Evening star. [volume] (Washington, D.C.) 1854-1972, 1878-11-08
THE DISTRICT DEBT,
The CO mmissiOners Propose a New
Plan Of Funding IL.

uc iOlOWluS Tie forthcoming
report OF the District Commissioners will be
read with interest by all taxpayers. 1t proposes
new plan OF funding all outstanding District
Indebtedness, which, if adopted by Congress,
will, it is thought, work great improvement in
the financial condition Of the District, The
Commissioners say:
1.-THE condition Of the streets and sewers of
the city presents the most serious question the
Sommlssloners have to consider, embracing out
lays of an imperative character, which the pres
ent revenue of the District is Inadequate to
meet, except by extending the work through
several years OF time. But such delay is not
practicable. The work should not be postponed;
health, convenience, progress. and the mainten-
ance OF property values, are dependent upon its
being promptly done. Under ordinary clrclm-
stances the treasury OF the District on the pres
ent basis OF taxation would be able to meet all
reasonable demands for Improvements: but the
extent OF rotten wood pavements and the evil OF
overflow from the sewers, have grown to pro-
portions beyond the scope of current revenues.
The burden of the public debts weighs heavt-
ly. Payment of interest alone abSorbS about
One-third OF receipts from all sources, including
the fifty per centum contributed by the United
states. To this sum must be added large
amount for sinking flnd to pay the principal.
District, year afteryear, go to the public debt as
now funded. Three hundred and eighty thouS-
and dollars per annum are required 10 pay OF
the District debt within the time of the matilri-
ty OF the larger portion, and further sum OF
SlGo.Oe0 per annum to pay off the three-SiXty-
five bonds, payable more than forty-six years
hence; In al payment OF s4s0,oOO per year on
the sinking fund account. tits not practicable.
in view OF other current requirements, to set
apart such an amount from the present rev.
enues. Renewal OF bonds must therefore follow
when those outstanding mature.
The SO bonds form nearly tWo-thlTdS of the
Indebtedness for which the District revenues
are made to provide. These are obligations OF
the United states.
The act OF June Il. ISIS. commits the United
states to the payment OF fifty per centun OF the
expenses OF the District government: Interest
and sinking fund for the three-siXty-five bonds
and the funded Indebtedness OF the District
folm large part OF the expenses. Any measure
that relieves the District OF a portion OF the
to the same extent. This consideration has led
us to submit herewith plan OF relief, Which
lessons the yearly requirement on account of
the debt, While securing its eXtlngUishmeat
he responsibility OF the United states. This
Ilan cOntemplateS a loan by the United
states to the District OF tifty-year four per
centum bonds, to be used in reminding all said
outstanding Indebtedness. The District Sec1lri-
ties taken in the exchange to be held as collat-
eral by the United States until this proposed
special issue to the District shall have been
redeemed and cancelled, as proposed herein.
These securities, held as collateral by the United
states, would exceed in amount the bonds 50
loaned to the District. II is proper to add that
the power OF Congress being absolute in the
District, it can fully protect the national in
fereSt In any measure adopted.
The present debt Of the District is. 400 90
Deduct water stock bonds included
in the above, and paid from a
Special Iulu. ACKNOWLEDGEMENTS. 4ZS.nc FI
District debt proper S..940.4ol o.
Add all outstanding 3.65 bonds. -. 49, ,l59 GJ
Total debt proposed to be funded in
L. S. per cent. bonds. 81, ,6S3.G59 ~
District debt payable al pleasure s333,9l1 uD
due January Isl le'9... 2I9.n"9 90
due March lSt, ISl9..... 300 90
Total payable as above ........... sl.2I5.4ll 90
Dist let debt due at future dates. t6J on 10
Add per cent. premium for pui-
chase OF said bonds not yet due,
which are now at premium CT
to per cent ACKNOWLEDGEMENTS. S.. 81 u,
Total per cent. t. s. bonds esti-
mated TO fund Dlstrc: debt
proper. ss,o!s ,s5a %
Annual interest on present Dis
tf1ct dept. Observation-Disclosures. $iSi, 80 50
Al nual interest Gu estimated per
Cents. to fund said debt .. 33a.e45 Ga
Interc:t annually saved by pro-
posed funding said debt. S153.5S% So
Total outstanding a.65 bonds. .s,S,14S,25) %
Amount OF ger cent. bonds TO fund
the same at 81 cents. 1.955.62I 81
Saving in principal OF said debt 10
be paid at maturity by funding
the same as proposed d.............s 81, 1862 ID
Annual interest now paid en- s65
Annual interet on per cent. bonds '''o "
estimated to fuEd the same at 81
cents. NEUTRALITY-SUSPICIOUS.. 47s,255 10
Annual interest saved by funding
said 1865 bonds, as proposed. 49,. 1855 81
Annual interest saved on District
debt proper. Observation-Disclosures. 1880 so
Annual interest saved on 365 bonds 23353 50
Annual interest saved on total debt sl7s.947 80
Recapituiatto,.
Total OF securities now OutStand-
ing, TO be funded as above pro-
Amount OF per cent. bonds esti- ~
mated to fund District debt prop
er, $S273,6 $50; amount of per
cent. bonds estimated to fund the
3.65 bonds, $11.956.627.50.
Total amount Of per cent. bonds
to fund both said debts, as pro-
posed .s20, 2s7 80
Total saving in principal OF these
two classes OF bonds finally TO be
paid. observation-disclosures. s1,453312 so
Annual interest now paid on Dis
tr1ct debt proper er........... SsS4529 so
Annual interest now paid on 365
bonds. -....-............. sol. .S2s 81
Total annual interest now paid. $685. l5s ~
Annual interest on the per cent.
bonds estimated to fund said debt
as proposed. Observation-Disclosures. sO921l 10
Total annual saving of interest on
the above basis OF estimate. Sl769a7 80
The sum Of 1914 yearly invested in these
four per centum bonds at par, will pay of the
total amount OF the proposed ISSUE VIZ: $2O-
230,2I7. 80, in fifty years.
Thus it appears, that by funding the debt as
proposed, there viii be saving Of principal to
be paid at maturity amounting to 81. .453. .sI2 so:
and In payment OF annual interest, saving OF
SIG, ,941 80. This saving of interest invested
yearly In the four per cent bonds at par would
pay OF the entire debt in forty -four (4D years.
Larger premiums may have to be paid in fund
Ing some of the District debt than is assumed in
the foregoing estimate, and the four per cent.
bonds purchased may also be at premium In
the market before maturity. But, in any event.
1t may be confidently and safely asserted that
the entire existing Indebtedness of $2l 6s3. $50.
principal and interest, can be paid on in the
time and manner here suggested, by the an
nual appropriation to that purpose OF the
amount a,o,0 paid for interest alone, viz-soS6.-
1884 per annum.
The lelief arising from such disposttion of
this burden would reach all classes, and the
gain to the revenues OF the District would
amount In few years to millions of dollars
The apportiOnment otherwise going to the sink
Ing fund would then be available for repairing
streets, construction OF sewers and other neceS,