The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1877-06-28
OUTSTANDING CITY ORDERS.
Shall they be BOndsdP

WIG uSuN4CuCy VA CApCuoOo
which was the natural result of low
assessed valuation of property, by the
mayor and clerk issuing orders, with ten
per cent interest, in excess of the amount
of the city's income or amounts receivable,
and this method has been continued from
year to year until the amount of outstand-
ing interest bearing orders reaches in
round numbers $l70,000.00.
Unless some provision is made whereby
this indebtedness can be aggr sgated and
made sum certain, with fixed rate OF
interest, and definite day ofpayment, the
result will continue to be as heretofore,
that new orders will be issued not only 20
meet principal but interest, and in the
lapse of time by thus paying compound in-
terest, or interest on interest, the city will |
be swamped with an accumulated interest
debt for which it has never received any
equivalent whatever except the forbear
ance of its creditors in not exacting pay
ment at the time indebtedness was created. |
So far as is apparent to an accountant,
or 6nansier, there is no check whatever in
the present system to the action of the
mayor and clerk as to the amount of orders
they may choose to issue, and in the event
Of collision between these two city officers
it might be extremely difficult, if not in
possible, to detect their operations sup
posing it possible they were convert
ing the public money to their own private
uses. The high character Of all the gen.
tlemen who have heretofore filed these
respective positions in our city, forbids
even the suspicion of any corrupt practices
on their part, and it is only the possibili-
ties Of such state Of affairs that is iu-
tended to be presented.
As is well known, these orders are made
to bear ten per cent interest. 1t is now
within the power Of the city to fund all
this species Of indebtedness at rate of six
per cent interest per annum, which would
make a saving Of four per cent yearly, or
10 other words save $6,SOO,-in interest
for the coming year Capitalists stand
ready to take the city bonds for the
amount Of the outstanding orders, say
$l70,000.0O less or more, &C six per cent,
provided, the city will place the said in
debtedness within the legal limit of FIVE
per cent Of the assessed valuation of the
taxable property within its jurisdiction.
There has never been heretofore, nor is
there now, any disposition on the part of
our citizens to repudiate in any form the
city indebtedness, still the condition of our
financial affairs admonishes us to look
closely to all out goes of money, and
wherever 1t is practicable to diminish the
outlay, or by legitimate means reduce our
rates of interest as well as principle, it il
sound economy to do it.
The assessors valuation for the city in'
Guiding railroad property, for 1876 wal
$4037. 34S. If the assessor were to in
crease the valuation for 1877 forty-fve pei
cent, it would give a total valuation o.
$5,S54l56. Five per cent upon thi;
amount would be 1922, 7O7. The tota
amount of city debt as appears by the las
annual statement was then 1921 1872 l6.
The as per cent increase of assessed
valuation would make the amount sufi
GENTLY large so that there could be n
question as to the Legality of the bond
which might be issued in funding tn
$4,000 of outstanding orders. Person
who have made inquiries say there is q
doubt under such circumstances on
bonds could be disposed of at par bearin
per cent interest
Thus far we have confined our remarks
mainly to the simple statement of VIVA
might be lawfully done. As to tn
desirability or expediency of following tn
particular method indicated we leaye tina
for the people to consider among them
selves THE ARGUS, however, does con
slider the system of borrowing money up
on interest bearing orders to pay previous
issued and outstanding orders of the sam
kind, thus accommodating an indebtedness
ofinterost upon interest, as being too in
definite and too irresponsible, and too ex
pausive to be justifable in any larg
amount, and sure, if. persisted Gin, to emf
disastrously to the citys interests soOne
orlater
What is best to be done is simply
question of finance, and should be treated
and discussed without the slightes
reference to anything except its ecOnomi
relations, and the possibilities Of how i
may best be managed,
The subject of funding their debts, o
refunding, at reduced rates Of interest i
attracting the attention of the people il
other portions of the state. as we'll as il
adjoining states. Ten per cent is too higl
rate Of interest to be paid in these times
tits more than money is worth compared
with what capital can realize in othe
ordinary legitimate investments, and if ou
city can put itself in condition to do it
there is every reason to believe it will b
NO inconsiderable advantage to the tax
payers in the long run to fund, and per
haps even refund its obligations in bond
bearing lower rates of interest