Watauga Democrat. [volume] (Boone, Watauga County, N.C.) 1888-current, 1928-01-05
WATAUGA TOWNS WARNED
AGAINST ISSUING BONDS

AGAINST ISSUING BONDS
This is United States court de-
cision. Boone and Blowing Rock
should figure carefully on their
ability to pay before issuing any
more bonds"
The above paragraph is taken from
letter from Mr.. w. w. Stringfellow
of Blowing Rock and Admission,
Ala, in which he enclosed a decision
of the United States circuit court of
appeals relative to the payment of
bonds issued by the town of Sam
son, Ala. The decision, which may
be of interest to the taxpayers of
Boone and Blowing Rock, as related
in the Birmingham Age-Herald of
December 27, is reproduced here
with:
THE United States circuit court
appeals may not be able to convince
the average Alabaman that bonds
cost the taxpayer money, but prop
erty owners of Samson, Ala, have
been convinced beyond doubt.
In a recent decision, this court
ordered the town Of Samson to tax
it's property owners on a 100 per
cent valuation and going even fur
ther the court ordered that such tax
go back three years. In other words
the United States circuit court Of
appeals has not only raised the taxes
of the property owners of Samson
approximately sc per cent, but has
made the raise retroactive.
In 1909 the town sold bonds to
build water and light plant. Default
was made in the payment of the
bonds, receiver was named, the
plant was sold and a small amount
was realized for the bondholders.
But l. L. Perry, one of the bond
holedrs, was not satisfied with this
small amount and he wanted not
only his principal, but the full
amount of interest and now the
property owners of Samson must
pay the interest on every bond and
retire the principal.
When city, county or state issues
I bonds, a lien, or mortgage, Is put
upon every piece of property. The
mortgage is even stronger than an
ordinary mortgage, it is pointed out,
because an ordinary mortgage is
made with the consent of the proper
ty owners while bonds are mort
gage, whether the property owners
like it or not.
THE following letter from G. D.
King, clerk of the town of Samson,
to the property owners of the town,
is proof that bonds must be paid:
I'm the year 1909 our town sold
bonds for the building of water
and light plant. Default was made
in the payment of interest on these
bonds The plant was placed in the
hands of receiver, and eventually
sold by the courts, paying these
bonds small sum.
Zone |. L. Perry, a bondholder,
reduced his bonds to judgment in the
federal court The town of Samson
took an appeal to the United States
circuit court of appeals at New Or
leans, but lost, and it was ordered
by this court that the town of Sa,
son levy a tax on 100 per cent
valuation Cnstead of 60 per cent
valuation as we have been doing)
and that the proceeds from the
extra 40 per cent assessment be set
aside for the payment of l. L. Perry's
bonds, and the decree says that we
shall go back to 1925, 1926 and con-
tinue until the debt is paid. . o.. :"
"The taxpayers of Samson have
had their taxes raised to 100 cents
on the dollar by federal court, and
they must go back and pay three
years taxes at this figure. The peo-
pie of Samson have found out
through experience that bonds con-
stitute first lien or mortgage on
mans home and that the courts
! can increase property valuation up
to 100 cents on the dollar of valua-
tion and can make such increase
| retroactive"