Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1879-05-17
EVILS OF MUNICIPAL IN
DEBTEDNESS.
A Lecture by Judge Cooley, of
Michigan-The Wrong of Mum
icipaI Debt Except for Perma-
nent Improvement, u
Renortcd for tho Baltimore Sun.

Here and there on the Atlantic border
the traveller sees signs of an old railroad,
with worn out ties, rusty rails and
general air of bankruptcy, and he Is told
that the road is i'm the hands OF re-
ceiyer. As we 90 further West this Is
seen to a greater extent, and beyond the
Mississippi there is hardly road which
has not these characteristics. The NOM
inal purpose OF a receiver Is, OF course
10 help the creditors in obtaining their
demands. But often when this result
is reached the receiveris not discharged,
the existing condition OF things becomes
chronic, and the receiver IS changed IN
10 the perpetual manager. He is per-
mitted 10 make new debts, and as they
are made the interest on the old ones
increases, and the receivers charges
swallow up everything. 1t Is aiact that
a road in the hands of court Is prOduc-
tive of anomalies, and legal rights are
converted into more equitable prlvl-
leges. 4 patronage is conferred on the
courts as much as on member OF Con-
gresS, and the possession OF this power
bv the Judge has the effect OF weaken
ing the confidence of the community IN
his judicial integrity. The necessity
which exists for placing railroads under
the protection OF the courts Is pubic
misfortune. Sometimes the roads in
yoke this protection for other purposes
than To satisfy their creditors, through
the aid of friendly stakeholder. who,
tor the time being, becomes the plalntl1,
and the reasons for all these evils Is
simply to be found in pushing forward
railroads i'm excess OF the demand Tor
their facilities. In what way, it may be
asked, have such things affected NUM-
palities?
For fifteen years the people OF the
country have been labOrlng under
heavy national debt. With heavy taxa
ton that debt has been perceptibly d.
minished, and vet even in our day II Is
enormous, and public debts have be-
come familiar objects. a national debt
NAV be said to have some compensation
about it, and is sometimes looked upon
rs a benefit to the country, but no such
statement can be affirmed oil local debts.
Sometimes, OF course, city has rlght
10 create debts for the purpose OF laying
out parks, buildingCity halls or lmproN-
inc streets, but true wisdom lies rather
i'm restricting them, To say that the To-
cal debts of the country approach near
ly 10 81. 500. 900 900 would not be an eX-
aggcration. They touch the honor OF
the country more than national debts;
they do not spread equally on all local
tiles, public discomfort is created by
them, and danger OF bankruptcy en-
frpFtH1
debts incautiOuslv than has the general
government for works OF internal I'M
provement, and even canals, when com
plcted, have brought only an indirect
benefit City debts are the outgrowth
of speculative periods. Within the past
ten wears the debts OF municipalities
have more than doubled, and when we
remember the war purposes Tor when
those of the previous ten years were
contracted. and see how cities have now
increased them, we cannot but wonder
at their blindness and audacity.
Debts fer railroads are not contracted
for purposes Of municipal government
but the others spoken OF are legal OBJ
iects OF local expenditure. And yet 1t
is a matter of duty that city shall not
subject the local government To the bur
den of debts out OF all proportion to the
purposes for which they are created.
Debts formed in the infancy OF city
opprcss it during all its life, and its fu-
ture is burdened while the present only
receives the advantages. Look to Mem
phis, which has a debt more than equal
io one of siXty-five millions OF dollars
for Baltimore. Its population is fearful
of the future, its government Is demon
allied, its streets are dangerous through
torn up pavcmcnts, and its property Is
unstable. To compare such city as
that with Baltimore, and her widening
streets. her beautiful buildings and her
fast extending commerce is of course
impossible, the only similarity beng
that both have debts, the one crushing
and the other borne easily. This dlsas-
ter of Memphis began with grants to
railroads, then the issue OF scrip to pay
inc contracts. and then the funding OF 1t
i'm long time bonds To-day the city is
i'm utter and hopeless bankruptcy, and
the State, at its request, has taken back
its charterOimunicipal goyernment,and,
as trustee, has appointed receiver, but
the federal courts have done So also, and
the anomaly is presented OF a city in the
court of chancerv. Will chanccry, after
selling all the City'S salabie property,
lew taxes, run the local government ana
appoint the police Will 1t order the
receiver 10 issue debt certificates when
they are needed, and will the case be-
come a second Jarndycc ". Jarndyce,
lasting until the lawyers fees have cX-
hausted il. thus adding a new horror to
bankruptcy and a warning against IN
debtednesS.
The evils of excessive municipal in
dcbtednCss are many. Ii leads To DIS
trust. uucaSineSs and doubtful meas
ures bv creditors. Another dlSCOntent-
cd class will also make its appearance,
namely, those who are compelled to
my and who have received no benefit.
This produces the proper atmosphere
for the operations OF the communist, rs
whatever antagOnizes labor and wealth
suits him. and the bloatCd bondholdCr
* ALWAYS mathematical i'm times of d,-
prrssion. This indebtedness criplcS
the ability of acity To provide for current
needs. Ii tends To weaken the sense OF
the Sense of public honor, which Is
most sensitive when steady industry
receives a fair compensation, and is least
so when business is paralyzed. The
evil reaches the taNpIylng class. Inc
very sentiment of rivalry which has led
IN the creation of the debt brings dis
content when rival city Is seen out
disr9nciug it. and all its schemes are UNI
profitable. for no load is so heavy as
that which man carries for his rivals
benefit.
Excessive Indebtedness not only
tempts city to dispose imProvidently
of public property and franchises, but
l. tends To drive away class OF people
much needed in it. 1t is a general be-
lief cities are overpopulated, that
the professions are Ovcrcrowded, that
them ,rcantIle classes are % nun eros,
and that there is an ovcrProductlon IN
manufacture. This belief, to certain
extent. is Just, but when such a condI,,
ton of things exists it is an abnormal
,,a aDI will cure itself There can