The Portland daily press., 1877-02-08

of cities in this country which have become de-
populated to greater extent by excessive taxa
ton arising from enormous Indebtedness IMAM
by fire or pestilence, and impoverished more
etfectually than by war or famine. Another
thing is to be considered, and that is whether
the municipal Indebtedness has been incurred
for productive purpose, such as waterworks'
sewerage and the like, which yield an income.
y Unfortunately for our city, as already seen, by
far the larger part of our debt has been con-
tracted in the aid of railroads, which have de-
faulted in the payment of the interest promised
to be paid by them, and the prospect is notvery
fattering of their resuming payment very soon,
so that the principal part of our debt rests as
dead weight on the city.
This was subject that first claimed the
attention of the commissioners, and they at
once came to the conclusion that the indebted
ness of the city had reached the utmost limit
to which it ought to go, and that 1t would be
unsafe to add to it under any pretence and
that any attempt, even, in that direction, would
be highly detrimental to the city's interests
and credit. And, further, they were of opinion,
considering the facility with which municipal
debts are contracted, and that borrowing when
once resorted to is so easily repeated also, COLI
sidering the Importance of setting before the
public, not only the natural business advantages
we possess, but also of holding out the assur-
ance and pledge that our permanent debt had
reached its limit, and that taxation in the
future would not reach beyond its present
rate, the commissioners thought it best to
cause an act to be framed, with a view of its
being passed by the Legislature, prohibiting
the City Council from making any addition to
the permanent debt of the city until the same
shall be reduced to five per cent. of the valua-
ton, and after that, not to exceed that per
centage. This act has met the approval of the
present City Government and has already been
favorably considered by the Legislature now in
session. And it is hoped that its passage will
suggest the wisdom of constitutional amend
ment, whereby all the towns and cities of the
state may be restrained within like limit, from
contracting debts for any purpose.
Another point of Importance to our tax-pay-
ers came under the consideration of the COM
mission. In-what manner shall the amount
necessary to pay the interest on these railroad
loans be raised, SO as to be the least burden
some, and at the same time reasonable pro-
vision made for meeting the principal when it
shall become due? Hitherto, this interest has
been paid by the issue of new bonds,-a very
bad policy,-and one which has already, it 10
understood affected unfavorably the credit of
the city. 1t could have been adopted only as a
temporary measure until it was fully determin-
ed what course should be pursued in the prem
ises. 1t will be readily perceived that this
could not 60 on for any length of time. In
little over ten years. adding the interest to the
principal, the debt would double and become
altogether beyond control. 1t is a cardinal
principle in the conduct of the financial affairs
of municipalities, that annual interest. or
indeed any ordinary expenses of the current
year, should be paid by the taxation of that
year, and never carried over to future years.
But on the other hand, it must be considered
that our rate of taxation is already as high as it
ought to 60, consistently with the best interests
of the city. Every one sees that the policy of
the city should be to increase by all methods its
population, capital, merchandising, manufac-
turing and business generally. If our popula-
terest would practically be reduced one-half.
Hence it is important that no check or him
drance be put to this increase by oppressive
taxation. Our average rate for the last twelve
years has been So 81 on hundred dollars,
ratio quite large enough; and the problem is
how this railroad interest may be included in
our taxes without raising them above this aver
age.
There are only two ways in which it can be
done. Under the present ordinance of the city,
an amount equal to five per cent of the mum
icpal debt is raised each year by taxation, as a
| sinking fund wherewith to pay the debt at ma
turity. This is higher per centage for this
purpose, as the Commissioners think, than is
necessary. For instance, the time in which the
city bonds are usually issued is twenty years,
and the rate of interest per cent. Suppose
the city issues it's six per cent. bonds to the
amount of 100000 on that time. Five per
cent. of this amount is included in the taxes
l each year to pay the principal, but the accu-
mutations Of the sinking fund exceed the prin-
cpal several years before the maturity of the
bonds. In this way the amount raised for
sinking fund is unnecessarily large. By re-
/ arranging THE sinking fund, and diminishing
| the yearly amount to be raised to a more reas-
! enable, bat still sufficient sum to feed it's
one of the methods suggested by which to keep
down the taxes to their present rate.
The other and the principal method is by the
/ reduction of our city expenditures. The Com
missioners are satisfied that the yearly appro-
priations OF the city government without des-
l troying the efficiency in any of its branches.
/ may be cut down to such sum that, with the
aforementioned re arrangement of the sinking
| fund, the rate of taxation may be held where
it now Sand this is the opinion of those best
/ acquainted with the financial concerns of the
| city, and best qualified to judge in the premi-
| ses. The conviction has been growing among
| our citizens for long time, that our municipal
expenses have been too large; that we, as a
| city, are spending too much. Now that this
| additional burden is thrown upon US, we must
/ curtail it every way possible. 1t will not be
| too much to ask our next city government to
/ examine the cost of each department., to go over
thoroughly the list of appropriations in detail
and ascertain what savings can be made, and
restrict expenditures in respect to many things,
which under moro ProPitious financial skies
might properly be incurred. Economy we are
l aware is virtue much talked of and commen-
ded in the abstract, but the difficulty is to ap-
ply it in the concrete, in any particular case.
/ When onesof our public servants has some pet
scheme of his own to further, he is very apt to
argue that, while the greatest economy in the
| administration of the city's affairs should be
| used, yet in his particular case an exception
should be made, and the economic law sus-
/ pended. But inasmuch as it has become
l necessary, not only for the coming year, but
during successive years for the city to meet ex-
| troardinary obligations, we cannot too strongly
urge the exercise of self denial, in the matter
of expenditures, and the absolute necessity of
retrenchment; municipal corporations as we'll
| as individuals must live within their income.
The former as well as the latter must do with
out many good and desirable things, when they
cannot pay for them. The chief officer of one
of our neiehboring cities has not thought it
undgni6ed to quote, in this connection from
| the sayings of that famous master of finance,
our friend, the inlmitable Mlcawber and we
may do the same "Annual income, twenty
pounds, nineteen and six,-result happiness
annual income, twenty pounds;-annual ex-
penditure, twenty pounds ought and sx;-re-
suit, misery" A little city of thirty-five thou
sand inhabitants, cannot engage in all the en-
terprises and undertake all the so-called inn
provements which other cities of ten times the
| population and wealth indulge 10. There is
| such thing as being too spunky.
1t is to be remembered, also, that our high
rate of taxation for the last dozen or twenty
| measure by railroad losses. That experience
| is reserved for the future. Hitherto the only
| addition to our taxes by reason of railroad aid
has been the interest on the 100000 subscrp-
l TO tne STOCK OF LIE f0rtanQ u OgdenSburg
Company, $42. 900 per annum. An enumera-
| ton of portion OF our expenditures. in addi-
| ton to the foregoing for railroad purposes, in
| the past, will show the cause of our present
high taxes, as well as the necessity for re-
| trenchment in the future.
| The city paid for the construction of
Great Eastern wharves,. ............. 100000 90
1t expended upon the erection Of the
new City Building ................... 263,779 70
Upon rebuilding the same. ........... 1855, 1888 76
| In the erecting of the North School
house. .......................... 123,s54 "a
| In purchasing the new market lot...... 1883 90
| Upou Lincoln Park 935O5 Al
| 1t has paid, since 1866, for damages and
laying out and widening streets. $50. 314796 76
| In the purchase of Gait wharf . 10000 20
There has also been raised by annual
taxation, since 1861, for the sinking
| fund.-. OBSERVATION-DISCLOSURES. 1878 43
Since 1867 there has gone into taxes
for payment of interest. ........,... I'LL PIT co
These expenditures,-many of them indis-
pensable,--Others desirable for an intelligent
COMMUNICATIONS very questionable, are at
least suggestive of what may be done in the fu.
ture by way of economy and retrenchment
They are also indicative by what the city has
already done by meeting these enormous out
lays, Of its ability to pay promptly every dollar
of its present liabilities. Portland will never