304 



GEORGIA. 



contrary to public policy, as they could contract 

 unlimited liabilities for deposits. 



In 1874 an act was passed by the Legislature 

 taxing the property of all the railroads in the 

 State as other property of the citizens is tax- 

 able. Many of these corporations claimed that 

 they were entitled by their charters to a pre- 

 scribed limited rate of taxation, and that it was 

 a violation of the contract made with the State 

 to impose a higher rate. The rate prescribed 

 in their charters was generally one half of one 

 per cent, upon their net income. The object 

 of the act was to test the right of the State to 

 tax the railroads beyond the limits prescribed, 

 and a method was defined by that act, by which 

 the railroads could avail themselves of all the 

 privileges conferred by their charters. Suits 

 were instituted against most of the railroad 

 companies during the term of Governor Smith ; 

 and while taxes were collected against those 

 roads which had no chartered exemptions, yet 

 in most of the leading lines of this State the 

 decisions of both the State courts and the Su- 

 preme Court of the United Statos were adverse 

 to the right of the State to recover any taxes 

 beyond its chartered rate. The fieri facias 

 issued were generally for taxes due for the 

 years 1874 and 1875. The Legislature, by re- 

 enacting the act of 1874, in an amended form, 

 continued to impose the tax, and made it the 

 duty of the Executive to enforce it, if possible, 

 under the law. The Attorney-General sug- 

 gested that, if new suits were instituted against 

 the railroads, a decision might be obtained 

 from the courts, either declaring these exemp- 

 tions unconstitutional, or else materially modi- 

 fying them. General Toombs, who had been 

 employed in the suits arising under the fieri 

 facias for the years 1874 and 1875, was em- 

 ployed to aid the Attorney -General in re- 

 opening this litigation. The Comptroller-Gen- 

 eral, whose duty it was under the law to issue 

 the fieri facias, declined to issue the writ with- 

 out an Executive order requiring him to do 

 so. This order was accordingly given by the 

 Governor, and the fieri facias issued. The re- 

 sult of that reopened litigation was to obtain a 

 decision from the court declaring the tax con- 

 stitutional ; so that from this source, apparently 

 closed, there has been collected for the State 

 the sum of $216,683.27. These collections 

 embrace taxes from the railroads for the years 

 1874 and 1875, as well as subsequent years, 

 with interest from the time when due. A 

 principle has been established which will result 

 in bringing a large amount of revenue into the 

 State Treasury annually from this source. The 

 Attorney-General recommends some legisla- 

 tion in connection with the tax on certain roads, 

 and that, in order to secure a proper return of 

 the taxable property of railroads, the duty of 

 determining what taxes the roads should pay 

 should be devolved by the Legislature on the 

 Railroad Commission instead of the Comp- 

 troller-General. 



A very important suit has been instituted, 



which involves the constitutionality of the act 

 creating the Railroad Commission. A bill was 

 filed by M. K. Jessup, surviving trustee of the 

 bondholders, for the old Atlantic and Gulf Rail- 

 road, in the United States court, to restrain 

 the Commissioners from executing the act to 

 regulate tariffs, which bill Judge Bradley dis- 

 missed. A second bill was filed by one of the 

 stockholders of the Savannah, Florida and 

 Western Railroad Company, which succeeded 

 the old Atlantic and Gulf Railroad Company, 

 and a preliminary injunction was granted pend- 

 ing the decision. 



In conformity with a resolution of the Gen- 

 eral Assembly, fieri facias were issued against 

 John W. Renfroe, Treasurer of the State, and 

 his sureties, for certain moneys received as in- 

 terest on the public funds. Bills were filed in 

 these cases by the defendants, and injunctions 

 granted, and the cases are pending. The fieri 

 facias are for the amount of nearly $26,000. 

 The amount of interest which the principal 

 and his sureties are sued for is over $20,000. 

 It is contended by the State that the Treasurer 

 illegally appropriated to his own use interest 

 obtained from banks in payment for the use 

 of the State's moneys which were deposited in 

 them, in violation of an act which forbids the 

 Treasurer " to use himself, or to permit to be 

 used, the funds of the State." Six contracts 

 were made with the banking companies by the 

 Treasurer, each of which, and not each act of 

 receiving interest, was construed by the Attor- 

 ney-General to constitute a violation of the 

 law, to which a penalty of $500 is attached. 

 The question will, however, be submitted to 

 the courts, it is said, whether or not each sepa- 

 rate act of receiving interest is finable, in which 

 case the penalties will amount to $40,000. 



In the case of the State against John Jones, 

 Treasurer, and John T. Grant and C. A. Nut- 

 ting, sureties, a judgment was obtained for 

 $96,000, dated May 23, 1879. A motion was 

 made to set aside the judgment. The suit was 

 instituted during the term of Governor Smith, 

 by the Attorney-General, N. J. Hammond ; 

 and Governor Smith employed to assist him 

 General R. Toombs, McCay & Trippe, Willis 

 A. Hawkins, and William T. Newman. All of 

 these lawyers advised the acceptance of $35,- 

 000 offered in compromise by Mr. Grant. The 

 tax-books showed his available property to be 

 but little in excess of this sum. Mr. Grant 

 urged, and some of the State's counsel con- 

 ceded, that he gave the bond to serve a tem- 

 porary purpose, deemed important for the pub- 

 lic service, and thought that the new bond 

 given was legally a substitute for his bond. 

 This constituted a strong equitable reason for 

 accepting the compromise. Governor Colquitt 

 under these circumstances acted upon the rec- 

 ommendation of the counsel for the State, and 

 accepted the $35,000 as the best thing for the 

 State's interest. This offer was accepted pend- 

 ing the motion to set aside the judgment. The 

 Supreme Court afterward decided in favor of 



