Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1885-02-24
OUR BONDED INBEBTEDNESS.
A Letter from Judge I'll. o. Beatty Which
Shonld he Carefully Considered,

Should be Carefully Considered.
| EDS. RECORD UNION: The litigation in
regard to city bonds and the revenue that
must be applied to their liquidation Is now
drawing towards conclusion, and 1t would
be well to look at the situation and see
what is best to be done. There are out
standing in the hands of the bondhoiders
Bonds of 1858 and q 700 700
Past due $1,000
Coupons on bonds not yet due. ooo,oto
......... s., 3i3, 600
In hands of Sinking Fund Commission
ers:
Bonds. SIS eco
Past due coupons. oSso
Coupons not yet due-....... lti
Total ......................... s., 259, 30
If the Funded Debt Commission is legis-
lated out of office. then this will be about
our condition: With 55 per cent. of
the property tax, 55 per cent. of
the gross income of the Water Works,
and the SO per cent. of fines, licenses, ETC.,
now paid into the sinking and interest
funds, we will be able to pay about $780,
900 per annum on this debt, thus taking
about twenty three years to pay 1t, provided
we have no compound interest to pay. If
the Court holds that only 30 per cent. OF
the net proceeds of the water-works 90 into
the sinking fund, it will take about twenty
eight years to pay oil the debt. But II the
Fund Commissioners are allowed to go on
and use the interest fund, now at their dis
posal, they will be able within ten years
to buy up al the delinquent coupons, and
about $500 600 of bonds. This will leave the
debt in 1895 only about $750,000 in bonds,
with no overdue coupons. Without the
assistance of the Commission, the Outstand-
ing bonds and overdue coupons in 1895 will
be about $4,000, making clear saving to
the city i'll ten years of about S450,000 by
the Commission The cost of running this
Commission for the ten years would not be
enc cent out of the pockets of the taxpay
ers. The whole would come out of the ac-
cumulated interest fund, which would be
entirely lost by aboiishing the Commission.
1t seems to me Sacramento is hardly rich
enough TO ttrO1o array $780, 900 without any
compensation in return.
But from the start there has been per-
sistent opposition to the Sinking Fund
Commissioners apparently for no other
reason than that they were paying off the
city debt too fast Had the bill creating
the Commission been passed in the Senate
as it came from the lower house, to-day
Sacramento would have been out of debt.
The rate of taxation for the last thirteen
years need not have been higher than it has
been. What was paid to the Fund Com
missioners might have been made up by
economy in other directions, and the in
creased value OF cur property which would
have resulted from a rapid liquidation of
no
with the tritling amount of $2l4,000 have
redeemed over one-third the debt. Before
the end of this year they will have about
two-titthS of the whole debt unless they
are Kindred and INSTRUCTED by the action OF
the Trustees of the city.
In 1872, at several public meetings of the
citizens, | proposed, if a certain law was
passed giving to the Fund Commission
about $650,000 in eleven annual install
ments, we would reduce the city indebted
ness to 100000 or $500, 900 with the money.
A law was passed, under which we got
hardly one-third the amount stipulated
for. We have got in more than a third of
the whole debt. In ten years more. with
out further taxes, we will, if let alone, have
from three-fourths to four-ffths of the debt
in our hands, for the city, without further
taxation for this fund.
| think | more than fulfilled my prom
Use for the Fund Commissioners under the
Act of 1872. | now make this further
promise: That if the citizens at the com
ing election will elect an intelligent Third
Trustee, who will use his best exertions 20
settle all remaining litigation with bond
holders without further delay. pay over
to the Fund Commissioners the money in
the city treasury belonging to them-for
the city-they will reduce the amount of
the funded Indebtedness now outstanding
at least one-haif within ten years and not
collect q single cent Of tarcs, but make the
whole reduction out of their interest fund
Or, if the people would prefer to pay
small tax, say ten to fifteen cents on the
800 annually, into the Commissioners
fund, we will reduce the outstanding debt
one-halfin six to eight years. OF course
all those figures and proposals are given on
the theory that the city does not have to
paw interest on the overdue coupons, nor
on the bonds after all coupons are removed.
If We must pay interest on these amounts,
it will take much longer TO pay the debt,
but the Sinking Fund Commissioners will
be mitch more needed than if We did not
have to pay compound interest.
II. 0. BEATTY.