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MOTIVES AND INTENTION OF THE CONVENTION.

With such convictions as to what had been lost by anticipations of future revenues, of how little had been accomplished by the large amounts of them expended, of how much had been done by the wise application of small sums of accruing revenues, and how much could still be achieved by that policy; in the presence of such experience and facts as I have adverted to, the report of the committee was matured. Need I say that it intended not to authorize—not to permit such anticipations for the future ? It contemplated the policy of applying the surplus, as it should accrue, to the public works, and in such manner as to make the expenditure available at the earliest period. Its language in every part is consistent with such a policy, and with none other.

The same motives which dictated that policy, made the committee desire to secure to some extent, a priority in the application of the surplus to the Erie Canal. To improve that work in such manner as to make the previous expenditure, as far as might be, available, seemed to be the most efficient way to complete it, and to complete the other works. But so much apprehension was felt, that the jealousy of other local interests would defeat such a proposition, that it was deemed prudent to confine the priority to a sum which was supposed to be amply sufficient to make the improvements I have mentioned as contemplated by the committee; and to leave the rest of the surplus in the discretion of the Legislature. A provision was accordingly reported, that the surplus of the revenues “shall, in each fiscal year, be applied to the improvement of the Erie Canal, in such manner as may be directed by law, until such surplus shall amount in the aggregate to the sum of two millions and five hundred thousand dollars.” An alliance of the friends of the unfinished laterals with many who professed to be the especial friends of the Erie Canal, but were unwilling to apply so much to the payment of the debt, aided by a few who wished to leave the matter to the discretion of the Legislature, indicated that the convention would not give any such priority to the Erie Canal. And at length, after a prolonged struggle, a small majority was formed to extend the provision to all the unfinished works. The committee were instructed to substitute for the clause reported by them, the provision that the surplus “shall, in each fiscal year, be applied, in such manner as the Legislature shall direct, to the completion of the Erie Canal enlargement and the Genesee Valley and Black River canals, until the said canals shall be completed.” That substitute was adopted, and constitutes the third section of the seventh article of the constitution, in respect to which the present question 3.I’ISéS.

THEIR, CONSTRUCTION OF THIS SECTION.

The material words of this section—“shall, in each fiscal year, be applied,” are the same as those of the committee, and the words—“in such manner as the Legislature may direct,” equivalent to those of the committee “in such manner as may be directed by law.” The language was chosen to command an application of the surplus from time to time as it should accrue, and was intended to confine the expenditure to such a method. The plan of its application in that mode was stated to, and discussed by, the convention. The provisions restraining the anticipation of revenues and the contraction of debts, had not yet been adopted. But this clause was universally understood, not only not to authorize, but absolutely to preclude either. It was so intended by the committee, who carefully selected the words. It was so construed by all who supported the policy of the committee. It was so construed by all who opposed that policy. Whether it would have this effect, was a question to which the attention of the convention was drawn during all the discussions, if that may be called a question in which all agreed. The amount of the surplus that could be applied under the operation of these words, and the time when that amount could be applied, was the exact point upon which all the great discussions on the finances, the sinking funds, the support of the government, and the completion of the several canals, turned. Every man who discussed the appropriations for the payment of the debts, or the provisions for the treasury, both of which had priority, did so with reference to the amount of the surplus that would remain to be applied, “in each fiscal year,” to the public works, and the influence which that amount would have in hastening or delaying the time of their completion. And constantly and carefully as the attention of all was thus attracted to the meaning in this respect of the words employed, I defy the production from the reported debates of a single expression of doubt that their effect would be to preclude anticipations and confine the expenditure to the surplus as it should accrue. Under this construction, thus universally assumed and expressed in the convention, was this provision adopted.

MR. SPENCER’s ARGUMENT FROM SECTION FIFTH IN RESPECT TO THE SINKING FUNDS.

Mr. Spencer argues that the principle of applying revenues by anticipating their receipt, is recognized and sanctioned by the provision, that if the sinking fund shall prove insufficient to enable the state, on the credit of those funds, to procure the means to satisfy the claims of the creditors of the state as they become payable, the Legislature shall, by equitable taxes, make them sufficient perfectly to preserve the faith of the state; and that this provision construes the word “apply” to mean the borrowing of money on the mortgage of future revenues, and expending it in advance. Without entering into a full discussion of this clause, I will remark, that any person who will study the whole section and its history, will come to the conclusion that, if such a construction were not precluded by other express provisions, it could not be justified. The plan of the two sinking funds originally reported by the committee, made them nearly adequate to pay the debt as it should fall due. The largest deficiency at any time during the whole period for its extinguishment, was about three and a half millions, and the average less than two. It was supposed that such an amount could, without much inconvenience, be managed by the fiscal officer by temporary advances from the specific funds belonging to the state—such as the school, literature and other funds, which could be employed to purchase such stocks; by the application of the revenues of the Treasury or General Fund; and by the borrowing of money under the express exception to the general prohibition of new debts, which allows them to be contracted to the extent of one million of dollars, “to meet casual deficits, failures in revenues, or for expenses not provided for.” If, however, these resources should at any time prove insufficient, the Legislature was commanded to have resort to the taxing power of the state, to make the sinking funds “sufficient perfectly to preserve the public faith.” All the provisions of the financial article, as reported, had aimed to effect an equitable settlement between the treasury and the canals, which, from the revenues of the latter, should reimburse to the former the principal and interest of all its advances. This was deemed to be mere justice to such tax payers as had not been benefitted, and in some cases had been injured by the construction of the canals; and was also designed, by a final adjustment of all their claims, to take from them every apology for pensioning the government upon the canals after the debt should be paid—thus levying a special tax on trade and transportation, obstructing the reduction of tolls and cheapening of exchanges on the one hand, and encouraging improvidence in the expenditure of the government on the other. This settlement, as respects all the past, had been consummated by the provision from the revenues of the canals for the sinking fund to pay the treasury debt, and for the annuity to the treasury. But, * this section was known to require future advances to the canal sinking fund, the same principle was to be applied to them also, and they were to be made “on the credit of the sinking fund.” And it was immediately added, in the same section, that every contribution or advance to the canals, or their debt, from any source other than their direct revenues, shall, with quarterly interest at the rates then current, be repaid into the treasury, for the use of the State, out of the canal revenues, as soon as it can be done consistently with the just rights of the creditors holding the said canal debt.” No borrowing “on credit of the sinking fund” was contemplated, except that in which the treasury of the State should be in some form the lender. The inconvenience which would be felt, in “nursing along” the debt, was urged as a reason for not adopting the plans by which a less sum was to be appropriated to the sinking funds; and tables showing this effect were exhibited. When, at a subsequent period, that amount was reduced, the consequence in this respect does not seem to have attracted attention. That construction of this section which authorizes anticipations by borrowing, from other parties than the state, for the sinking fund, is to be itself justified—it cannot justify other anticipations which would operate to repeal express provisions of the constitution, and produce practical mischiefs which could not result in this case. There is a certain technical sense in which the various amounts of stock held by different persons can be deemed to be separate debts, and in which a transfer or renewal of stock may be considered the creation of a debt as between the parties. But the Convention, undoubtedly, treated the canal debt and the treasury debt as entireties, described them as they stood, at a date specified, with a known amount and an addition mentioned; and provided for them by the application of a fixed annual sum. If the borrowing from parties other than the state itself, to meet the payment of the debts as they fall due, can be justified, it must be on the ground that it is only a mode of prolonging the existing debts, until the sinking funds are able to pay them ; that it is specially authorized in this case by the provision referred to ; that it has no effect to increase the amount of the debts at the time the constitution applied to them, or at any time afterwards, when that amount had been reduced; that it does not create any debt against the state generally, or any mortgage or specific lien against any particular fund, revenue or property of the state, beyond what existed before—and that the proceeds being actually and immediately applied to cancel so far as they go the existing debt, the act is but a legitimate operation of the sinking funds which fully satisfies the provisions in regard to them, and does not violate the provisions which prohibit the contracting of debts. ... I do not know whether the scrip issued for the loan made last year for the sinking funds, confines the liability of the state to a lien on those funds. I do not think it of the slightest consequence. No decent man would say, if the sinking funds were hereafter to fail, that the obligation of the state to pay from all its resources, would be diminished by any such condition. And it is idle to say that there is any substantial analogy between an anticipation, which neither increases the debt to be paid, nor diminishes the sum to be applied to its payment, and an anticipation which adds its whole amount to the aggregate obligations to pay, whether in the form of a personal bond or of a mere mortgage.*

PROHIBITION OF ALL APPROPRIATIONS AND PCEDGES MORE THAN TWO YEARS IN ADVANCE.

But, fortunately, the constitution has limited the power of the Legislature, to contract obligations in either of these forms by express provisions. The Convention found the power to expend, not merely what was in the treasury, but what could be raised by anticipations of the revenues of the state, mortgages of its property, and pledges of its credit in the ordinary form of debt, vested in the Legislature without limit; and so far delegated by it to the fiscal officer, that the government could get on almost without a Legislature. It restrained both the delegation and the exercise of all these powers. It first provided that the executive officers should not apply, until the Legislature had authorized them to do so by appropriating ; declaring that no “moneys shall ever be paid out of the treasury of the state, or any of its funds, or any of the fnnds under its management, except in pursuance of an appropriation by law.” So far, it but established a rule with which the public mind is familiar. But it proceeded to enact another wholly new and of vast importance. It added a prohibition that no such moneys shall be disbursed, “unless such payment be made within two years newt after the passage of such appropriation act.”

It was undoubtedly a part of the design of this clause to compel the Legislature to review, at brief intervals, the ordinary standing appropriations. But it had an object far more comprehensive and influential upon the action of the government.

An appropriation is an authority or direction by the Legislature to the executive officers to apply money to a specified object. This provision limits the power of the Legislature to appropriate. Observe how it operates on money in the Treasury, at the time of the appropriation. The Legislature cannot say that this money, if it remain in the Treasury two years, shall then be applied to the specified object; can not empower the executive officers so to apply it. Any command or authority to do so, is void. Compliance with such command, execution of such authority by the public officers, is illegal. The Legislature has no power over, can confer no power i. the disposition of this money, unless that power be exercised within the period imited. In respect to money which does not come into the treasury within the two years, revenue which does not accrue within the two years, it, at no time, has the slightest control. There is no period when it can constitutionally command or authorize the executive officers to make any disposition of such money or revenue. Can it, then, bind its successors to impose a command or confer an authority which, if imposed or conferred by itself, would be unconstitutional and void # It has "sometimes been doubted how far one Legislature can, in the exercise of a discretion clearly legitimate in its present operation, absorb to itself the future discretion of its successors. But I have never heard it claimed that one Legislature —in a case where it can exercise no discretion, do no act—can absorb the discretion, control the acts of its successors; that it can create a constitutional obligation that they shall do what it has not the constitutional right to do itself. Our habits of thinking and acting have been formed in reference to our national and former state governments, which were not subject to this restriction of their authority. They possessed the full powers of appropriating and borrowing. They consequently had the power, within their proper spheres, to make contracts which require, in order to fulfil them, the future exercise of the power of appropriation. In such cases, an obligation of good faith was created to exercise that power when it became necessary. But we must divest our minds of former associations in order to see the exact extent and effect of restraints so novel as those now imposed on the customary action of our state government. The power to make contracts which require appropriations, is limited by the same restrictions which limit the power to appropriate, except in cases where the specific and express power to make the contract is granted; and in such exceptional cases alone, can the obligation of good faith on future Legislatures to make the necessary appropriations, be created. A mere agreement that a future Legislature shall, after the two years have expired, make an appropriation, would be a mere evasion of the limitation, and would impose neither a constitutional or moral obligation. The power of appropriating is the most comprehensive that can be exercised over moneys or revenues; includes every form by which they can be drawn from the Treasury. This restriction upon it applies to all uses of those moneys or revenues. It was intended to prohibit the application of them in any form more than two years in anticipation. “The object of this section,” said Mr. Hoffman, in explaining it to the Convention, as reported by Croswell & Sutton, “was to prevent the Legislature from PLEDGING the REVENUEs for more than two years in advance, and to compel them to review them every year to ascertain what appropriations would be necessary.” This section contains other important restrictions. It is adverted to because I think its effect is not yet fully understood, or easily appreciated by those who have been accustomed to the former action of the government, and because it illustrates the settled abhorrence of the system of spending by anticipation which induced the convention to multiply and repeat its prohibitions; and not because I entertain any doubt that the particular form in which such anticipation of future revenues is now attempted is included in the restriction against the contracting of debts.

* Since my letter was written, I have been enabled to see this scrip. It is in the ordinary form, and expresses a full general liability on the part of the state. This is, therefore, a debt, even on Mr. Spencer’s construction. The authority of this anticipation of the sinking funds, proves too much for his argument; it would sanction, not merely a pledge of a specific revenue without further liability, which he cites it to justify, but a debt in the ordinary form, which he admits to be within the prohibition,

MR. SPENCER's DISTINCTION BETWEEN THE SALE OF A RIGHT AND THE
CONTRACTION OF A DEBT.

Mr. Spencer argues that the borrowing of money to be re-paid out of a particular revenue pledged for that purpose and without any further liability, is not the contracting of a debt. The bill of Mr. Allen he says, “provides for the sale of an article, of a right to receive certain moneys expected to accrue from a specified source.” This sale, however, is of a peculiar character. It does not enable the buyer to acquire posses. sion of the “article,” or to himself collect “the moneys expected to accrue,” or to identify his purchase as constituting a particular revenue, or a proportional part of such a revenue, or such a revenue for a specified period; but merely the right to claim of the seller a certain sum of money to be paid out of a revenue belonging to the seller.—It would need a skilful lawyer to make the conveyance; and, if the “article” were sold under price, I fear the courts would consider it a usurous debt. • Mr. Spencer contends that an obligation to pay a sum of money out of a particu. lar revenue, is not a debt, because there is no further liability. He cites some adjudications of the courts, but they only prove that where property is pledged without a covenant to pay, there is no liability to pay beyond the property so pledged—a proposition which nobody questions. They do not show that the obligation, with the remedy thus specially limited, is not a debt even in the general legal sense of that term. The word is sometimes used with a meaning as restricted as that for which he contends; but, although I have not time to look for illustrations, I have no doubt that it will be found much more frequently employed, even in the statutes, with a mean: ing broad enough to include also the cases where the remedy is specially limited. At any rate, its legal use often concurs with the generic and comprehensive sense, which is its ordinary and popular signification.

TRUE CONSTRUCTION OF THE PROHIBITION OF NEW DEBTS.

The language of the constitution is to be interpreted, not according to technical refinements which are exceptions to even the generallegal meaning, but according to the common use of the terms. Mr. Lord, who does not seem to have given much consideration to the question, but is nevertheless more accurate than Mr. Spencer, confines his opinion to the conclusion that such a mortgage “is not a debt, within the prohibition of the Constitution. Where is the authority for claiming that the words of that prohibition were used in a narrow and peculiar sense ? There is none in the constitution. There is none in the discussions that resulted in its formation and adoption. It speaks of debts direct and contingent, and then declares that “no debts shall be hereafter contracted,” &c. It uses the word in the most generic and comprehensive sense—it includes every kind of debt—every form of obligation to pay money. The universally known purpose of the prohibition would be utterly defeated, if the import of its terms can be so restricted by ingenious construction. If the Legislature may mortgage the surplus canal revenues, by abstaining from the covenant to pay, why may it not also mortgage other special revenues and funds? The pledging of them will not import any more than the pledging of this does, a general liability to pay. Why may it not mortgage the revenues to accrue from the auction duty from the salt duty : There is the general fund, as it is called, which is the treasury. Can there be any doubt of the power to anticipate a fund ! Why may it not mortgage the revenue to accrue from the half mill tax, and at last pledge the taxing power itself? No distinction has been made between these cases. If the construction attempted to be established in the first of them shall prevail, the Legislatures may do in detail what it is expressly forbidden, on this very construction, to do in the aggregate. A construction that thus fritters away the most important constitutional provisions deliberately adopted by the people; that thus violates the general intention of the instrument, as established beyond a shadow of doubt, is unworthy of rational and honorable men discussing an important question; it is unworthy of any but quibblers, whose zeal to establish a conclusion is greater than their respect for truth and right. In officers sworn to obey the constitution, it is not only a violation of public trust, it is unconscientious and immoral.

THE PRESENT BILL CREATES A DEBT.

But, even on a construction so repugnant to reason and right, can the present bill be justified ? . It contains a provision postively commanding the Canal Board to make the revenue sufficient to pay the mortgage to be contracted. Is that to be considered as a part of the pledge to those who advance the moneys : It is undoubtedly designed to influence them to give the credit. If it is not to be maintained, it is a snare and a fraud. If there is an obligation to maintain it, by every fair construction it creates a general liablility. Will even Mr. Spencer say that a pledge by an individual of an income to repay an advance, with

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