Knoxville journal. [volume] (Knoxville, Iowa) 1874-1986, 1876-02-10
Running In Debt.

The enormous increase Of local and
municipal Indebtedness Of late years Is a
subject 10 which public attention Is often
directed. Gov. Hartranft, in his recent
message to the Pennsylvania Legislature,
showed how large this increase had been
In thirteen of the principal cities Of the
country: and Gov. Hayes devoted the
larger portion Of his inaugural address to
the Ohio Legislature 10 discussion OF
the evil. with special reference To his own
STATE. Thai II has attained dimensions
which jmperatiyeiy demand the applica-
ton OF 4 remedy must be obvious 70 every
one who has even cursorily looked into the
matter: but IL Is not 50 clear on what prin-
ciple the remedy should be based. Alegal
restraint on the amount Of tax which may
be imposed by municipality has been
applied with good results in Ohio; but IT
Is evident that such restraint. unaccom-
panied by similar check on the amount
Of Indebtedness which may be incurred,
Is practically neutralized. Capitalists are
always ready to take city or county
bonds. and 80 long a. they are town
may issue bonds for an indefinite sum
without the dsagreeable necessity OF I'M
posing taxes sufficient TO liquidate the
debt. New and costly improvements may
be projected, far beyond the means or the
necessities Of the place, and II the money
for them can be raised on long State
bonds, local pride will demand that they
be made, and the municipal debt rolls up
without protest In the present, or provision
for the future.
Gov. Hayes suggests that every author
ity given municipality 10 create debt
be accompanied by an imperative require
mcnt that a tax sufficient 10 pay IL of
within a brief period should be imme-
diateiy levied. The question at once sug-
gcsts Itself: What should this period be-?
Obviously, 1t should vary with the char
acter Of the improvement for which the
debt Is incurred. To establish a fixed
limit within which all classes Of debts
should be paid would clearly be unjuat
and oppressive. What would be II reason
able period in which 10 pay off a
debt incurred for building school
house or widening street. would
be unreasonably short for the pay
ment Of one incurred for establishing
sewer system, and still more for debt
contracted for constructing water-works.
The benefits derived from the latter would
long Outlast those Of either Of the former !;
and the equitable rule would be To make
those who receive the benefit pay the cost
Of II. To do this, debts incurred for
municipal or county purposes must be
classed and the periods for their payment
varied to correspond. BY this met hod,
and by making the total indebted ness
which town may incur bear due pro.
portion of the assessed valuation of the
place, an effectual remedy may be found
for unrestrained local extravaganza.
One State has already taken long step
In this direction. The Massachusetts,
Legislature, at its last session, passed a
law In relation to municipal indebted.
ness, which Is based on the principle OF
regulating the debt of town by It's as
sessed valuation. Special provisions
were necessitated by local circumstances,
are applicable 10 every State. IL CLASH
fies rlunicipal debts under three divisions,
with regard TO the periods in which they
must be paid. Debts incurred for all
purposes other than building sewers or
water-works must be paid within ten
years those incurred In constructing main
those incurred in supplying town
Win puIcWhttF Hihy NC paiu III tlii
ty years The maximum debt which a
municipality may incur Is three per cent.
of the assessed valuation. These are the
main provisions of the law, but there are
Others regulating the levy of taxes and
for establishing sinking funds which are
equally sound. The time In which the
law has been operative Is too short to per
nit final judgment on its practical work
ings; but that II Is based on the soundest
business principles Is sufficiently clear. To
limit indebtedness by the amount of CAPT
tai is rule which isequally applicable TO
municipalities as 10 private corporations
or Individuality. y. Times.