Evening star. [volume] (Washington, D.C.) 1854-1972, 1880-01-13
The District Sinking Fund.


pertaining to the sinking fund of the District oil
Columbia, states that ''Since the transfer OF the
powers and duties of the sinking fund commits
sioners to this Office July 1878, the principal
of the bonded debt OF the District has been
reduced s4ls 326 CT. of which sI79 1861 was old
bonded debt and s23S $50 was OF the three-SiXty-
1--WE loan. The reduction in the annual interest
charge consequent upon the above reduction In
| the debt and the funding operations OF the year
| is $50, 154.11. There would have been greater
reduction of the debt had not the sinking fund
been burdened last year with the payment OF
| interest on the water bonds amounting to
S29, go. The credit OF the District so improved
during the past fiscal year that the market
price OF its securities advanced from ten to
fifteen per cent, and for The first time after
sixty years OF legislative enactmentS the sinking
fund has an actual existence.
Under the provisions OF the act Of June 10,
1879, authorizing the issue OF twenty year fund
ing loan, all the six per cent. pleasure bonds,
amounting to $500, 500, were called in for re-
demption, and interest thereon ceased July Is,
S29, 1861 were also called in, interest ceasing
August 25, 1872 leaving 1923 023 80 of this class OF
bonds outstanding. The total amount included
In the two calls was 1890, 1867; OF which
s1l9gl6.61 was redeemed on account OF the sink
inS-fund, and SSi0,s was replaced by the issue
OF i've per cent. bonds of the loan above men,
TONED. The remainder of the loan, amounting
TO S2Sl 500, was issued for the purpose OF REIN
pursuing the United States for the amount ad-
Eanced to redeem the city of Washington ten
year bonds and the city of Georgetown steam
shows the loans which We're called in for re-
demption being stock OF the old corporations OF
Washington and Georgetown.
The bonds OF the new loan were disposed of
TO the highest bidder by the Secretary OF the
Treasury, to the amount OF s1,O92, 3OO upon
sealed proposals, at premium ranging from So
which was needless, was recommended by the
District authorities without consultation with
or the approval of, the Treasury. It saddled
the District with an absolute 20 year five per
hn
funding OF which 1t was created bore the same
rate of interest, and all of them were redeem
able at the option of the District, and would
within year or two, have been absorbed by the
sinking fund. The rate of interest was too
high. which is proved by their sale at a
prem M in the face Of the fact that
in the District, and that the following
condition was Incorporated in the author
ling act P'ortded, That this act shall not be
United States liable for either the principal or
interest OF said bonds, or any part thereof" Ii
would be difficult proposition to suhstantiate
bonds. The question Is not however, vital
one; for, while the present arrangement con-
Iinues, under which the government contributes
fifty per cent. to the payment of the general ex-
penses of the District, its contribution is slIffi-
Gent to pay the annual interest upon the bond
ed debt of the District, to establish a sinking
I,lnd Ior tne ultlmate redemption OF that debt,
and leave more than half a million of dollars
for other purposes. The lower the rate of in
tereSt on District loans the less the EXPENSES
win be, and the less the government must con-
tribute as its prOpOrtionate share. 1t is there
fore, to the advantage OF the government to
have the loans Of the District made through the
Treasury department at as low rates as possible.
without conditions dscouraging to investors.
and 1t is accordingly recommended that that
course be pursued hereafter.
APPROPRIATIONS FOR SINKING-FUND AND IN
TEREST.
The acts making appropriations for the ex-
penSeS OF the District of Columbia for the fiscal
year 1879, did not specify the amounts applica-
Die to each head OF expenditure, but appro-
pr1ated gross sum OF S1,716 1923 as the pro-
portionate share of the United States. The act
OF March 3, 1879, appropriated a like amount
y, l5o $3.50 :, Tor the interest and sinldng-fu
on the funded debt for the current fiscal year.
and also made permanent provision for the
sinking-fund for the 3.65 loan. The face value
Oh the 3.65 bonds required to be eXtinguished In
order to carry out the provisions of this enact
ment, is sl13 s65. SO for the first year and like
amount for each succeeding year, plus the in
tereSt on the bonds previously purchased, Ac-
cordingly, Sis, 800 in S.65 bonds were purchased
for the fiscal year 1879, at cost of $944133I
The face value of the bonds purchased for the
current hscal year was 1929, $50, and their cost
stos f s. t The amount required to be pur
the cost at an estimated market value of 911I
per cent will be Sill, S40.sO. The price to be
pald Tor the bonds for the sinking fund for next
year is, OF course. a matter of conjecture but
the price of 81 has been assumed for the rea-
son that at that price the investment would
yield four per cent, which Is the rate at which
me CALCULATION Tor the entire sinking fund was
originally made. The most profitable
course for the District is to purchase the bonds
which are most burdensome to the taxpayers
and whose extinguishment would yield the
largest revenue to the sinking fund, whether or
not they are of the loan for which the sinking
fund is to be maintained. To obviate these OBJ
lecC0ns, as well as to establish the sinking fund
on permanent basis and placed all question of
its maintenance beyond the reach of controversy.
the recommendation is renewed that perma-
nent annual appropriation be made for the in
tefest on the entire funded debt and for sink
ing fund for the old debt, of an amount suffi-
Gent in connection with the permanent appro-
prat1on already made for a Sinking-fund for the
three-stxty-five loan, to eXtinguish the entire
deot by the maturity OF The three-SiXty-fye loan.
and that the same be advanced to the Treasurer
from time to time, on his reQuisition. The draft
OF bill to effect this object is accordingly suo-
mtted. The amount 81, sOO, OOO) is the Same as
that estimated for by this Office and ap5ropri-
ated by Congress for sinking-fund and Interest
for the fiscal years 1879 and 1880, 81 1855 5SS Soy
with with $1,000 added for sinking-fund and in
terest ON the Water-stock. The latter item has
been reduced s193.55 below the amount now re-
qu1red by law, in order to make the gross ap-
priation round amount"
THE WATER FUND.
Under this head the report says: Unfortu-
nately for the sinking fund, the entire receipts
from water rates have been swallowed up by
the a, current expenses OF the water department,
and not dollar OF the water fund has been de
voted to the payment OF the sinking fund or in
terest on the water stock, since the powers and
duties OF the commissioners of the sinking fund
were deVOlved upon the Treasurer : II
Is now Indebted to the sinking fund for two
years interest advanced, amounting to $50 22O,
besides being 100000 in arrears for the sinking
tund on the water stock, making total defic-
tency of SS9,22O There is little or no present
prospect OF this amount being made good out OF
the receipts from water rents, and the proba-
ollty Is, that, unless some change is made in
We ctr tt-il
continue to be deducted from the appropriation
for the sinking fund on the remainder OF the
debt, while the obligation TO maintain a sinking
fund for that stock must necessarily be disre.
garded The estimate for the sinking fund for
the remainder OF the debt has already been re-
Guced 10 the lowest amount consistent with
good faith 10 the creditors OF the District. =
The only way 10 maintain the sinking fund
at the required amount is to include the amount
required Tor sinking fund and interest on the
water stock in the regular appropriation for
sinking fund and interest on the funded debt.
as recommended by the Secretary OF the Urea.
Sury.
SPECIAL IMPROVEMENT ASSESSMENTS.
Appended to the report is an abstract of the
provisions OF law enacted from time to time in
regard to special assessments in the District.
The report says: Doubtless 1t would be difficult
TO md in any other community of equal intelli-
gence such systematic disregard OF the plain
requirements OF law as has been shown In the
management OF these assessments" The va
rious laws are then quoted and the action OF the
District authorities under them, and the report
continues: There Is no published information
showing what amount OF tax-lien certificates
should have been issued and delivered to the
Nlo,, tl~~