The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1874-10-02
MUNICIPAL DEBT.
Address by Speaker Blaine at
Oshkosh, wisconsin.
Especial to the Press.1

| an address here to-day before the Northern Wis
consin Agricultural Association. His opening
proposition was that public debt was the out
growth of modern celebration, and he proceeded
to support it by history of the rise and pro-
gress of the practice of national borrowing. At
ter brief review he passed to the particular
theme of this address which was Municipal
Debt of the United States
In the outset the speaker said that our form
and framework of government gave extraordi-
nary opportunities for the use of the public
credit. We have first the general government,
which borrows on the faith of the nation; next
the state government, which borrows on the
faith of the state; next the county, when DOE
rows on the faith of the county; next the CITY
| or town, which borrows the faith OF the
municipal credit The four taxes, which the
the system creates, operates at last on the
| same man and each man and each piece OF
| property in some way contributes It's snare
towards satisfying the demand. Each operat-
| ing in an Independent sphere the tendency is to
| enlarge each debt regardless of the dimensions
| and demands of the others. So when the city,
county, state and nation have heaped up their
burdens the citizen finds that while this tax is
increased fourfold the property to meet it has
| NOT experienced similar development and
| growth Our power in this country to cumu-
| late our burdens may be regarded as peculiar to
| ourselves and our marvellous capacity in this
L
| can civilization of which we have the least rea-
| son to be proud.
There are in the United States sixteen cities
having each population exceeding one hun
| dred thousand, and an aggregate population Of
| special advantages which cannot be taken from
| it; each has abundant wealth and still larger
prospective resources. They embrace, when
| taken collectively, the trade of the Atlantic and
Pacific, of Gulf and Lake coasts besides all the
great interior rivers of the continent, and the
converging traffic of thousands of miles of rail-
ways. And yet these sixteen cities, which any
one would think could patiently await their as
sured prosperity, are burdened with municipal
| debts to the amount of $350,000,000, being $50
per capita for their entire population. 1t would
be gross injustice. however, to leave the infer
ence that the average debt of these cities is
| 500, O00, 900 for indeed, single one of them,
the metropolis of the nation, presents debt
embracing nearly one-third of the amount.
The class of cities next in size to those just
referred to, those having each population
over fifty thousand and less than one hundred
thousand are twelve in Misunderstanding an ag-
gregate population of about seven hundred
and fifty thousand. Their total debt does not
exceed $3O,0O0000, giving about $40 per capita
for the whole list
The next class, having each a population
exceeding twenty thousand and less than fifty
thousand, numbers fifty three with total pop
ulation of something over million and a half
Their total debt cannot be less than $75,0OO,-
900, or $50 per capita.
1 include one more class within the scope
of my inquires-those cities and towns
having populations between ten and
twenty Thousand, one hundred and five in
number, and having an aggregate population
of fourteen hundred thousand, and an aggre-
gate debt of $35,0OO,OOO or $22 per capita for
the whole.
Adding these four classes together it presents
table of one thousand and eighty-six cities
and towns with total population of over seven
millions and an aggregate debt of $4,000.
The towns having less than population of
ten Thousand, feel we'll assured have debt of
rs much as $80,000,000, making the total mu
nicipal debt of the country $670, OOO,O 900.
Added to these municipal debts proper, we
find the county debts of the entire county
amounting to about $50 900, and the state
aggregate of S. 14O,0OO0O0 of public debt of
States counties, cities and towns.
The state debts in many instances, both in.
the former and the latter times. have been con-
tracted without due caution, and as natural
consequence the money realized from borrow
ing has been Oftentimes expended with an ex-
travagance 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 expended nth economy. But
venture the assertion, 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 for each dollar
raised and expended. In some cases the inn
providence has led TO even worse results than
this, and 1 think, taking the country as
whole, there is no form of public debt in hich
so much has been given and so little recei lived
as in the direct obligations Of the states.
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 Advancement, and with municipal govern
ments its use at times seems imperatively de-
manded. But in the main, think our cities
have been too ready to draw on the future too
ready to pledge the sYives and fortunes of
posterisy to the payment OF debt which the
generation contracting it is unable to discharge
The old adage that what is 'everybody's bus
mess is nobody's business is nowhere more
more applicable than in the general admniss
taation of municipal affairs in our larger cities
1t is so easy to obtain Legislative authority to
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 us
instead Of leyying severe tax to be paid by
| natural, to have smooth, enjoyable time to-
| day, thinking little of the ills that may over
take us on the morrow. And, following this
ready, convenient, lazy method of shifting the
burdens of to-day, has been the means of pre-
cipitating on many of our most favored and
promising cities vast load of taxation, which
hampers business, Expresses property, prevents
accessions of population otherwise naturally
tending that way, and ends by retardng the
very growth which the debt was contracted to
stimulate
Another evil results from the growth of
municipal debt which l 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 depriv
ing the community of the advantage of his en-
barking in some active business
Too much of the surplus capital has been ia
vted into bonds founded ON this class of debt,
and is thereby removed from an active partici
patton in the business projects of the country
which are thus thrown too largely into the hands
Of men who have great enterprise, but who are
hampered for lack of capital, and are con-
stantly encountering the evils of too widely
extendid credit. 1t may be an extravaganza as
sertion, and yet had almost said, that it 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 op-
portunities for investment, forced into great
business enterprises, the country would be so
much the richer that great number OF the OBJ
| jects for which the municipal debts were con-
| tracted could have been accomplished by tie
| mere process of taxation on the vastly superior
amount of property that would have been thus
created.
| 1t is also matter of serious consideration
| whether these large municipal loans have moi
| had prejudicial effect on the price OF money
| ten ling continually to create strngency in the
money market and raise the rate of interest to
the borrower 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 food the markets with their
obligations at seven pei cent and oftentimes at
higher rate of interest, how can any borrower
on mere individual credit, expect or hope to ne
| gotiate loans at the oldfashiOned six per cent
| rate, which in SO many sections of the country
was formerly the rule.
The speaker then proceeded to consider the
remedies for our want of care in mourning
| debts. They were in the first place wise eau
ton. He thought the Legislatures of many
states had too much power to create debt with
out referring the subject to the people, and
cited the case of Maine-where the legislature
has no power to incur dollars debt except in
cases of extreme public danger, and where an
amendment to the constitution proposed by
two-thirds of the legislature and then submit
ted to the people, is prerequisite to the pledg-
ing of the public credit-as an example which
perhaps other states might follow with advan
tage. 1t might also be wise for state constitu-
tons to define precisely for what ends NUM-
| cpal credit could be used. Finally, he said, it