Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1882-03-27
AN OPEN LETTER TO MAYOR BROWN

Hon. John Q. Brown, Mayor of Sacrs-
mento-Dear Sir: AS you are aware, the
city owes certain creditors a sum equal to 10
per cent. Of the taxable valae of the property
within the corporate limits The people Of
Sacramento desire to beat this debt, and
many plans have been proposed The bends
are owned in Germany. so you see if we pay
we enrich the German bondholdeTs, and the
great question is now, how we may beat the
creditors out of their rights. OF course we
will not repudiate the principal; to do so
would be dishonest. But we can refuse TO
pay the interest, and this will sooner or later
destroy the value of the principal. You gee
that while we could not honestly repu-
date the principal, We can honestly
destroy its value. There are many
ways Of doing this. Leave the levees TO be
perforated with gopheys and in few years
these wicked bonGhoiders will be glad to take
twenty cents On the dollar Discourage en-
terprlse and repel capital is a coed way.
Please remember that all prosperity, all
growth, all increase of values in the city tend
to enhance the value of the debt. These
things must be discouraged. The railroad
company put over 81, 600, COO worth of taxa
able property In the city, and thus foolishly
enhanced the value of the city debt. The
city. has kept up and strengthened the
levee deferses, thus protecting the property
held as security for this debt All this was
done, no doubt, at the wicked instigation of
the bondholders. Now, since these things
have been done, there remains to us the plan
OF refusing to pay the interest. You have
taken an oath to obey and enforce the law,
and you ind that the law authorizing the
| funding OF this debt requires You to levy for
general ~ &c r.
sessable property. Your oath should not
stand In the way Of disobeying this law.
ofhcIal perjury is honorable many citizens
and enc public journal say it is; land
they are all honorable men," Let the inter-
est accumulate. The way to GET out of debt
is to let obligations increase. The interest
bill Is S92, 600 per annum. If you will refuse
TO pay It Tor ten years you will have
added $500 600 to the city debt. But see the
deep cunning of my plan. You will have de-
preclated the bonds at least 20 per cent. or
on 81 10Y, GOO OF bonds (she present amount of
the debit. You will have saved to the city
SZl2, 000. You must, however, remember
one thing, and don't you forget IT," to wit
failing to pay the interest will depreciate the
value OF the bonds only if the prosperity of
the city Is arrested. It's no use to refuse
to pay the interest and then 90 on
growing IN the same old wicked way.
~ Nsiuc VI lhS JULIUS Will forever
depend on the proportion OF the debt to the
value of the taxable property As it is now.
we have S11 000,000 Of property and only
81, 06O, COG bonded debt. If at the end of
ten years you owe 1920, coo more for interest,
and The city has so grown and prospered as
to have so, O00,G00 worth of property you
will have gained nothing. Your relative
ability to pay will be the same and no depre.
clation will ensue. Il cannot be too strongly
impressed upon your mind and the minds of
all honest en- that the best way to beat q
actually bankrupt. You have been told that
the debt is menace to prosperity that is
true. My plan meets the case exactly
clothes the beautiful fact perfectly; for you
see propose to cure it by increasing it. The
debt at its present volume is an obstacle to
the growth Ct the city. But see the beauty
OF financial science. Let the interest
go unpaid and you Increase the debt
at the rate Of S92. 900 per annum,
and as it grows larger it becomes less an OBJ
struciion. As it is now, capitalist coming
into the city with 500, GOO places it under
and subject to the city debt-in other words,
he mortgages it to the bondholders for 10
per cent. OF its value. He hesitates he
don't come. Now let the interest go unpaid
until the debt amounts TO a mortgage of 20
per cent, and the capitals: rushes eagerly
to the front. You cannot fail to see the ad
vantsges of my plan" But there is point
beyond this: If you refuse to pay interest
the bonds go down to say 40 or even 80 per
cent, OF par value. Then lot Of spectators
can buy them and hold them against the
city. The advantage of this is obvious. AS
il is now. the bonds are held in Germany.
Nobody here ever sees bondholder. If they
could be bought for 80 cents on the dollar
they wonid soon be in the hands of home
brokers who would scheme to force them
to par. The home fellows would come
around AID use money in politics. But the
chief point [ want to make is to please the
absentee landlords who own property for rent.
They want low taxes and high rent.
They don't want to be taxed to pay interest,
or debt, or improvements, or street repairs,
or sprinkling. You see agents for such prop
erty always opposed to high taxes. The alb
sentee non resident property-owner has been
blessing to all countries where his influence
has bee felt. He is good fellow, and moth
ing should be allowed to interfere with his
profit. All that Glaze, and all agents of that
class, are with me against paying the in
terest
Permit me further to caution you against
giving heed to the people who tell you that
the creditors have any remedy at law. This
is sll sham. They took the bonds surprising
the law CT 1858 was in the nature Of an agree.
menF, and would be the law of the case. One
of the first provisions Of that law is that a
tax OF one per cent. on the assessed value of
the property should be levied. We refused
for thirteen consecutive years to do this, and
see where we are to-day. Why, we owe
5000 600 on account of delinquent interest,
and L have already shown you that the more
We owe the leas we will be repaired to pay.
L wanted to say something about the differ
euce between the two great classes of Ameri-
can society known as water takers" and
taxpayers" I assure you there is a diff.
ference. A water taker" is never tax
payer, end Taxpayer" is never a water
taker. l desired to explain how the one class
is likely to become oppressive and encreach
upon the tights of the other, but as you may
have given these questi, ms sufficient thought
already, forbear. CONSCIENCE.