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Message to the House of Representatives Returning Without Approval a Bill to Authorize the Board of Supervisors of Maricopa County, Arizona, to Issue Certain Bonds in Aid of the Construction of a Certain Railroad

June 20, 1890

To the House of Representatives:

I return without my approval the bill (H. R. 3934) "to authorize the board of supervisors of Maricopa County, Ariz., to issue certain bonds in aid of the construction of a certain railroad."

This bill proposes to confer authority upon the supervisors of the county of Maricopa to issue county bonds at the rate of $4,000 per mile in aid of a railroad to be constructed from Phoenix northwardly to the county line, a distance estimated at 50 miles, but probably somewhat longer. The bill seems to have passed the House of Representatives under an entire misapprehension of its true scope and effect. In the brief report submitted by the Committee on Territories it is said that "by the terms of the bill the county receives bonds in payment of the money proposed to be advanced," and in the course of the debate the Delegate from Arizona mistakenly stated in response to a request for information that the bill proposed a loan by the county, in exchange for which it was to receive the bonds of the railroad company. In fact, the bill does not provide for a loan to be secured by bonds, but for a subscription of stock. How far this mistake may have affected the passage of the bill can not of course be known.

The bill does not submit the question of granting this aid to a vote of the people of the county, but confers direct authority upon the supervisors to issue the bonds. It is said, however, that in April, 1889, an election was held to obtain the views of the people upon the question. It does not appear from any papers submitted to me who were the managers of this so-called election; what notice, if any, was given; what qualifications on the part of voters were insisted upon, if any, or in what form the question was presented. There was no law providing for such an election. Being wholly voluntary, the election was, of course, under the management of those who favored the subsidy, and was conducted without any legal restraints as to the voting or certification. I have asked for a statement of the vote by precincts, and have been given what purports to be the vote at twelve points. The total affirmative vote given was 1,975 and the negative 134. But of the affirmative vote 1,543 were given at Phoenix and 188 at Tempe, a town very near to Phoenix. If there were no other objections to this bill, I should deem this alone sufficient, that no provision is made for submitting to a vote of the people at an election, after due notice and under the sanction of law, the question whether this subscription shall be made.

But again, the bill proposes to suspend for this case two provisions of the act of Congress of July 30, 1886--first, that provision which forbids municipal corporations from subscribing to the stock of other corporations or loaning their credit to such corporations, and, second, that provision which forbids any municipal corporation from creating a debt in excess of 4 per cent of its taxable property as fixed by the last assessment. The condition of things then existing in Arizona had not a little to do with the enactment by Congress of this law, intended to give to the people of the Territories that protection against oppressive municipal debts which was secured to the people of most of the States by constitutional limitations. The wisdom of this legislation is not contested by the friends of this bill, but they claim that the circumstances here are so peculiar as to justify this exception. I do not think so. In the States the limitation upon municipal indebtedness is usually placed in the constitution, in order that it may be inflexible. If a showing of need, gain, or advantage is to overcome the barrier, then it is scarcely worth while to declare a limitation. Only a belief that the limit is inflexible will promote care and economy in administration. If this bill becomes a law, how can Congress refuse to any county in any of the Territories the right to subscribe to the stock of a railroad company, especially where the subscription would not exceed the debt limit, upon a showing of the advantages of better and cheaper communications?

Maricopa County is one of great extent. Its northern boundary is 95 miles long, its southern boundary 66, its eastern 45, and its western 102. This great area is to be taxed to construct a road which can, in the nature of things, be of advantage to but a fraction of it. There is no unity of interest or equality of advantage. It may very well be that a section of these lands along the line of the road, and especially town lots in Phoenix, would have an added value much greater than the increased burden imposed, but it is equally clear that much property in the county will receive no appreciable benefit.

The existing bonded indebtedness of Maricopa County is $272,000; the tax assessment of the county is about $5,000,000, and the population is estimated, by multiplying the vote cast in 1888 by 6, at about 12,000. It will be seen that the bonded debt, to say nothing of a floating debt, which is said to be small, is already largely in excess of the legal limit, and it is proposed to increase it by a subscription that will certainly involve $200,000, and possibly $250,000. If the bill becomes a law, the bonded indebtedness will very closely approximate 10 per cent of the assessed valuation of the property of the county.

The condition of things in the county of Yavapai, lying immediately north of Maricopa, and through which this road is also to run, though not directly affected by this legislation, is very instructive in this connection.

By an act of the legislature of Arizona passed the year before the act of Congress to which I have referred Yavapai County was authorized to subscribe $4,000 per mile to this line of road. The total length of the road in the county was 147 miles, and 74 miles, to Prescott, have been constructed. The secretary of the Territory, in response to an inquiry, states the debt of Yavapai County at $563,000 and the assessment for taxation at "between six and seven millions." There are 73 miles of road yet to be built from the present terminus, Prescott, to the south line of the county, for which Yavapai County must make a further issue of bonds of $292,000, making a total county debt of $855,000, or above 13 per cent upon the taxable assessment (taking that at $6,500,000), and a per capita county debt of nearly $85, taking the population at about 10,600, as stated in the report of the Senate committee. Surely no one will insist that the true and permanent prosperity of these communities will be promoted by loading their energies and their industries with these great debts. I feel the force of the suggestion that the freight charges now imposed upon the farm and orchard products of Maricopa County by the railroads now in operation are oppressive. But this bill does not afford much relief even in that direction. There would be but one competing point, viz, Phoenix. At all other points on the proposed road the people would be subject to the exaction of just such rates as are demanded by the other lines. If this bill contained some effective provision to secure reasonable freight rates to the people who are to be taxed to build the road, it would go far to secure my favorable consideration for it.

I have carefully examined the reports of the committees and every argument that has been submitted to me by the friends of the bill, but I can not bring myself to believe that the permanent welfare of the communities affected by it will be promoted by its passage.


APP Note: Title devised by Gerhard Peters

Benjamin Harrison, Message to the House of Representatives Returning Without Approval a Bill to Authorize the Board of Supervisors of Maricopa County, Arizona, to Issue Certain Bonds in Aid of the Construction of a Certain Railroad Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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