Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-01-01
THE BOND QUESTION.
Another Card from One of the Bond
Commissioners.

| Another Card from One of the Bond
! Commissioners.
EDS RECORD UsIoN: Since the pub
location in the RECORD UNION on the 2lsi
instant of a communication from myself
and Mr.. Smith in relation to the city debt,
several questions have been put to me in
relation to that article, which I ask to be
allowed to answer through your paper.
First.-"Why was not that communities
ton signed official y by the whole Board2''
| Answer-There are three Commission
ers. One of them is in Europe. A news
paper article is not an official act. To have
sigoed it as such would have been ride
| ulous.
5econd.-"Why is it that we state in the
first paragraph of our communication that
| there are 1884, Goo of bonds outstanding and
| in a subsequent part the communication
shows that the whole of the interest bearing
debt amounts only to $612 100. In other
words, how is it that the whole 1914 600
does not bear interest? p
Answer.-The bonds fall due at different
| periods; 1921 900 fell due February l, 1888.
The others fall due in lots, February l,
1898, 1898 and 1903 Since the bonds of
1888 fell due, as We understand the law and
decisions of the court they bear no interest,
or what is the same thing, there is no law
under which the city can be compelled to
| paw interest As the other bonds fall due
| from time TO time they will cease to bear
interest After 1898 the city will virtually
have no interest 20 pay.
Third.-"Does not the Constitution pro-
vide that when city borrows money it
must levy a tax sufficient not only TO meet
the annual interest, but also to provide q
sinking fund TO extiDguish the principal in
twenty yesrsY"
Undoubtedly it does, bat when the City
Trustees in 1886 proposed to refund the city
debt, il was distinctly stated that they did
not intend to provide for sinking fund on
the start but only raise the necessary
amount annually to pay the years interest.
One of the Trustees informed me that they
were advised by their attorney that if they
refunded and were always careful to raise
enough to pay the annual interest the
bondholders would be satisfied, ana no.
body would complain of the failure to raise
money for the sinking fund. | supposed
the present scheme was a renewal of the
old project. The only object l understand
OF refundiDg, is to diminish the present
heavy annual payments on the debt, and
shift the greater part of the burthen on our
posterity. To refund and pay only interest
would undoubtedly have that effect; but to
refund, pay the annual interest and five per
cent into sinking fund would diminish
our present payments very slightly, but still
enable US to bequeath to our posterity
very handsome Irish legacy. After paying
as much into the interest and sinking funds
as the Fund Commissioners would require
to pay the whole debt, principal and inter-
est, we would still have a snug little sum
of about $3.50, 900 debt to hand over to our
posterity.
Fourth.-"How much more money would
the city have to pay if it adopts the new
charter and thereby destroys the Fund
Commission p
We showed in our communication of the
Dist inst. that if the city refunded its debt it
would have to issue bonds to the amount of
81 ,239 600 to take up the outstanding bonds
and past due coupons. But if the city pays
the debt without refunding it will have to
pay $204 $40, which will hereafter become
due on the bonds in the hands OF the cred
ltors, making in all 81 ,443, $40 But the
new charter can not be put in operation for
more than one year to come. During that
year the Fund commissioners can take up
one hundred and forty or fifty thousand
dollars of this amount, leaving for the new
corporation a debt of about 81 100000, or
about $400, 900 more than the Fund Com
missioners would require to pay the entire
debt H. O. BEATTY