The Chronicle-star combined with the Moss Point advertiser., 1949-11-18

NAAN
provisions Of this act shall be
deemed to be a contract with the
holders of any bonds or other
obligation issued pursuant to this
act
Mr., Khayat, as a banker, knows
that the security dealers who pur-
chased the bonds do not consti-
tute the holders of the bonds
where reference is made TO out
standing bonds and where refer
ence is made in the law to the
holders of any bonds issued pur-
suant to the act. He knows that
advertisement preceding the sale
of the bonds contained this para
graph:
"By resolution of the Board
of Supervisors of jackson Coun-
ty adopted March 81, l949, this
two mill tax Will be collected
on all taxable property in Jack
son County, Mississippi, inelud-
ing homesteads, for the year
l949 and subsequent years"
He knows that such holders or
owners of these bonds arc the
investors;-individuals or insti-
tutions which have purchased
these bonds from the Security
Dealers for investment purposes;
and that the pledge to collect the
tax and the pledge of the pro-
ceeds. of the tax to the service of
the bonds and the contract of
the law was made to and is with
the investors who buy the bonds
and not with the Security Deal
ers.
III. Mr.. Khayat says that
legal authorities whom | have
contacted, etc" The Port Com
mission knows and MI. Khayat
and the Board Of Supervisors
know that, when this action of
reputation was about 10 be taxi
en-, the legal adviser Of the Board
advised the members of the Board
that it had made a solemn and
binding commitment and that in
his opinion il was mandatory that
the Board certify the collection
of the tax. Such opinion from the
Boards legal adviser and the
opinion referred to by the At
torney General is supposed to
control the action OF the Board.
~. Mr.. Khayat admits that
the Board, on March 81. 1919
"did pledge and dedicate, to the
payment Of the principal and in
terest on the Port Bond Issue the
entire proceeds Of the two mill
state tax on each dollar of the
total assessed valuation of all of
the taxable property in Jackson
County, Mississippi as levied un-
der the authority of Chapter 209,
Laws of Mississippi, 1884, now
Sections 7577-7589, both inclusive
of the Code of 1912"
MIR Khayat knows, with this
admission and recognition, that
the adoption of his motion was in
Reputation of the solemn obliga-
ton of the Board, the pledge
made in the bonds, the contract
with the bond holders and the
opinions of the Attorney General
and of the legal adviser of the
Board.
He sets out three reasons, num-
bered Cd, ~ and CD, which lac
claims excuses him and the Board
from morally violating this
pledge;
Cd There will be a sufficient
collection Of taxes to meet bond
payments without making the col
lection from homestead exemp-
| tionists.
II is not within the power of the
Board of Supervisors to levy 9
tax for bond purposes from which
a certain class Of tax payers would
be exempt from the payment
This tax is levied by the Legisla-
ture ana it is not within the power
Of the Board of Supervisors &c
prescribe the group from whom
it shall be collected or the group
who would be exempt from is
payment since the Legislature
says that it shall be levied on ali
! property and the Attorney Gen
eral says il is a bond tax and
shall be collected from all tax
payers, whether home owners OF
not.
~ That as set out above, the
bond buyers did not rely on the
pledge to collect the two mill levy
on homesteads when they pur-
Nchased the bonds.
The Security Dealers who pur-
chased the bonds were not the
bond holders or the bond owners
TO whom the pledge was made
and with whom the contract was
] made by the Legislature when the
law was passed and the tax was
levied.
% Mr.. Khayat says the sale
Of the bonds was at a loss of APP
proximately S1l 900 90 and, he
says, since the bonds were sold
at q loss there would be no obi
CATION TO certify the collection OF
the tax TO pay them.
The bonds were not sold at a
loss, but if they were, such sale
would not relieve the Board from
its solemn and contractual obliga-
ton. The bonds we're sold at a
! discount Of Sill 10000 TO the dam
1 age OF the port improvement pro-
gram in providing that much less
money than was needed in the
! construction program.
Mr.. Khayat knows that on
April II, 1919 the bonds were
ordered sold to three Security
Dealers from New Orleans and
that Mr. W. B. Herring, the Pres
ident of the Pascagoula<Moss
Point Bank, acceptable to the
City and to the proposed purchas-
ers, was appointed Trustee in the