PRINCIPLES OF TAXATION. 611 



It can not, therefore, authorize them to issue bonds to assist merchants or 

 manufacturers, whether natural persons or corporations, in their private 

 business. These limits of the legislative power are now too firmly estab- 

 lished by judicial decisions to requii*e extended argument upon the subject. 



In Burlirgton vs. Beasley (94 U. S., 310), however, taxation in 

 aid of a public gristmill, the tolls of which the Legislature would 

 have a right to regulate, was sustained ; the construction of such 

 a mill in a new country being probably a public necessity, and not 

 possible without public aid. 



But perhaps the most weighty opinion on this question is that 

 of the United States Supreme Court in the case of the Loan Asso- 

 ciation vs. Topeka, 20 Wall, G55 (before referred to on page 153, 

 vol. L., Popular Science Monthly). In 1872 the Legislature of 

 Kansas passed an act authorizing cities and counties to issue 

 bonds for the purpose of encouraging the establishment of manu- 

 factures and other like enterprises ; and under this act the city 

 of Topeka created and issued its bonds, to the extent of $100,000, 

 and gave the same " as a donation," a majority of voters approv- 

 ing, to an iron-bridge company, as a consideration for establish- 

 ing and operating their shops within the limits of the city. The 

 interest coupons first due on these bonds were promptly paid by 

 the city out of a fund raised by taxation for that purpose, but 

 subsequently, when the second coupons became due, and the bonds 

 had passed out of the possession of the bridge company by hona 

 fide sale to a loan association, the city meanly repudiated its obli- 

 gations, on the ground that the Legislature of Kansas had no 

 authority under the Constitution of the State to authorize the 

 issue of bonds, the interest and principal of which were to be paid 

 from the proceeds of taxes, for any such purpose as the encour- 

 agement of manufacturing enterprises. Legal proceedings to en- 

 force payment were thereupon commenced by the bondholders in 

 the United States Circuit Court, and judgment having been there 

 given for the city, the case was appealed to the United States Su- 

 preme Court, where with only one dissenting voice (Judge Clif- 

 ford) the judgment of the lower court was affirmed. 



The following extracts from the opinion of the court, given 

 by Justice Miller, will forever stand as embodying economic and 

 legal principles of the highest importance : 



" Beyond a cavil there can be no lawful tax which is not laid 

 for a public purpose, ... It may not be easy to draw the line in 

 all cases so as to decide what is a public purpose in this sense and 

 what is not. But in the case before us, in which towns are author- 

 ized to contribute aid by way of taxation to any class of manufac- 

 tures, there is no difficulty in holding that this is not such a public 

 purpose as we have been considering. If it be said that a benefit 

 results to the local public of a town by establishing manufac- 



