Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1890-11-11
Pittsburg's Debt Being Gradually
Extinguished, and it is Ex-
pected That it Will be
WIPED OUTIN A FEW MORE YEARS.
The Gas City's Indebtedness Reduced
Five Million Dollars in Less
Than Ten Years,
HER BONDS BEING RAPIDLY TAKEN UP.


City Controller Morrow is purchasing a
good many bonds these days. Including
Yesterdays purchases, the Controller has
bought in so. 400 worth of city bonds
already this month, although but third of
the month has yet expired.
Pltrsburg has reputation among its cit
izens Of carrying a very heavy load in the
shape of bonded indebte dness. If they are
asked what the debt of the city is, they will
at once reply, "Oh, nearly $4,000. 900, :"
whereas, in reality, it is but two-thirds Of
that amount This is a result of a COM
bination of bookkeeping and legislation.
The sinking fund was created for the pur-
pose of gradually extingulshing the city
debt by the purchase of outstanding bonds,
or by the investment of the money in United
States, State or city securities. Pittsburg
prefers to buy her own bonds, as the most
rapid and complete way of extinguishing
the debt. Under the law, however, there
is no way of shortening the life of a bond,
not even when the issuer buys it back again.
1t must run its full term and be charged
against the issuer, no matter who owns it.
PATT1soN's FIRST VETO.
Governor Pattison's first veto was directed
at measure, introduced in behalf of Pitts
burg. making it legal for a municipality,
when it bought back the securities 1t had
previously issued, to cancel the bonds. The
Governor decided that such an act would
conflict with the Constitution, and for that
reason knocked it out with his little but
forcible veto.
How this works is illustrated by the Con-
troller's last annual report In it the
bonded debt is placed at S13, ,2O3. .401 81.
Nevertheless s1,s76, ,5s3 6S of bonds have
been bought back by the city, and had it
not been for Governor Pattison's veto would
have been Cancelled, and could no longer
have been charged-on paper-against the
city. In addition, the sinking funds held at
that time 81 800, ,013 81 in securities and cash,
to be applied to the extinguishment of the
city's debt. This left an actual indebted
ness of $40, ,O9s, SO4 SS. Since January 81,
the end of the fiscal year of 1889, the debt
has been further reduced by the purchase of
bonds and. the accumulation of interest,
until now the actual debt of the city is, in
round numbers, but s9, ,652, 600, which sounds
very different from S14, ,0O0,0 900.
LOOKS WORSE THAN IT IS.
Under the present arrangement the city
buys in its bonds with its own money, but
continues to pay the interest, which is
turned into the sinking fund. Of course, it
sounds peculiar to say that the city is forced to
pay interest on its money, but tits just as broad
as it is long. Pittsburg merely transfers the
money from one pocket to another, and the
only injury to the taxpayer is that the system
of bookkeeping forced upon the city by the
Legislature has tendency to depreciate the
value of property in the municipality by con-
veying the impression abroad that Pittsburg is
hopelessly in debt
Controller Morrow is purchasing bonds right
along-at his price which means that he ex-
poets the sinking fund to net a revenue of 81
per cent per annum upon the investments. 1t is a
peculiar fact that the Controllers willingness
to purchase at a reasonable figure is not gen.
orally known not even by financial institutions.
A few DAYS ago Plttsburg bank desired to
dispose of some city bonds. but instead of going
TO the CITY Controller direct placed the securi-
ties in the hands of . broker for disposal. 1t
did not take the latter long to get rid of them.
The outstanding city bonds, at the time of
the Controllers last report, together with the
date of maturity and the amount outstanding,
which includes those held by the sinking fund,
are as follows: