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 established by judicial decisions to require extended argument upon the subject.
In Burlington 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 Association vs. Topeka, 20 Wall, 655 (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 manufactures 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 approving, to an iron-bridge company, as a consideration for establishing 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 bonafide sale to a loan association, the city meanly repudiated its obligations, 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 encouragement of manufacturing enterprises. Legal proceedings to enforce 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 Supreme Court, where with only one dissenting voice (Judge Clifford) 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 authorized to contribute aid by way of taxation to any class of manufactures, 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-
