Eventually, challenges to the 1850 constitution’s prohibition on state-funded internal improvements moved beyond financing railroads. Two cases, one in 1884 and one in 1888, raised the question of whether taxes could be used to drain marshes, or what would be called wetlands today. In the first case, the Michigan Supreme Court held that raising taxes to drain marshes — in this instance, dredging the Dowagiac River — was unconstitutional since it fell within the definition of an internal improvement, which was clearly prohibited in the 1850 constitution. The opinion stated:
[Taxes for draining marshes] deprives the citizen of his property without due process of law; and it makes no difference that it was assented to by a majority of legal voters. A person may give his own property to whom he pleases, but he cannot compel his neighbor to part with his property except by due process of law. I do not think the law can be sustained upon the theory advanced by counsel for defendant, that the taxation was for a local purpose, and such purpose meritorious and beneficial to the public. It may be conceded that the straightening and deepening of the channel of the Dowagiac river would be conducive to the public health; that it would be advantageous to the roads leading across the swamp, and very much lessen the expense of keeping such highways in repair. Yet all this does not obviate the constitutional objections to the statute under which this tax was levied, and the remedy for existing evils must be sought in some other direction.[38]
The court clarified this ruling in an 1888 case, holding that public funds could only be used to drain marshes to protect public health. They could not be drained “for the purpose of private advantage, such as improving the quality of the land, or rendering it more productive or fit for cultivation.”[39] In other words, if the primary purpose of draining the marsh was to benefit private interests, it was not allowed.
New cases challenging the court’s ruling in Salem and other internal improvement cases originated in Detroit. The Legislature passed a law that enabled the city to use public funds to create a streetcar system.[40] In the 1899 case that followed, the city of Detroit argued that the Salem decision “was never accepted as correct by the profession in this state, and is contrary to the decisions of other courts.”[41] The city further argued that streetcars provided for the public welfare and were of a “local interest,” as opposed to an internal improvement.[42] Finally, the city argued that constitutional prohibition against state-funded projects of this type was outdated and needed to be reconstrued to meet the demands of the times.[43] To this, the court replied:
It is said that the constitution was adopted a long while ago, and that this is a gigantic age, in which enterprises are being formed on a scale so vast as to be almost beyond comprehension, and the constitution ought to be given a construction in keeping with the spirit of the age. ... Constitutions do not change as public opinion changes. Their provisions do not mean one thing one day and another another day. … The courts cannot substitute their judgment of what the constitution ought to be for what the people have made it. Its provisions must remain and control until the people see fit to change them in the way provided by the constitution itself.[44]
The court ruled that Detroit could not use its power to tax to subsidize the construction of streetcar railways. Despite the clear prohibition in the constitution, the court noted, additional cases like these were likely to continue:
These were very positive provisions [to the 1850 constitution], and by adopting them the people believed they had rendered it impossible that projects of doubtful wisdom and utility should be engaged in at the public cost. But diseases in the body politic, like those in the human system, are likely to take on new forms from time to time, and they are not to be exorcised by words, or kept off by constitutional inhibitions.[45]
The court was right: This was not the last time the state’s highest court would hear a case concerning streetcars in Detroit. A similar case reached the Michigan Supreme Court in 1907.[46] The court once again decided whether a streetcar system was an internal improvement and held that such a project was prohibited. Chief Justice Carpenter distinguished internal improvements such as railroads and streetcars from common government provisions of parks, water systems, sewers and street lights. The latter all promote public health and safety, whereas the former do not.[47]
Justice Grant agreed with Chief Justice Carpenter’s conclusion, but did so for a different reason. He argued that the streetcar was to be leased and operated to a private party, which would have the effect of taxing all Detroiters for the benefit of a few private interests.[48] He indicated that Michigan case law held that public expenditures on railroads, which operate in a similar way, are not justified, and therefore neither is public spending on streetcars.[49]
Two cases challenging the 1850 constitution’s ban on state subsidies for private enterprise of an entirely different sort were also decided during this period. They both involved the agricultural industry and the Legislature’s attempt to provide aid to certain producers of certain products.
The first case reached the Michigan Supreme Court in 1900 and involved sugar beets. In 1897, the Legislature passed a bill that provided a “bounty” to sugar manufacturers. If manufacturers bought sugar beets that were grown in Michigan for a price of $4 per ton or more, the state would pay them a subsidy.[50] Presumably, the rationale behind this was twofold: It protected Michigan sugar beet growers from competition from growers in other states and Canada, and, secondly, it capped the cost manufacturers would have to pay for Michigan-grown sugar beets. The court held this program to be unconstitutional:
This taxation is for no such public purpose that it can be upheld. There is no power in the state to authorize a tax for private purposes. Taxes can be levied only for public purposes to accomplish some government end. The legislature … cannot take the property of A and give it to B, nor can it tax it for the benefit of B. Here is a private corporation now calling upon the state for a sum of money to aid it in carrying on a private business, most of which money, if paid, must come out of the pockets of people who are not engaged in that business, and who have no interest in it.[51]
Later, in 1907, another case involving agricultural production reached the high court. This time the Legislature did not attempt to subsidize manufacturers directly, but rather attempted to fund an association designed to represent the interests of the entire corn industry, called the Michigan Corn Improvement Association. A sum of $500 dollars was appropriated by the Legislature to this private organization that aimed to create “a deeper interest in and a better knowledge of the culture and improvement of corn.” The auditor general, under the advice of the attorney general, refused to appropriate the funds and the association sued.[52]
The court made short work of this case, ruling it unconstitutional in an opinion that spanned just two paragraphs (the first of which was dedicated to the facts of the case). The court stated:
It is obvious from the foregoing statement that the only persons who will be directly benefited by the proposed appropriation are those ‘actively interested in the improvement of corn.’ The authority of the Legislature to make such an appropriation was denied by Justice Cooley in his opinion in [Salem, 20 Mich 452]. He said: ‘But the discrimination by the state between different classes of occupations, and the favoring of one at the expense of the rest, whether that one be farming or banking, merchandising or milling, printing or railroading, is not legitimate legislation, and is an invasion of that equality of right and privilege which is a maxim in state government. When the door is once opened to it, there is no line at which we can stop, and say with confidence that thus far we may go with safety and propriety, but no further. Every honest employment is honorable. It is beneficial to the public. It deserves encouragement. The more successful we can make it, the more does it generally subserve the public good. But it is not the business of the state to make discrimination in favor of one class against another. The state can have no favorites. Its business is to protect the industry of all, and to give all the benefit of equal laws.’ This reasoning was approved by this court in [Michigan Sugar Co, 124 Mich 677], and in accordance therewith an act giving a bounty for the manufacture of beet sugar was adjudged unconstitutional. We think that decision rules this case, and that the law under consideration is unconstitutional.[53]
Through 1907 then, the Michigan Supreme Court had repeatedly upheld Justice Cooley’s original ruling against all state subsidies for private purposes. This prohibition held for a variety of different arrangements, including local railroad bonding, streetcar railway construction in Detroit, the draining of marshes for purposes other than public health, and direct and indirect support for certain agricultural products and services.