The record-union., 1891-10-28
Judge Beatty to puzzled Citizen.o

/ OF gOOu 1alth.-EDS.l
Judge Beatty to puzzled CitiZen.''
| EDS. RECORD UNION: Permit me to
say few words to Puzzled Citizen.'
To Puzzled Citizen:" The converse
ton you relate as taking place between
| yourself and your new charter friend con-
vinces me you both misunderstood some
of the important parts in relation to this
public debt. Your friend seems to think
/ that in buying long-term bonds Q903
! bonds) at par we pay not only for the
| bond but for the interest also.
| In the 1903 bonds the city promises to
! pay say s., 200 on the 1st day of February,
1903. But attached to that bond are thir-
teen coupons" or in plainEnglish, thir-
! teen promissory notes. Twelve of these
notes are for $50 each and one for So.
| Now, when we buy 1903 81 900 bond at
! par we pay 81 900 for the bond and get
! S125 in notes thrown III without pay. II
! this bond was supposed to stand untiLdue
! the city would have to pay for the whole
! lot, 81, ,725. So we save the city S125 on
! each 81 600 bond by paving in advance.
! There are other bonds that are already
! past due. These we buy (as fast as we can
/ get them) at 20 cents on the dollar.
/ But | am free to admit with the saving
! in interest and discount, which we make
! by buying up the debt before it Is due,
would not induce me to favor high rate
of taxation, provided / had choice about
! the tax Tatel bat for one fact, which both
| you and taxpayer seem to overlook. The
! city has been delinquent in her tax every
| year for forty years; its credit is de-
! stroyed. Everywhere in the civilized
world (at least among all large banks,
| from Siberia to Chile, we are discredited.
! All strangers believe the city inSOlYent.
/ 10 N,
our city lots are not worth more than one
third as much as in any other city in the
! United States Of the same population and
commercial activity. II we raise the
! money promptly to pay these delinquent
/ bonds and coupons we re-eStabllSh the
| credit Of the city, advance the price OF
| real estate and bring in more population
to help pay that which is not yet due.
The amount now delinquent, added to
| what would fail due on or before tebru-
airy l, 1898, is $S5l ,2S0. II the Fund Com
mission had the money now to buy il,
we could purchase this fer something less
than 500, 900. This would not only be
paying SS5l $50 Of debt, but it would be
adding probably S5.000O00 10 the value OF
real estate and 5000 to the population
of the city more than it viii be it we re-
main in a state of insolvency for the next
three years.
There is another consideration that
ought to satisfy your new charter friend.
The Fund Commissioners do not levy
one cent of the tax which is paid into the
interest and sinking fund. More than
thirty years ago the city made contract
with their creditors that if they would re-
fund their old bonds then generally
bearing 10 per cent. interest at per cent.
the city would levy property tax of |
per cent and set apart % per cent. of that
l per cent. property tax, and also 50 per
cent. OF water rates, lines, ETC., to pay
these new bonds. The Supreme Court
has decided that contract is binding, the
laws carrying Out that contract cannot
be repealed or even nullihed by new
constitution. The 81 per cent. must be
raised unil the last dollar Of the funded
debt is paid.
Abolish the commission and you DO
not diminish the tax one dime. The
next years income OF the sinking and in
terest fund commission or no commits
SION will be about SI50000. With this
Mr.. Gerber viii pay $4,000 to Davis,
Rothschi!d, Belmont estate, and others,
and take up just $4,000 Of the city debt.
The Fund Commission will pay out the
other $4,000 TO the same parties and
take up Sl50,000 of the debt. If Gerber
pays ont the whole of the money he viii
pay Sl5o,00O Of the bebt. If we help him
pay it out, we viii pay with the same
/ money Sl90,G00 of the debt Is it not
worth while to bear with the Fund Com
! missioners little longer if we save the
city net $4,000 year? II. 0. BEATTY.