The record-union., 1892-10-12
He Tells Why the Act Should be
Adopted by the People at the
Coming Election.


l say saving, but the saving is per-
haps more apparent than real, for the fol-
lowing reasons: The presents bonds of
the State are held as follows:
State school 81, 526, 800
State University $1,000
private partles...-............. $4,000
1oCal 10 De ,oSS,0OO
Now bear in mind that the public
schools and the university are supported
entirely by direct tax on the property
IN the State, less the revenues derived
from the funds invested in bonds of this
State, and county bonds, which fund was
obtained by the sale of lands donated by
Congress TO this State for the support of
these schools.
1t will be seen that 1927. 500 of the
State debt is held by these schools, and
that the schools are drawing + per cent.
on their Investment. If the vote of the
peoplebe favorable for the Refunding Act
the schools will have to submit to a re-
ductlon of per cent. or take their money
and invest in other securities making a
better return. 1t makes not the slightest
dIf1erence to the taxpayer whether he is
taxed enough to pay per cent. on the
bonds held by the common school fund
or per cent. for that purpose and the
other per cent. to make up the def
cheney caused by the loss of 2 per cent
must be raised by taxation.
The University fund is somewhat diff
ferent. Should the Refunding Act be
carried the $4,000 held by the Uni
versity would have to be redeemed, as
the University is prohibited by Act of
Congress from investing their funds in
securities that bring less interest than
B per cent. net This would entail some
loss upon the University, as it will take
time to reinvest that amount of money.
\ ct do not apprehend much difficulty in
investing their funds in per cent. or their
per cent. bonds; for instance there are
plenty OF irrigation district bonds that
can be had bearing 6 per cent, and the
courts hold that they are perfectly good.
The only real saving the State is
making in the Refunding Act is the per
cent. reduction on the $25l 200 held by
private parties. But remember that all the
State bonds held as above stated Will be
due and payable on January I'd next, and
therefore there should be provision made
for their payment, and l see no way to
do that unless the people vote to refund
the debt.
1t would seem to be impossible under
the Act, if adopted, to get up the bonds
and have them sold In time to meet the
debt when due; but it would only be
Jew months at most for bondholders to
wait Should the Act not be voted it
will, it seems to me, complicate matters
their money, and there will be none to
pay them. l know the Legislature could
make an appropriation to pay the bonds
in private hands, and also to pay interest
on the remainder; but it seems to me un-
wise for the people to reject the Act, when
by so doing the bond business of the
State will be left in very unsatisfactory
condition, while by adopting it the in
debtedness of the State would be put on
a satisfactory and business basis.
1t could do no possible harm to the tax
payer, common school fund, or private
bondholders, and only a slight loss in
time would follow to the University. The
State bonds will have to be paid or refund
ed sometime, why not refund now? Especl-
atty aOhe1l all tie expense Of GdVertisi7eq
the Act (aCfich IS hedUy) UiIi hare been IN
Cured, whether the people vote yes or
no. If the Act be rejected, another Act
of similar nature would have to be
passed by the Legislature this winter
and submitted to the people two years
hence, or else the Legislature would have
TO provide by direct taxation for the pay
ment of the debt; and until said tax is
paid into the Treasury some way would
have to be provided To pay the interest on
bonds without coupons.
l notice in the pamphlet issued by the
Hon. Secretary of State in reference to
the Refunding Act that he asserts that
there is now( when?)in the State Treasury
$4,000 900 and that the bonds in private
hands should be paid out of the surplus
in the treasury The above statement
is misleading and only correct in part
In May of this year there was in the
treasury about the amount stated by
Mr.. Waite, but not since that time. 1t
should be known that 81 ,S43, GIG of the
-, 1868, 92o IN the treasury on May 3lst. was
In special funds, such as States Prison,
revolving-jute, school, San Francisco
harbor,. State, schoolbook and other
minor funds, leaving only 81 $50, 3l2 in
the general and interest and sinking
funds applicable to the payment of the
State debt by appropriation.
Since May 31st there has been paid into
the treasury to the account of the general
fund Sl23, sol 90, which would make the
amount available for the current ex-
penses of the State from May 3lst to
about December 10th, when the taxes
come in, 81, GA, 163 9S-five and a half
months. Now if any one can show me
a surplus in the general fund on Deem
Der lst next, | will be thankful for such
information. The fact is there will be
no surplus on December 1st, except in
the special funds, and there may be but
little in these, as these funds are liable TO
be called for at any time by the institu-
tions in whose name sthey are deposited.
In January next we will have large
amount of money in the treasury, but it
is presumed no more than will be re-
Quired for the current expenses of the
State for the year following. Mr.. Waite's
proposition 10 pay the S25l 900 debt in
private hands is a good one, provided the
funds were in the treasury TO pay with,
but such will not be the case for one year
after they become due, for the simple
reason that there was no provision made
in the levy for that purpose, and if taken