Evening star. [volume] (Washington, D.C.) 1854-1972, 1881-01-13
The District Sinking Fund.

anAVol lcpOlG W OcCIcL6Ty SueIWau. Inc ap-
preparation for the interest and sinking fund
upon the District debt for the fiscal year
was 81, ,155, $3.50. After deducting the amount
required for the payment of the annual interest
upon up tho 8 outstanding debt, there remained, in
vious year, to be expended for the sinking
funds for the three-stxty-five loan and for the
old funded debt, s2O6, 250.95. This amount was
invested as early In the fiscal year as practic-
able, which resulted In the reduction of the
principal OF the bonded debt 5000 423 33. and the
annua! interest S.. .S27.66. The bonds purchased
were: District of Columbia three sixty five per
cent bonds, corporation of Washington i've per
cent general stock, District or Columbia
Blk per Gems permanent improvement bonds,
corporation oa Of Washington twenty-year six
lnmnla tWenty-year five per cent funding bonds
The credit Of the district has so appreciated
that the six per cent ponds, which in 1873 could
De had at no less than 10k per cent pre-
MUM In August last, and are even hig her than
ahat u, at at this time If they can De obtained at
bought In 1879 at s2sl is now held at a pre-
MUM OF from two to four per cent. The loans
now outstanding and the amount OF them are:
GenSat GeorgetoWn general per cent. $40 900; per-
permanent improvement, per cent, 5000
tWenty-year funding, per cent, 81 Jas. $50:
market, per cent, $50 600; twenty year fund
Ing, 5 per cent, 81 ,0S9, 300; water, per cent.
S3s1 ,oO0; th1rty-year funding. per cent, s66o-
0OO; water, 7 per cent, s26 O0O; tifty-year fund
ing $50 per cent, $l4. .0S6, ,5G0 total, $22 14 400
July lst next, no bonds will mature until 1s9f
and until that time it is hardly probable that
the sinking fund can be Invested TO yield even
81 per cent.
REDUCTION OF DEBT AND ESTIMATES
Since the sinking fund was transferred to the
once OF United States Treasurer the bonded
debt has been reduced s6lS, ,75O, and the annual
interest $3S 9S1.77.
Under the present law the annual approprla-
!lon 1or the sfnkng-fund Of the three -sixty-five
loan must be invested In the bonds or that loan
which have not always proved the most favora-
given for the investment of that fund In any
bonds OF the District which may be most ai-
Vantageously purchased, the profit of the trans
acton IN the saving OF interest. to inure to the
me estimate tor 1882, for sinking fund and
interest, is $l.2l3 ,947.97, and exceeds that for
the past two and current years, SIS, ,36442, which
the increase in the principal of the three sixty
nve loan, amounting to 81 ,256. $50, authorized by
the act act Of June Is, 1880: When the act of June
the District viii be s22 321 $50, the annual In.
terest thereon $991, ,s3s. .72, and the amount re-
quired as sinking fund, 1929. .1OO25; which,
one hundredths per cent per annum. win
extiDguish the entire debt August /. 1924.
II the bonded debt has reached its maximum
under existing laws, and no further increase
appropriation OF $1,2l3, ,947.s7 should be maue
for the eXt1Dgu1shment OF the debt
INCREASE OF THE BONDED DEBT.
AS stated, the principal OF the bonded debt of
me Dlstrlet has been reduced since July l, 1873.
S61s. 100. BY the provisions OF the act of June
10; lsso, however. an increase In the bonded
1zed; 1856 GEO OF which, in bonds OF the three
s1xty-hve loan, under section OF the above act
have already been Issued In redemption of Ger
uncates OF the late Board OF Audit, with the
probability that the total amount authorized
VIII oe ISSUED e1. in redemption OF the certin-
Gates ment1ontd cr in payment of judgments
OF me court OF Claims to be rendered under the
Speclheo outstanding claims of the District.
TIE EIGHT PER CENT. CERTIFICATES.
Ihe treasurer refers to the DILL that has
passed the Senate, providing for the conversion
OF s594, $50 eight per cent. certificates Of In
debtedness and accrued interest thereon.
amounting Ia all to SS14, 900, into a three per
fen1 cen 1eaa TO TO run run for a years He objects TO
deposited In his Office tax lien certificate,
pase6 upon uncollected special assessments or
the District 10 an amount suffiolent, II collected
standing lght per cents which it Is contem-
plated to fund.
The collection of these special assessments
las been delayed by the District auUhOri1ie,
mainly. they allege, because they were erro-
hecus and needed revision. Ii Is now announced
that the revision Of these assessments has b,e1
t1,I GG,mtissted, ana there seems to be no reason
Why their collection should not proceed under
tte act ABOVE quoted; at least opportunity
should be given for collection before fundlng
!he elght per cents. and the accrued Interest
year 1924. ~A
Another objection to the scheme for funding
.htse certihcates is that the interest, estimated
not a sound principle OF business or finance to
provide lOr the interest upon an obligation bY
giving therefor another interest~beaTing obli-
cation.
1t is doubtful whether the District is bound
1or The naJ ment of interest upon the eight per
cents subsequent to their maturity. This office
mas Ieiusea M TO allow more than the legal rate
has decided that holders of past-due coupons
from these certificates are entitled to six per
cent thereon from the date OF the coupon, and
IL IL Is; Is nelng allowed. 1t might therefore. be
receivable for special assessments without in-
teTeSt II such action is warranted BY law. or
at very low rate. and payable from any pro
unt:er no circumstances should they be added
TO ne bonded debt OF the District.
I be bill would operate unfavorably to the in-
las borne its full share of the cost of assess
ments for street Improvements, and IL the
luhoing OF the eight per cent certificates is an
thcrized, the United States VIII become charre.
able with one-half Of the expenditure rednireI
10 redeem the principal OF the new bond aud of
the Interest thereon.
THE DIVERSION OF BOARD OF AUDIT CERrIFI-
Gates
III ne Ia" auihor1z1ng the conversion of board
OF audit certificates was almost Incapable OF
execution. However, the decision was finally
reached that when certificates bore different
dates, the average date should be Computed
and taken as the date at which interest upOn
I he bonds should begin, and that no Interest
should be allowed upon the certificates It WAS
also decided TO allow holders to combine any
amount remaining after conversion with other
certlncates, and to permit the assignment of
rmainders. "
1t is suggested that the decision to allow no
interest upon the certificates, Dut to allow In.
terest at the rate OF three-sixtY.flve one. nun.
0redthS per cent upon the bOnus from the date
OF the certificates, was not only in accordance
win the sectlCn In question, but seems to be
also full compliance with the demands of ius-
tee, as 1t places holders of certihcates-many
OF Whom refused bonds of the three-sixty.fiye
loan when offered them by the District OF M
lumba In 1874, 1875 and 1S76-upon the same
footing with those who surrendered their Ger
tif1cateS Tor bonds OF that loan in those years
In fact those who have taken ADVANTAGE of
the above section have the benefit OF an advance
In the market rate OF the three-sixty. .fiyeS-
amounting to at least forty per cent. when
with at least twenty one per cent of accumu
lated interest, payable with the bonds. WOuid
seem to be as favorable settlement "a This
class OF creditors can expect.
1t may be mentioned also that very few Of the
ceIt1ncateS recently converted were in the
hands OF the original owners but had Dassnd
1Lto the hands OF Others, who had come INTO
possession OF them at an average OF probably
noI much more than ffty per cent of their face
value.
SPECIAL ASSESSMENTS
since April 18th last, the proceeds of special