Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1881-02-09
cARD Feou mAYoR TURNER.
Full Statement Concerning the Finan-
oiaJ ronditirY, of tha cj+v

debt. In many respects it is simple ques-
ton, in others rather complex in its nature.
| find, by conyersing with various parties,
that there is prevalent belief that it can be
gotten rid of in some way without paying it
II full, either BIZ absolute Reputation or by
compromise. The fact Is, it has been in a
channel of compromise for several years past.
Some $3.50, 600 is already paid and obiterated
by the operation of what is known as the
Z" Funded Debt Commission" but there is
still lef5 81 100. 900 in bonds, and accrued in
terest amounting 60 some $500, GEO.. There
is q very vague and indefinite notion in the
public mind as TO how this debt was originally
created. All have heard of the disasters
agaiast which this community has had to
struggle in the esr]y history of this city. 1t
became apparent very early IN It's history
that without some system of levee defenses
it would be at the mercy of the annual food.
Consequently. prior to 1851, some 5000 eco had
already been expended upon levees. which had
to be met by the issuance OF bonds bearing ten
per cent. per annunl interest. Water works
had to be constructed to supply water to the
citizens, at an expense Of something over
$500 600, for which bonds were also issued.
la addition to this, from one cause or o,her,
tie taxes raised were utterly inadequate TO
meet the expenses of the city.
This condition OF things existed until the
year 1858. The expenses on ievees, streets,
ETC., were met by an issuance OF scrip, Dear
ing rate OF interest varying from three 10
teu per cent. per month, until the city became
apparently hopelessiy bankrupt. In the year
1858 bill was passed by the State Legisla-
ture Incorporating the city aud county OF
Sacramento as one government. In that bill
it was provided that the city should not only
I'D h,pHaI Hahf h1E also fund
floating indebtedness. 1t provided for the
election of Commissioners to examine the
claims against the city, with power to Tund al
that were found legitimate, and reject all tina:
were fraudulent; the rate Of interest belng
fixed at six per cent. per annum. This Com
mission funded Of the old debt and floating
Indebtedness, as nearly as can De ascertGined,
| 81 600, Geo. 1t is claimed by citizens still
living in Sacramento that at least S400, COG
was reported against by an expert employed
for the purpose as being absolutely iraudu'
| lent. The President of the Board OF Com
missioners waited for some time Tor some
citizen, or citizens, to eujoin him from issuing
! bonds in those cases, but as no one appeared.
| they went over with the balance l CLAIM
that this matter of fraud has no possible
bearing upon cur present relation to this
| debt. The fact is, these bonds were issued
| under the signature and seal of the properly
| constituted authorities OF this municipality
| Of that day. The faith and credit of the city
we're pledged to the interest and ultimate re-
demption of these bonds. At the same time
| am fully convinced that the conditions
uader which the parties into whose hands
the bonds and scrip had naturally drifteo
were fully aware of the precarious conditions
under which they accepted them.
| The flood of 1862 swept away in one fel
| tbo, Of tho SGOO mn ri
had been put on the levees, besides effectinl
fearful depreciation Of all private property
in the city The bonds at that time depreci
ated to a point varying from is to p PEE
| cent. of their face value, and are mainly HEX
to-day by parties who secured them at tina
| price.
| ernments separated. A new charter wa
adopted for the government of the city
which in many respects ignored the provi
sions of the statute OF 1858, under which tn
old debt was funded, and very natur
ally the Trustees elecsed to carr,
out the provisions of the charter 0
| 1868 followed its instructions rather thai
thoss of the incorporation Act OF 1888, whiei
in relation to the funded debt provided tina
the revenue derived from all within the cit.
limits for municipal purposes, namely, taxes
| licenses. harbor dues, water rents and tlne
collected in the Mayors Court, or otherwise
when paid into the treasury, should be Sc
apart and appropriated as follows Fifty
| 1--WE per cent. to the interest and sinking
fund, which shall be applied to the paymen
of the annual interest and the fna
redemption of the bonds Issued 70
city indebtedness, in accordance with tn
provisions of this Act; 10 per cent. to th
salary fund, which shall be applied to In
g lac. col IF nal
GERS. as provided in this Act; s per cent. I
ths school fund, which shall be applied TO In
support OF schools within the city limits. an,
the balance, % per cent, to fund TO b
used for such necessary municipal expense
as are not otherwise provided for in this sec
ton. and shall be called & contingent fund.
(Cbis is Section 80 Of said Act Section 8
provides that the Board of Supervisors shal
not have power to levy any tax greater thal
100 cents on the 800 for municipal purposes
In the meantime improvements of one kini
and another were urgently demanded, sucl
as the establishment of n regular police fore
and q more efficient system of common
schools, street improvements and system &
sewerage, all of which combined to render
apparently impossible for the Trustee
to levy this 50 per cent. 0
l per cent. in accordance wit
the terms of the Act of 1858; in fact
so far as [ can learn, that contract with tn
bondholders appears to have been for tim
almost lost sight of. And under this condi
ton Of things, it was quite natural the inter
est on the bonds should, as 1t did, fall behint
eight years. Aud as the city was gradual.
recovering from its early disasters before tn
indonitable pluck and energy of those VIII
had determined to make homes for Jhemselve
and a heritage for their children. or perish il
the attempt, the holders OF the bonds begal
to press their claims seeing. with the shar
eve characteristic Of the tribe, that what a
one time must have seemed to them slmes
worthless was fast approaching, and in q fey
wears, at most, would be at par, so lar as th
bonds were concerned, let the fate of the IL
terest be what it might. There were thos
here who saw shis toO and as checkmat
move founded, by Act of the Legislature, tn
Funded Debt Comm sion, which, as abov
stated, has, since 1872, bought in round nun
bers $3.50, GOO, and if it is allowed to so o
may yet be means very useful to the tina
determination of the debt. And now
, few words as to the present phase c
the question. At the clio e of the last yea
we were threatened with a number Of ha1
RAISING suits to be brought to prevent tn
statute Of limitations making void the IN
paid interest prior to 1877. 1t being c0ncede
on all hands that that could be done shout
the city be pushed to extremes. Judg
Beatty called 2 number of citizens togethe
to consider the situation. lie having been i
constant communication with the city's cred
itors. his opinien OF their temper had grea
weight. The funding of the back interest va
| discussed and met with no favor and her
let me say the Trustees have no tangibl
proposition from them. e., the boudhoid
ers-eyen to fund the back interest, to sa
nothing of the bonds. The proposition t
fund the interest appears to me quite lnGt
fensible under the present circumstances.
correspondent of the Bee to-day asks fv
questions. which [ think were mainly al
swered in my card this morning, but viii
as briefly as l can, answer them
First-Not that l am aware Of.
Second-Neither 2 majority, Eor a mlGol
ity. nor a single creditor, has expressed hi
willingness to refund at 90 per cent. on th
dollar.
Third should say it would.
Fourth-No. It is proposed to pay on
years interest, commencing with 1877, allow
ing all interest prior to that and all ahead c
it 70 be bought up on the best possible terms
I viii answer the fifth Question by askin
''X If he held a note against me for Sl0
bearing per cent. interest per annunl, an
he came to- me six months before the not
was due and offered to surrender the note o
condition that l gave him note for 50
bearing per cent. interest, If | would not b
a fool if l did not accept it.
The fact Is, no bondholder and no agent {
any boudholder has ever made any sue
proposition to the Trustees. The City Tru;
tees. at the request of a large number of cit
GERS, and some Of the largest taxpayer:
adopted a resolution, published in last night
Bee, that being considered the only way 9
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