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L. XLII. NO. 135 NEWBERRY. S. C., DECEMBER 1. 1905. TWICE A WEEK, $150 A YEAR RAILWAY LAW. Ser6ator B. R. Tillman Strenuous in )Support of Rate Regtllation Measure. the Baltimore Sun prints the fol nwing fron, its Wasihington -orres pondent: "The ways of the cuttle !fish are dark and inky. So are those of the railroad cuttlefish. Whenever the former is pursued it emits a black fkid to becloud the waters and euable it. to escape. Railroad opposition to rate legislation has been employing cuttlefish tactics to escape legisla tion, but this endeavor is, in my opin ion, a vain one, because I believe an adequate legislative remedy will be provided as sure as fate." This statement was made in an in terview on the railroad rate problem to a correspondent of the Sun this evening by Senator Benjamin R. Til man, South Carolina, who is 'he. ranking democratic member of the senate interstate commerce commit e -' of *hich Senator Elkins, of West Vir ginia, is chairman. Mr. Tillman will, if his healtfh permits, take an active part in the consideration of railroad rate legislation this winter both :n the commit'tee which met today' to inaugurate the framing of a bill and on the floor of the senate. He has returned to Washington after a long absence dating back to the early days of the last session of congress, when he was compelled, on account of poor health to return to his home in South Carolina. He Iias completely recup erated and was -fall of -vigor and gen al good humor .when he rejoined his .colaeagues in -the committee room to '-da . e legislation favored by the pres idet is not regarded by Senator 'Till mai as a new propositidn, and be con rsi s it complex in the sense. that fit powerfully opposed by certain lcorpojate interests. He said today that (he had been in favor of the princi 'ple. enunciated by the president ever -since the days when 'the -late Senator Chiltorm and Senator Chandler were memtbers of the senate interstate corn merce commit.tee. Chilton, Chandler and THfiman put up a strong fight against7the pooling 'bill when it was under consideration by 'the same com mittee. "The settlement of the rate prob .lem," said Senator Tillman this even ing, "would be an extremely simple propositi'on if we could eliminate .the powerful influence and -insatiate greed of corporations and capitalists who *want to maintain monopdlies and practice and exercise discriminations -in other words, to rob the people. They are damming up the water, and unless -there is an outlet the masses oif the 'people may 'be driven to des peration and socialism if redress is not granted. When waters have been dammed up a long time they some times cut even deeper channels when .the dam breaks, tearing away some of the sustaining emibankments. In this day. when graft and greed seem to) be universal microb'es, I don't know what tihe people who .are seeking a remedy from existing evils may do if they are denied the simple 'machinery pr'oposed to enable the interstate commerce commission to apply the principle now advocated by the presiden-t and favored by democrats long before he brought it -to t-he -front." "What remedy -wonld you apply to t-he rate situation ?" Senator Tillman was asked. "1 would 'give the interstate com merce commission power, after inves jigation, complain't having been made as .to the unreasonableness or discrim ination orf a rate, to determine what is a just and fair rate, 'which shall go into effect immediately, reserving, of couw e. the right 'to appeal. fter 'the interstate comnerce ission has made a decision re *g a grievance the right should nined on fifth page.) PROSPERITY CASE HIS BEEN DECIDEI DECISION RENDERED BY THE SUPPREME COURT. Real Debt to Bank of Prosperity Fix ed at $96o, With Interest From July 11, o902. The supreme court has handec down its decision in the case of cer tain resident taxpayers of the town ol Prosperity against the town counci and the Bank of Prosperity to enjoir the town council from paying .a note for $i,ooo given to said bank for mon ey borrowed for the purpose of build ing a town hall, market and guard house. The supreme court has decid ed that the real debt is $960, the amount actually recei-!ed and used with interest from July II, 1902, at ; per cent, less any sums paid by the town thereon, and 'this amount *will now have to be paid. illhe attorneys in *the case were Messrs. Bellinger and Townsend foi the plaintiffs and Messrs. Hunt, Huni and Hunter for the defendant. The opinion, written by Mr. Asso ciate Justice C. A. Woods, Mr. Pre siding Justice Eugene B. Gary and Mr. Associace Justice Ira B. Jones concurring, follows: R. L. Luther, J. B. Simpson, W. A. Moseley, J. B. Bowers, T. A. Dom nick and .1. D. Quattlebaum, Plain tiffs Agist J. 5. Wheeler, as Intendant, and S. S Birge, A. H. Hawkins, R. C. Counts, and D. W. Boland, as Wardens, con stituting the Town Councilof the Town of Prosperity and -the Bant of Prosperity, Defendants. The plaintiffs, as resident taxpay ers of the town of Prosperity, brought this action to enjoin the defendants as intendant and . wardens constituting the town council of that town from paying a note for $i,ooo given to the Bank of Prosperity for money bor rowed for the purpose bf building a town hall, market and guard-house. On the application of plaintiff's at torney's, -His Honor Chief Justic" Pope granted at chambers, on August 4. 1904, a. temporary injunction, and required the defendants to show caum why it should not be made permanent. The defendants appeared .:' Augum 8, 1904, in ans~wer -to the rule to show cause, and it then appearing that is sues of fact were involved, H. C. Hol loway, Esq., was appointed referee "to take -the testimony and report the same, together with his conclusion thereon, to the supreme court at its regular Novernber term, 1904." The facts as found by the referee aresu stantially as follows: On March 9, 1902, after due notice given -by the town council, about 65 or 79 out of the 90 -or 95 registered voters of the town of Prosperity, at 'least one of the plaintiffs being oresent. met at the High school building fo-r the purpose of nominating an intendant and war dens to serve for the ensuing year. The testimony shows after the nomi nations a resolution to the effect that it 'be "t'he sense of this meeting. that the new council -procure a lot, and erect thereon a town hall, market and guard house." was unanimously adop red. The 'design and cost of the building were not considered at this -meeting and at no time was the question of borrowing money for its erection evet submitted to the citizens of the rown, the newly-elected -council assuming entire charge of all these matters. The new council made an est-imate ol the income of the town for that fiscal year. and reached the conclusion that by managing economically they could pay $15o -for the lot, expend $1,500 on the building, and still meet the ordli nary current expenses of the town On June 30, 1902. a lot for 'ihe site oi the building, was actually purchased at he .prie of $ien. council giving the note of the town for the purchase money, with interest, due in one year. Relying on their estimate, council passed an ordinance .on July 5. 1902-. to borrow $I,ooo from the Palmetto Bank and Trust Company, of Colum bia, S. C., "for the purpose of building city 'hall." A resolution dated July 9, 1902, and properly signed and attested by the town officials, authorized the borrowing of $z,ooo from 'rhe Palmet to Bank and Trust Company with -which "to carry on the affairs of the town," the obligation to be secured by pledge of "the taxes of the town aris ing from the levy for the present year, i or the profics derived by the town from the dispensary,'or both, if neces sary." This :resolution is not referred to in the Minute Book of council, but the referee found that it was the same as the ordinance mentioned as passed on July 5, 1902; and this seems cor rect, council explaining 'the apparent difference for which the money was borrowed by saying that when it was found necessary to borrow they de- i cided to put the sum borrowed into the common treasury and pay it out as needed, -whether for work on the building or for ordinary current ex penses. On July 1, 1902, the town council negotiated the note of. the town for $i,ooo, payable January'iq, 1903, the resolution of July gth being attached,at -the Palmetto Bank and Trust Company, and received -thereon $96o. At this time the only debt out standing against the town so far as the- testimony shows :was. the $150 note given for the purchase money of -the ot. It is true, the ordinary cur rent expenses for the remain-der of the year had to be met,. but the resolution authorizing- the cre ation -o'f the debt specified that the money was to be used "'o carry on the affairs of the town," and there is nothing to show that the bank had express notice of the original ordi nance specifying that the money was to be used for the purpose of build ing a town hall. The cash book of the town shows that the total municipal income from all sources for the fiscal year begin ning April 22, 1902,~ was $1,832.19. The receipts up to July ii, 1902 were $455.56, and the expenditures $44.82, of which $297.60 was paid out on the building and the balance on current expenses. This left available to council $1,391-37 'with which to pay the ordinary current expenses from July 11 to the end of that fiscal year, amounting to $1,o00-13, and with which to .pay the 'balance of $1,352.40 on 'the lot and building deilts of $1,65o, 'd'us showing council 'had fallen far short in their estimate. If the $,65o had not been spent on the town hail, council would have had a balance of $687.84 on 'hand at the end -f the fiscal year, but instead o.f limit ing the cost of the building and lot to $1,65o as originally contemplated, they decided to enlarge and improve the building, and to meet the addli tional expense borrowed on Se'ptem ber 8. 1902, $60o from the Bank or Prosperity, giving there-for the note of the town p)ayable in one year. thus makin'g the total indebtedness of the town for the fical year 1902, $3,394.35 as against a total income of $1,832.19. At maturity on January 10. 1903, the $,ooo note to the Palmetto Bank and Trust company was taken u-p 'by the Bank of Prosperity, and a renewal note tinder the seal of the town was given 'by the council, the ordinance authorizing such action, which was similar to the resolution under which the original debt was incurred, be-1 ing attached thereto. A like second renewal note was given at the maturi ty of the first in 1904 under the au thority of a similar ordinance. From this it clearly appears that this last renewal note for $1.ooo to the Bank of Prosperity, maturing January 7. 1905, payment of which is herein sought 'to he enjoined, evidences the .same debt that was created on July r. 1902 with the Palmetto Bank ind Trust company. Thus it will be seen that council had creted a dJ)t against the town of $T.75o evidenced by three notes for $i5o, $i.ooo and 6oo, respectively, which would neces ;arily have to be paid by a future :ouncil, after the expiration o-f their term of office, and out of taxes and icenses to be levied and collected in mother fiscal year. and so the reve aues of a future fiscal year, would iave to be applied to the payment of i debt contracted in a prior year. From the -cash book of the town it ppears that the total income of the :own, including cash on hand, from April 22, 1903 to April 26, 1904, was $i,8o6.95, and the expenditures $1,743. )6, which included payment of the $i5o note for the -purchase money of :he lot and of the $6oo note of the Bank of Prosperity. The total in :ome of the town friom January i, 903 -to January 1. 1904 was $1,504-17 ind from January I, 1904 to Novem >er I, 1904, $1,293, showing that at no :ime- have funds been on hard with vhich to pay the note for $i,ooo held y the Banik of Prosperity. At the time it was deteimined to :recl this building the council had no >ace to meet, the market was in bad :ondition, and the guard-house total ty inadequate; and therefore it was iecessary to erect a building of some Cind for municipal purposes. When :ompleted the town hall cost .$2,29i.-r >, but the work appears to have been tone dheaply and the building to be 1tite- satisfactory in every way. DurIng the progress of the work on the building itemized statements of .he receipts and expenditures of the -own, showing ~The amount of its in :lebtedness and to whom due, were >ublished in the newspapers or post !d in public places; and any other nformation of this kind could 'have )een had from the clerk and treasurer. Plaintiffs acquiesced in the incurring )f these debts and the building of the, 'own hall to the extent of making io complaint until the bringing of this action. We consider first the general prin :iples of law applicable to the case, and then the effect of the Constitu :ion and -the statute law of the State. Municipal corporations have only ,nc'h ,powers' as are granted to thenm >y the Constitution or by statute itiher expressly or by necessary i lication. The following statement >f the law from i Dillon on Munici >al Corporations, Sec. 89, is support d 'by practically unbroken authority; 'It is a general and undisputed propo ;ition of law that a municipal corpora :ion possesses and can exercise the Eollowing powers and no others: First, those granted in express words; ;econd, those necessarily or -iinalTy mplied inl or incident ~to the powers xpressly granted; third, those essen :al to t!he declared objects and pur oses of the corporation,-not simply :onvenient, but indispensable. Any air, reasonable doubt concerning the ~xistence of power is resolved by the :ourts against the corporation, and he power is denied." Heise V. Town ouncil, 6 Rich. 404; State ex rel. At cins V. Mayesville, 12 S. C. 76: Blake, V. Columbia Club V. McMaster, 35 . C. 1: Mauldin V. City Countiy 42 . C. 293. The power to borrow money is not i necessary liicident of municipal life. ad hence does not exist unless ex >resy given. or unless 'some duties ire imposed or powers conferred on :he corporation 'which manifestly :ould not be exercised at all without orrowing rnoney. The two leading :ases on the subject are Mayor of \ashville vs. Ray. 19 WVall. 468,22, L. d. 164; and Hackettstown vs. Swack 1iamer. 37 N. .J. L. 191. Auth orities :o the same effect will 'be found col ected in 8 Rose's Notes. 253: Note to ones vs. Camden. 9i Am. Rep.. 828 . C.: Wells vs. Towvn of Salina. 7 L. R. A. 759 (N. Y.); Allen vs. Inten lamn of LaFayette. 9 L. R. A. 497 mA. i Dilonn on Municipal Corpora tions. Sec. 125, I and Sec. 507 a; 20 A. & E. Ency. Lay 1143. The con trarv view was taken in a number of the earlier cases cited in i Dilion on Municipal Corporations, Sec. 118, and by some of the Justices of the Su preme Court of the United States in Nashville vs. Ray, supra. There is now, however, little of any judicial dissent from the view that municipal officers are not the general fiscal agents of the corporation with the im plied power to borrow money for corporate purposes. This conviction of the courts has been greatly strengthened by the disasters which 'have befallen so many communities growing out of the negligent and fraudulent misappropriation of money borrowed by counties, cities and towns. In state ex rel. Atkins vs. Mayesville, 12 S. C. 76, the court says: "The only point discussed .at bar is he power of the town of Mayesville to levy taxes. It appears that no ex press authority is granted for that purpose in its charter. Such power can only be implied on the ground of necessary implication. To raise such an implication it would be necessary to hold that mu nicipal powers cannot be effectively granted without the taxing power-a proposition that we cannot affirm; no such power of 'taxation can therefore be implied." le power to levy taxes is far more usual and necessary to corporate existence than the power to borrow money on the -faith of taxes, and if. the former- is not implied frowt. the fact of incorporation for a strong er reason the latter is not. There is, however, an obvious dif ference between borrowing .money, even for the purpose of applying it to the ordinary current expenses of the town, and contracting debts to those who are employed to do those things requisite to the conduct of the town's affairs. sudh as street laborers, po licemen, etc.. or even for the erection of buildings to be used for municipal purposes. "In the one case the ap plication of the credit is sgcured to the advancement of the auth6rized ob ject, while money borrowed is liable to be lost, to be squandered, or to be diverted to illegitimate purposes.' 2 Daniel on Neg. Inst., Sec. 1530. Un der the general rule of law, the coun ci of the town of -Prosperity could have made a debt for a town 'hall and guard-house to one who contracted to build it. Neely vs. Yorkville, * * * * * But even the power to cont-act debts for municipal purposes shiould be restricted to such debts as the council could reasonably expect and in good faith did expect to pay .from 'the ordinary revenue of the town for the current municipal 'fiscal year. With out such a restriction it is manifest there would be no safeguard against involving the (OWnl in overwhelming debt for municipal buildings and en terprises out of all proportion to its present or reasonably to be expected population and wealth. While this might not imply the same moral tur pitde, it is as disastrous to the tax payer as in.tentional misappropriation of -borrowed money. especially when any unusual enterprise is contempla ted, all who deal with the municipal authorities are chargeable with the knowledge that the council woul have no right to involve The town in debt for its prosecution, unless, after a careful estimate, they with good reason believe there would be a suir plus revenue for the current year, over all necessary current expenses to pay the debt to be contracted for such building or other enterprise. If, how ever, such an estimate is made leading to the reasonable conclusion that the anticipated revenue will be sufficient to meet the det* conte'mplated for the municipal building or other special en terrise as well as current charges, and acco rdingly the buildinug or other enterprise is commenced, and any cosierable expense is incurred and then, it should turn out t:hatc the esti .a of the exnpnen were too low