
by the counties of Grant and santa
re and the town of Silver CITY
thirty to forty years ago. Declared
invalid by the county, they were APP
proved and confirmed by congress
in 1897. In the meantime the rail-
roads were built and have been con-
Itinually in operation since coiis.i "a
tion. The counties, however loullu
lit impossible to pay the ponas, anu
a long struggle began TO get d sra,l :
of land from congress, the proceeuo
of which should be used TO reiLloso
1.-The burden on the counties. 2uC.
cess came with statehood "heA'
100000 acres of the punllc uo.
main was set aside for the puIpoS
of paying the principal ana az
crued interest on bonds OF Santa
and Grant counties. The Original
issues were as follows: santa re
county. 100000; Grant countg
/, s56' 900. silver City, $4,000; t0taI
s406 600. The first board OF loal
commissioners, consisting Oh th.
etate treasurer. the state auditol
and the attorney general, lssueG
state "series c. bonds to reiulo
the outstanding bonds, and the un,
naid interest thereon to the amour,
IF st.175.OOO, The annual lnteIee
| on these bonds amounts 20 $o-,et .
| and is paid out of the rentals a ,r,s,
| ing from leasing said LANDS az y,
| nroceeds of sales are set aside y
take up the bonds a soon as po os9
| ble beginning with Decempel' 80 80,
| A. the end of the eighth flscai yea
| There was an accumulation OF goo
| k3.3e in the fund to retire the poiiu =,
| consisting of s449,550 invested y
| securities and SS7,80S.39 on dep eea
| in tanks. During the ninth Iio.a
| r s59,3S1.SS was added nlahl a \
| ~ total in the fund NoVempel 4U
| Iy.1. available for retiring SCI ~. ~
| o. bonds nearly $60O,00O. vi 80
| 900 600 acres granted for retlfiil
| aser;es ~ bonds about 6OO'VV
| were under contract for sale at IN
| end OF the eighth fiscal year, 0U
| only $1,000 acres were oeeueu' %
In addition on NoVenloett ,oS
| 1921, there was balance OIL 49, ~
i27O.16. 1t can readily be seen '', 81
"series C" bonds can be nearly d,
! retired at the end of the presen
I wear, and save the. annual lhteiIs
i charge of $4,000. Considering u.
| fact that the surplus remalhlils =
| the proceeds of this land grant ~ W.;
| accrue to the benefit of the pun
| schools, the importance oil prope,,
| " handling these lands ana Lu.is
can be readily appreciated IL -,
lands are sold at the MN liIu,
I price Of SO an acre, it is pFopapl
II 900 will be added 10 Va
II permanent school fund, the ahilut
II Weld of which may amour. :
100000 annually for cuflei
/ school needs. -.
IL Under the terms of the gran,
Il has been found that only the ou
l. standing bonds and the inter- as
II could be paid from the pto'9 ~,
Il of the lands given the state -, 49,
municipalities desired to De rem
| bursed for the amounts PAID upo
J the principal and for Interest o.
after several years. congress b.,
consent, and in the legislative ~,
sion Of 1921 law was eiidC =,
W providing for the repayment 10 "
a town of silver City, ana the IOH H.
be ties OF Santa Fe. Grant, liu s,,s
n and Luna the last two COUNT, :,
10 having been created out oil u
is former county of Grant lne'
t. municipalities then prepared tne
"a claims to the board of loan Gun
missioners as follows: an
santa Fe .......$ SS,5S2.Vo
II Grant .....s...' o'1sS On
Hidalgo ........ ls'.iSnI
al Luna .......'.. 80, 90
Silver City $3.50. leo'o'i'0N
Total ,.......$3S2,273.66
IL The counties and Silver ~
were to be reimbursed IN "
| amounts shown by receivins go a
| Series CO bonds bearing inter- CIV,
al at the rate of 41a per cent II
y annual interest would amount