Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1880-12-08
Debts and Sinking Funds.

pie ofro.iticai economy as vel as Of
| morals, that where Debt. ave to be
paid by taxation nosdebt ought to be
created, unless the act of its creation
be accomplished by the imitst on OF q
special fund TO run witt il in point of
time pGTi loassu, with view to i.s
ultimate payment" But our state,
county ard municipal governments
pay no heed t, this sound principle.
They create debts iunning up to hun
dred thousands and millions, and make
no provisions tt inset them. 1t is not
just to posterity to burden'it with the
debts Of our own contracting. Surely
our Legislators act hastily aud reck-
lessly in making debts. If the laws
under which our state bonds we're
issued had been carefulIy drawn
providing for sinking funds we would
never have b-en brought to the present
situation, or at least, there would not
have been so good reason for CON plaint
on the part Of tax payers. We would
have had no question of reputation
to agitate US.
Our county and our city are going on
In the same unguarded and careless
manner, making huge debts and suf,
fering them to run TO maturity with
out thought as to how they are
to be paid. Is il not time we
were beginning t, look ahead,
guarding against any further reckless
debt~creating legislation, and seeking
to remedy as far as may be the evil
steps of the past?
Why should not the general assem-
bly, at the approaching session, when
1t shall have settled the state debt,
, provide not only for the interest. by
, making the coupons receivable for
taxes, bat for the ultimate redemp-
ton of the principal?
And why should 1t not enact such q
law as will enable counties and cities
to create sinking funds to meet present
r and future Indebtedness?
/ beg to present for the eonsidera-
tion of those OF your readers who may
take interest Ia such mat era, a plan
for operating a sinking fund which,
: it strikes me. might be used with great
: success in either state, county or mu-
nicipai affaiFs. It is net original. 1t
was used some years since in Memphis,
aud doubtless if it had been begun in
tins that city might have been saved
J its present humiliation. The plan is
, legal, for it has been tested 10 the high
est c1urts. l can not See in it any in
jtsttce to creditors. That feature which
provides that the Indebted corporation,
through lis ommissiOners, may pure
chase in its obligations at the
market price may have the ap.
pearaDee Of dealing In manner
which high spirited business men
would not commend or use In their
own affairs, Dut es it works 30 injus-
= tice I think it not seriously objection
able When the creditor is under the
necessity of disposing of his security
for what it viii bring in the market
aud before its maturity, why should
2 not the debtor, as well as any other.
= seZs the opportunity /, make the
prof, and so relieve the ax-payers
! STATE, county and municipal bonds are
often at large discount, more because
OF the long time they have 10 run than
3 because of any discredit of the maker.
: Only capt. alsts can hold them, and
% when any are to be bought they really
have the fixing Of the price. They can
depress or enhance, as it suits their
8 purpose. I see no reason why the
3 debtor should put himself or itself in
X an attitude to take advantage OF every
define in price of his or its obligations
inasmuch it is brought about in the
. manner indicated. OF course it would
:, not be honorable or fair for q corpora.
Q ton, by any act OF it's own, to depre-
= cist3 its bonds in order t. make fol
itself profit. Itshould pay promptly
the IL tsrest accruipg, and should pre-
: vide for the principal, but If any
! creditor wishes. for any reason. to part
t with his bond at lees than its facs
$ value let the corporation bs in con-
o dition to buy it.
THE PLAN.
|, A tax Is to be levied for the sole
purpose of creating a sinking fund, tC
d be used only in retiring the bonds.
+ 2 This tax Is to be collected iu
I money and separate account thereof
= kept BY the collector and paid over in
accordance with the provisions of the
ordinance or law.
8. Sinking fund commissioners shall
. be appointed, who shall give bond and
{ take an oath for The faithful admins
I trstjon of the sinking fund.
: 4. The tax collector to pay over
monthly to the commissioners the
sinking fund tax.
5. The comptroller OF the city treas.
/ ury shall keep an account with the
= commissioners, charging them with
: the amounts paid them by the tax col.
lector, and crediting them with the
amounts paid out in the purchase oil
l toe bonds OF the city. He shall alec
2 charge them with theinterest accruipg
on such bonds as they ma; purchase
flom time to time.
g. AS soon as the commissioners shall
receive from the tax collector sutfi-
| cient sum, aid from time to time there.
, after, as they may receive other sums
either from the collector or in pay
ment of Interest on bonds purchased
they shall invest the same in the pur-
chase OF bond or bonds of the city
t not yet matured, t the lowest price al
which the same may be had, for the
account of the siuklng fund.
T. TIE com 1iissioners shall make
moLthly or quarterly settlements with
the treasurer. At such settlements
1 the commissioners shall produce all
3 the tOnds they have purchased up tc
that time, with the coupons belonging
thereto, and the treasurer shall cause
them to be stamped (hoih coupons and
bonds) with the words, Belonging to
{ the sinking fund.-" and shsll cancel
a said bonds aud coupons go as to pre-
vent future negotiation, and shall
also record their numbers, amounts
dates and time of maturity. and ther