The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-09-27
M1sMANAeEMEST OF THE CITY FINANCES.

The Republican city convention,
which met in September. 1889, declared
that 1--WE favor a r%efunding of the
bonded Indebtedness of the city at the
earliest practicable time, and at the low
est possible rate of interest" This was
the first public declaration on tho sub
ject, and it was so timely and well ex-
pressed that it received universal ap-
proval. The Democratic convention.
which met shortly afterwards, followed
in the wake of the Republicans, and
adopted a resolution to the same effect.
The refunding proposition was founded
on good business principles. 1t is al
ways good fnanciering to fund
an interest-bearing debt, which
cannot be conveniently paid at
maturity. in longtime bonds at a lower
rate of interest. If the Republicans had
carried the city in 1850 this policy would
have been carried out. Mayor Sullivan
in his first message to the Council threw
cold water on it. After stating that the
bonded debt of the city amounted to
1926. 500, he said:
None of this bonded Indebtedness will
mature during the life of this Council. and
1t is not probable that you will DO able TO
refund any portion of IL before maturity,
fog the reason that the interest on all but
Sl55.COO OF the amount Is between 8 and 3
per cent; consequently, the chief duty In
regard 10 the bonded indebtedness of the
city will be to provide for the pay ment of
interest theron.
Thus at the beginning of his first ad-
ministration Mayor Sullivan committed
himself against the policy of refunding
the city debt ut a lower rate of interest.
and advised the Council not to give the
matter any thought. Yet only O little
while before that the city authorities of
Terre Haute. whose credit was no bet
ter than that of this city, had made in
quiries regarding the funding of u
bonded debt of S2O6, 600 which was then
drawing 5l2 and 6 per cent. interest,
part of the bonds having ten years yet
to run and part fifteen years, and
learned that the entire amount would
be taken by responsible parties at 4l2
per cent, payable in twenty years. 1t
must be remembered that at that time,
and for more than three years after
wards. money was plenty and the rates
of interest very low. There was a great
deal of idle capital seeking investment,
and, considering the high credit which
the city enjoyed, it is quite safe to say
there would have been no difficulty in
refunding it's bonds at a much lower
rate of interest han it was then paying.
Yet Mayor Sullivan advised the Coun-
Gil not to give the matter any thought.
This was before the adoption of the
present charter. Mr.. Woollen was then
in the Council, and he made no conceal
ment of the fact that he differed with
the Mayor in regard to refunding the
debt. He had already conceived the
refunding plan which he afterwards un-
folded, and which he made persistent
efforts to have adopted. If it had been
taken hold of when he first proposed it,
or at n time within three years there
after. it could have been carried
through without n doubt.
Following is q list of the outstanding
bonds OF the city at TINT time, bearing.
respectively, S and 7.3 per cent. interest.
withthe date of their maturity.