There seems to have been a split in the Board of Supervisors at this time. Six of the twelve members made individual returns to the complaint, and alleged that they had no part in the refusal to deliver the bonds. The other six and the mayor voted to employ counsel and to defend the suit.
Contentions of Defendants
The case came to a hearing January 7, 1865. In some respects the defense now rested on new ground; in some new emphasis was given matters previously brought forward.
The supervisors in January alleged that the election in San Francisco held May 19, 1863, at which the electors of San Francisco had approved the subscription to the stock of the Central Pacific, had been carried by corruption and bribery. This assertion was given great prominence in the answer of the supervisors, though less in briefs of counsel. Nine instances were cited where A. P. Stanford had given sums ranging from $5 to $40 apiece to electors, or had thrown handfuls of money among the electors “and thereupon they scrambled among themselves for the same.” It was urged that these bribes had had great influence upon the vote and that the election was void. These facts had not been known to the supervisors on June 20, 1864, when order No. 582 had been passed, and defendants believed that knowledge of them would have prevented the passage of the ordinance.
Besides this, the supervisors declared that the passage of ordinance No. 582 had been procured by false and fraudulent representations by the railroad company. More important, it was now contended that the Act of 1863 was unconstitutional, in that the legislature was without power to “impose on a municipal corporation of the state the burden of exclusively building or aiding to build a work of general interest to the state, which is in no sense a work of local interest to the corporation on which the burden is imposed.”
It was pointed out that the Central Pacific was a work of general interest to the Pacific Coast. It did not come within 100 miles of San Francisco. It had received large subsidies from the federal government on the ground that it was of national importance. Counsel declared that:
The true test of whether a tax can be exclusively laid on a municipal corporation, is to be found in the purpose for which municipal government is confined within local limits. Citizens living within those limits are exposed to exclusive taxation because, and only because, a peculiar benefit is conferred upon this locality. When the benefit is shared in by the rest of the state, then a state tax is levied, because the citizens of San Francisco received advantage, not in their character as citizens of San Francisco, but as citizens of the state. The state government is as much a benefit to San Francisco as its own municipal government. Yet no one would contend that she could be compelled to support the entire expenses of the former, or that any other city should be compelled to contribute towards the expenses of the latter.
City Compelled to Subscribe