734 



SOUTH CAROLINA. 



After the adjournment of the Legislature, 

 various controversies arose regarding the fi- 

 nancial situation. It was claimed by some 

 that the general license law was unconstitu- 

 tional, and, at a public meeting in Charleston, 

 in April, resolutions were adopted recom- 

 mending that it be brought to a judicial test, 

 but no decision has ever been obtained upon it. 



The act "to relieve the State of South Caro- 

 lina of all liability for its guarantee of the 

 bonds of the Blue Ridge Railroad Company, 

 etc.," was pronounced unconstitutional by 

 Judge A. J. Willard, of the Supreme Court, 

 acting in the place of a circuit judge; the 

 question having been brought before him by 

 an application of the Auditor of the State for 

 an injunction restraining the Treasurer from 

 issuing the revenue bond scrip. His decision 

 was placed on the ground that this scrip was 

 intended to circulate as money, and contained 

 a pledge of the faith of the State, and was, 

 therefore, "bills of credit" within the mean- 

 ing of the clause of the Federal Constitution 

 which prohibits the States from issuing such 

 bills. The subject was again brought up be- 

 fore Judge Samuel "W. Melton, of the Court of 

 Common Pleas ID Richland County, and he 

 also decided, on the 2d of December, that the 

 issue of this scrip was unconstitutional. He 

 said, in his decision : 



In. arriving at my conclusions^ I have not deemed 

 it pertinent to consider the equity which may exist 

 as between the State and holders of revenue bond 

 scrip, arising from the surrender of the guaranteed 

 bonds. If an obligation exists involving the faith 

 of the State, it rests upon the legislative, and not 

 with the judicial, department of the government. 

 And I have deemed it alike foreign to the issues pre- 

 sented to pass upon the morality or the justice of this 

 legislation, which, without consideration and without 

 benefit to the State, seeks to impose an additional 

 and grievous burden of debt upon the people. 1. 

 The action may be maintained by the plaintiff as 

 State Auditor; and all parties necessary to an adju- 

 dication of the issues so made are before the court. 

 2. The revenue bond scrip is a "bill of credit" 

 within the meaning of Section 10, Article I. of the 

 Constitution of the United States ; and the act of 

 the General Assembly of this State 2 approved 2d 

 March, 1872, so far forth as it authorizes the emis- 

 sion of such scrip, is in violation of the Constitution 

 of the United States, and therefore void. 3. The 

 revenue bond scrip is not within the meaning of 

 Sections 10 and 14, Article VI. of the constitution 

 of the State of South Carolina, and does not consti- 

 tute, therefore, an obligation which the State may 

 direct to be received in payment of taxes or other 

 dues to the State, or to be redeemed in the manner 

 provided by the said act. Issued in violation of the 

 constitution of this State, as well as that of the 

 United States, it is wholly unauthorized, illegal, and 

 without value for any purpose whatever. It is, there- 

 fore, ordered that the injunction heretofore granted 

 against the State Treasurer and county treasurers, 

 as prayed in the complaint, be, and the same is 

 hereby, made perpetual. 



Subsequently, various holders of the scrip 

 petitioned the Supreme Court to issue a man- 

 damus to compel the Comptroller-General to 

 levy the three-mills tax provided for by the 

 act authorizing the issue of the scrip, and an 

 order was made requiring Solomon L. Hoge, 



the Comptroller-General, to show cause on the 

 2d of January, 1873, why the writ of manda- 

 mus should not issue as prayed for. 



During the summer, the Secretary of State, 

 F. L. Cardozo, refused to affix the State seal to 

 certain bonds issued and signed by the Gov- 

 ernor, and an order was obtained on petition of 

 the Governor and Treasurer, from the Circuit 

 Court at Columbia, commanding him to show 

 cause why a peremptory writ of mandamus 

 should not issue compelling him to do so. In 

 his response, Mr. Cardozo said that he was 

 not authorized to affix the seal to any bonds, 

 " except for the conversion of bonds or stock 

 already issued pursuant to law," and that the 

 " pretended bonds of the petitioners, for the 

 conversion of which bonds of the State are 

 now sought to be sealed," were not issued 

 pursuant to law. He further stated that he 

 believed "the pretended bonds of the peti- 

 tioners " had been already once converted into 

 other bonds of the State, and that he 'had 

 sealed bonds for the purpose in June, 1871. 

 And, finally, he says in his answer : " This 

 respondent further shows that the act entitled 

 ' An act relating to the bonds of the State of 

 South Carolina,' approved March 13, 1872, 

 and the act entitled 'An act to provide for 

 the conversion of State securities," approved 

 March 23, 1869, are contrary to the constitu- 

 tion, and null and void. That the petitioners 

 are not authorized by law to maintain this ac- 

 tion and demand, and have this respondent 

 seal bonds of the State for the purpose of con- 

 version for other bonds or stocks of the State. 

 That under the pretended law of the State, to 

 wit, the act entitled 'An act to provide for 

 the conversion of State securities,' approved 

 March 23, 1869, the State Treasurer is author- 

 ized, only on application of any person holding 

 coupon bonds of the State of South Carolina, 

 to take up the same, and issue, in lieu thereof, 

 stock or bonds of said State, and the said State 

 Treasurer only can demand and have this re- 

 spondent seal bonds for the said purpose." 



A controversy ensued between the Governor 

 and the Secretary of State, in which the latter 

 claimed that the former had issued and signed 

 over $6,000,000 of bonds without warrant 

 law, and had diverted the proceeds to unau- 

 thorized uses. The issues of this dispute were 

 never submitted to any judicial examination. 



Almost immediately after the election in 

 October, Mr. Gary, the State Auditor, was 

 removed, and he declared that the reason was 

 that he had refused "to levy a tax to pay 

 interest upon the fraudulent debt of the State, 

 and to include a levy of three mills upon the 

 dollar to redeem $450,000 of the Blue Ridge 

 scrip, one-quarter of the entire issue." In 

 November Mr. Cardozo, who had been elected 

 Treasurer, but had not entered upon his office, 

 brought a suit to restrain the State Treasurer 

 and the county treasurers from collecting and 

 disposing of any revenues under the new 

 tax levy ordered by the Comptroller-General. 



