Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1874-10-02

of State, county, and municipal indebtedness-an
while do not assume to give details or vouch loi
absolute accuracy, j think the totals have given
may well be taken as approximate reliable state
ments. The difficulty in attaining perfect exact
ness of statement results from the imperlect man,
ner IN which statistics are gathered IN the several
States. | have found, indeed, very lew States
where the State officers were authorized by law to
keep anything of record in regard to debt except
the direct obligations of the State. In Maesachu-
sets where great attention is paid to accuracy OF
statistics have been enabled TO get precise In
formation-and the entire footing of that Com
monwealth, of State, county and municipal debts,
shows grand total of ninety-seyen and hall
millions ($97 SOC, 000)-subject to sinking fund
deduction Of eleven millions Isl 600 0ol-leavng
eightysix and half millions (S6, 50o,0oo as the
net debt of that State. A very large burden 1t
would seem--and yet such is the wealth of the
State that tho entire debt does not constitute
more than four per cent. OF its valuatlon-and
probably not two and half per cent. of its
actual wealth.
The State debts in many instances, both in the
former and the latter times, have been contracted
without due caution, and as a natural consequence
the money realized from borrowing has been
oftentimes expended with an extravaganza which
would hardly be tolerated in the disbursement OF
moneys raised by current taxation. do not
desire to make my remark so sweeping as to
include those States where loans have always
been negotiated with care and the receipts ex-
pended with economy. But venture the assei-
ton, based on some scrutiny into the facts, that
taking the aggregate of State debts as they stand
to-day and there has not been realized on the
average fifty cents of palpable, permanent value
tor each dollar raised and expended. In some
cases the improvidence has led to even worse
results than this, and think, taking the country
as whole, there is no form of public debt in
which so much has been given and so little re-
ceived as in the direct obligations of the States
/ am glad, however, to be able to congratulate
the proud and prosperous Commonwealth whose
4 49, tAntt IH1Ns
is very small and is rapidly decreasing, and that
in consequence thereof you can realize to your
selves, and assure to those who may cast in theii
lot with you, that an inexpensive government and
light taxation are your comforting prospects fol-
the future. And what is true of your state i.
no less true Of your sister States of this great
section. Taking the seven great States of the
northwest, and with an aggregate population OF
more than eIeuen millions On 100000 and proper
ty worth over eight thousand millions of dollars
($8 000, 600 000), their combined Stale debts are
less than twenty live millions ($25000000). Had
these great Commonwealth exercised as prudent
a care against county and municipal debt they
would present to-day the most fattering balance
sheet, venture to say, of any civilized commu
mites on the face of the globe.
In regard to the aggregate Municipal debt OF
the country it is not of course to be inferred that
it could all have been wisely avoided. Credit
prudently used and safely guarded, is one of the
great engines of modern civilization and advance
times seems imperatively demanded. In many
cases the public health has required that debt be
contracted for supplies of pure water and for sys-
TENS Of drainage and sewerage, and occasionally
for other forms of public improvement essential to
the growth of the community. Bat in the main,
/ think our cities have been too ready to draw on
the future too ready to pledge the elves and for
tunes" Of posterity to the payment of debt which
the generation contracting it is unable to dis
charge. Expensive Municipal buildings, loan Of
IN ants do MT nt cd md off
visionary, have led in some large cities to growth
Of debt for which there is no corresponding return
of pecuniary profit, and no adequate advantage in
any form. These debts have in many cases been
contracted carelessly and without due reflection.
The old adage that what is "everybody's business
is nobody's business" is nowhere more applicable
than in the general administration of municipal
affairs in our larger cities 1t is easy to obtain
Legislative aetherity to contract debts; it is so
easy to sell good city Bond to the capitalist who
highly prizes such forms of security; it is so easy
to roll up debt TO be taken care of by those who
come after as instead of levying severe tax to
he paid BY ourselves; in short, it is easy and
alas so natural, to have smooth, enjoyable time
to-day, thinking little of the ills that may overtake
us on the morrow. And, following this ready,
convenient, lazy method Of shifting the burdens
of to-day, has been the means of precipitating on
many of our most favored and promising cities
vast load Of taxation, which hampers business,
Expresses property, prevents accessions of popu-
ends by retarding the very growth which the debt
was contracted TO stimulate.
Another evil results from the growth of NUM-
cipal debt which think has not been sufficiently
observed 1t is the facility which such debts give
to the capitalist for ready, safe, and profitable
investment of his surplus-thus saving him from
the trouble, and depriving the community of the
advantage Of his embarking in some active bust
ness Take for instance prominent and wealthy
city-and do not refer to any particular one
and fhis will find n he its history and
ence at one or more periods of its prosperous
career. Its banks and other places of deposit are
full to overlooking Of money owned by its leading
capitalists, waiting for an opportunity to invest,
and carefully examining into different branches OF
manufacture, into improvement of real estate by
fine blocks of stores, into the outlook for new
railroad, into project for a line of steam
packets-all OF any one Of which would greatly
contribute to the development and growth of tn,
city in question. just then, however, as thest
capitalists are about to invest their money in som,
one of these channels of gain to themselves and
profit to the community, another set OF gentlemen
having great influence with the Municipal Pow ers
that be, commit the city TO some new scheme OF
improvement, and from three to five millions OF
frst-class per cent. bonds are placed on The
market-and our capitalists suddenly conclude
that nothing presenting SO little risk and sucn ID
clean margin of profit can be found in manuiac
lures, or blocks Of stores, or railway shares, o.
steam navigation companies and they accordingly
stow away their odd millions in city Bonds an'i
devote themselves thenceforth to the enrolling
occupation of cutting coupons.
Though the foregoing purports 10 be single
case, it illustrates a greet truth, worthy to be
borne in mind that too much of the surplus CAPT
tai has been invited into Bonds Of this kind-and
is thereby removed from an active participation
in the business projects of the country-whch
are thus thrown too largely into the hands OF
men who have great enterprise but who are
hampered for lack of capital and are constantly
encountering the evils Of a too widely extended
credit. 1t may be an extravagant assertion, and
vet bad almost said, that if the hundreds of
millions Of capital that have been hidden away in
the municipal bonds of the country had been, by
the absence Of such opportunities for investment,
forced iato great business enterprises, the country
would be SO much the richer that great number
of the objects for which the municipal debts were
contracted could have been accomplished by the
mere process of taxation on the vastly superior
amount Of property that would have been thus
created.
II is also a matter Of serious consideration
whether these large municipal loans have not had
prejudicial effect on the price Of money-tend-
ing continually to create stringency in the money
market and raise the rate of interest to the bor
rover and the business man. There is loud
outcry in all quarters against the high rates
charged for money, and yet if States and great
cities will flood the markets with their obligations
at seven per cent. and oftentimes at higher rate
Of interest, how can any borrower on mere indi-