This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
The extravagance of American municipalities has led to various attempts on the part of legislatures to prevent or restrict future indebtedness. Contracts in violation of such statutes are invalid.1 A statute restraining the power of cities to incur debts, in the exact language of the constitution is abrogated by a subsequent enlargement of power to incur debts given by a later constitutional amendment.2 Various methods of restraint have been tried. Some of the more common types are discussed in the following sections. There is this inherent difficulty underlying them all. Local government without the exercise of discretion, is an impossibility; yet the existence of discretion generally involves the power to abuse it as well as to exercise it. The problem for the legislature to solve is to obtain the maximum of discretionary power with the minimum of abuse.
Wash. 396; 36 Pac. 318. However, it has been held that a city may pay ten per cent of the face value to a broker for lithographing and selling their bonds. State v. Land Co., 75 Minn. 456; sub nom., In re Taxes, etc., 78 N. W. 115.
16 Municipal Security Co. v. Baker County, 33 Or. 338; 54 Pac. 174.
17City of New Orleans v. Warner, 180 U. S. 199; affirming 101 Fed. 1005; 41 C. C. A. 676.
18 City of Little Rock v. United States, 103 Fed. 418; 43 C. C. A. 261.
19 Lewis v. Lofley, 92 Ga. 804; 19 S. E. 57 (a county).
20 Kemp v. Hazelhurst, 80 Miss. 443; 31 So. 908.
21 Ft. Madison v. Water Co., 114 Fed. 292; 52 C. C. A. 204; affirming 110 Fed. 901; Marion Water Co. v. Marion. 121 Ia. 306; 96 N. W. 883.
1 Shinn v. Board of Education, 39 W. Va. 497; 20 S. E. 604.
2 Bray v. Florence, 62 S. C. 57; 39 S. E. 810.