The record-union., 1892-03-17
SHOULD NOT Be ABOLISHED.
Why the Funded Debt Commission
Should Continue Its Work.
Freeholder Thomas b. Hall shows
How Saving of S1OI,256 VIII
Be Effected BY 1t.

Now that there can be no further doubt
that the Funded Debt Commission will
continue in existence legally by the
adoption, with the proposed new charter,
of alternative proposition No. Pas
was demonstrated by Robert t. Devlin
in an interview published in yesterdays
RECORD UNIoN-the question has ma
turally arisen, Suppose we do retain the
commission, will it prove useful?''
A USEFUL COMMISSION.
Recognizing the fact that there is one
man in Sacramento who by persistent
study has mastered the complications
and intricacies of the funded Indebtedness
subject, the RECoKD-U UNION detailed re-
porter yesterday to interview that man
who is none other than Captain T. B.
Hall, a member of the late Board of Free
holders-on that subject. The reporter
propounded the question noted above to
the Captain, and he replied promptly that
the continuance of the commission would
prove very beneficial to the city.
Being asked for his reasons Mr.. Hall
SAID: Il do not know of anything better
to say-without going deeply into figures,
which will be hardly necessary-than TO
refer to a report made TO the Board of
Freeholders by its Committee on the
Funded indebtedness, in which it was
assumed as basis of calculation that GER
tain sums Of money would go into the
city's sinking and interest fund during
the next few yearsi as follows: In 1892
the amount will be Sl62, 800; 1898, Sl65, $50;
1884, Sl6S,00o; 1885, $40, ,750; 1896, Sl73,500.
SURRENDER OF COUPONS.
"Now," continued Mr.. Hall, ''if the
Funded Debt Commission continues to
operate it will receive of these several
sums placed annually in the sinking and
interest fund the following amounts, by
surrender to the City Treasurer of past
due interest coupons held by it: In 1892,
Sll4, $40; 1893, Sl35, $50; 1894, Sl30.392, 1895,
Sl33, 500: 1896, Sl37, ,904. And with these
sums of money the Funded Debt Com
mission, through its operations, would so
reduce the debt by the close of 1896 that
the city, with the revenue estimated as
going into the sinking and interest fund
during 1S97-that is SIG, ,250-would be
able TO buy up the entire remaining out
standing bonds, including those of 1898
and 1908, and leave a balance in cash in
the fund of, say, -, 500. In the same re-
port it was shown that if the Funded
Debt Commission were abolished or quit
operations at the close of 1892, and there
upon surrendered TO the city all the
pohuS auu CoupoHS nelu ny IL, anu tDdG
thereafter all the money going into the
sinking and interest fund was paid to the
outside bondholders direct, the city would
still owe at the end of 1897 500, ,227, thereby
making showing in favor of the Funded
Debt Commission of SOL ,256.
QUITE A SAVING.
"Of course" resumed Mr.. Hall, sin
making calculations on what the COM
mission can save the city by continuing
Its work, must necessarily be in degree
Hypothetical. But there are very good
reasons for assuming that a saving of the
amount [ have mentioned, S10l ,256 can
be made by its continuance. That is
rather snug little sum, and it will go
quite way toward paying for new and
necessary improvements within the city.
and it is to be hoped that the new char
ter and alternative proposition No L will
be adopted by the people, thereby con-
tinuing in existence the Funded Debt
Commission that has in the past accom-
plished so much, and which can in the
future render valuable service in hand
ling the city debt
SHOULD NOT BE ABOLISHED.
Suppose that the people vote the other
way and adopt alternative proposition
No. q which aboliShes the commission
what would be the result? ?" asked the re-
porter.
''If the new charter is adopted, together
with proposition No. o." replied Mr..
Hall, 'the result would be most serious
to the city's welfare. I'll give you my
reason. The charter cannot go into effect
until 1894 and that leaves two years in
which the commission will continue to
operate, no matter which alternative
proposition is adopted. Now, if the Sec
ond proposition is adopted, the bond
holders, knowing that the commission
fT lot fla1 Lot 81 t.
1894, and that thereafter all money going
into the sinking and interest fund must
necessarily be paid directly to them, the
usefulness of the commission during
these two years would be practically de-
stroyed, as ii could not then hope to make
favorable terms with the bondholders.
who would hold out for the face value,
Do you see the point? The loss to the
city thus occasioned by reason of the
commission not being able to operate
with profit would be considerable, and
all of two years profits would be lost.
We would be set back that much, in ad-
dition TO the profits that would naturally
continue if the commission remained in
existence after 1894; and it is not improb-
able that good work could be done by the
commission after 1894, if it continued in
existence"
THE RELATION TO TAXATION.
"Are there any other ideas that you can
give me as to why the Funded Debt Conn
mission should not be abolished ?'' was
next asked.
Yes, there is one more important point
that might refer TO" said the Captain.
" on see, there are quite number Of peo-
pie in Sacramento who have not given the
bonded Indebtedness subject any thought.
and who do not know that if the Funded
Debt Commission was abolished the en-
tire amount of money going into the
sinking and interest fund would go di-
rectly to the bondholders. But with the
commission in existence, as is proposed
by alternative proposition No. L. the
bondholder only receives upon his
holdings one-fourth of the amount placed
in the sinking and interest fund each
year. presume there are many who are
laboring under the belief that if the
Funded Debt Commission is DESTROYED.
and the bonds and coupons in its hands
are Cancelled, that the rate of taxes will
be Immediately reduced. This belief is
erroneous, and has resulted in the Funded
Debt Commission not being held in as
high esteem by the citizens generally as
it should be. The rate of taxation must
remain the same, whether the commits
sion continues to exist or not, and until
such time as the city's debt is either paid
up in full or refunded"