The record-union., 1895-05-04
EvERYBoDY's COLUMN.
Correspondence OF Interest to th
General Public.

EVERY 6OOY > COLUMN
Correspondence OF Interest to the
General Public.
Under this heading the RECoRD-UNIoN will
publish short letters from correspondents on
topics Of interest TO the general pubic. The
matter in these communications VIII be un-
derstood to represent only the views of the
writer's. All communications must be accom-
panied by the name of the writer, not for
publication unless so desired, but as guaran-
tee Of good faith.-EDs.
Reply to Taxpayer
EDS. REcoRD-UNIoN: The communi-
cation of Taxpayer" in your issue Of
this morning, who was introduced by
you as one ''who has been one OF Sacra-
mento's leading citizens for forty
years. with every opportunity to know
the facts,n and with the commendation
that ''every citizen should read his COM
munication," seems to me to contain so
many misstatements and misleading con-
clusions that ask Of you a short space
for comment 1t is to be regretted that
Taxpayer" did not sign his name and
give us the opportunity of estimating the
value of his conclusions by his past ac-
tivity in connection with the liquidation
of our city debt. Sometimes it helps a
good deal to know what one has done
and, from his easy style and ready
handling of terms and figures. he
certainly has had some part in
the management of our city affairs.
But as he has thought best to withhold
his name. we have only the cOmmunica-
tion to engage our attention. and / will
follow the order of his letter as being
most convenient to anyone who may wish
for an answer or for further discussion
upon any of the points raised.
i am sorry that at the very outset he
should think it not material whether the
Trustees or his antagonist should know
much or little OF the subject, for one OF
the Trustees informed me that Mr.. De-
vine had looked the whole matter up.
This, of course, he did not know. but one
thing I think he does know, ii he has
lived here for forty years, that the FUNDED
Debt Commission was in no way respOn-
sible for the city debt, nor for the present
tax levy; that when it was established
the city was running behind at the rate
of SIS, 900 per year; that the Commission
ers have served without compensation,
and that they have never made a state
ment "a golden promise') but what has
been finally justified by the facts.
1t is quite true that the Funding Act
provided remarkably strong sinking
fund, and it is just as true that if the pro-
visions of the law had been faithfully
carried out we should not now have any
debt, but they were not. The revenue in
the sinking and interest fund January l,
1860, was $l03, OF, and the annual interest
only SS7. .456. Revenue to same fund for
year 1860, SS7 ,030; annual interest, $50, 494.
Revenue for 1861, S77 ,636; annual interest,
$50, 1856, and there has never been year
from 1861 to 1883 when the revenue to the
sinking and interest fund would pay tho
annual interest on the bonds, and 1t
steadily and regularly declined from 1861
until the revenue for the year 1871 was
only S5s.754. with an annual interest OF
1872, l54, and deficiency at that time of
$3.50, 1856. The flood of 1S61-62, and the
consequent depreciation of property, and
the negligence and refusal Of the Trustees
to comply with the law, must answe for
this condition, and while this is true. it is
but fair to remember that it was in no
hostile spirit that the Trustees Of that
time sought to tighten the burdens OF
taxation by evading the law.
But when Taxpayer" states that il
the law of 1858 had been allowed to take
its course without interference by this
commission there would not now be
more than one-h half of the first quarter of
this debt unpaid. he has made a singu-
larly dislngenious statement, for he
knows that more than half Of the Wh0te
debt has been paid. If any part of the
first quarter is unpaid to-day, it is be-
cause the holders OF the bonds would not
part with them, but were holding them
for past due interest, which by the decis-
ion of our court to-day they will be de-
MED.
Moreover. the commission was not
called into existence until the growing
condition of the city's affairs were be-
coming so alarming that it was felt some
remedy must be found. If the commits
sion was such hindrance to the opera
tions of the Act of 1858, why was not its
beneficial effects secured during the frs,
nine years of it's existence? During all
that time, from 1858 10 1872, the bonded
debt was not diminished in volume, but
increased from 81, ,457 900 January /, 1860,
to 81 ,535, 800 in 1872. Doesn't Taxpayer"
know that the law is just as vital to-day
as 1t was in 1858, when the revenue ex-
ceeded the interest by $l5,561, and that
if the back interest was paid up II
would be the Treasurer's duty to-day tC
advertise for the surrender Of bonds with
any surplus he might have. But why is
not the back interest paid up? Simply
because we have never had money
enough to pay it up. And 1t makes nc
difference who holds the interest coupons
The only question is to secure money
enough to pay the interest.
There has been paid into the sinking
and interest fund since January l, 1859
81, 49, 600, and there Is now in the fund
something over 100000. But the interest
on the bonds (the old bonds) alone
amounts. since their issue, to over S3,.
100000 up to January l. 1895. Tax
payer" says the back interest in all these
years has been reduced only about
$500, 900. / don't know what he means.
The Interest overdue in 1872 was about
$3.50, 900, and on January l, 1895, it was
about $3SS. S.246, less 100000, amount in
sinking fund. or $2SS, ,246. If he intends
to convey the impression that the city
debt is only 100000 less than 1t would
have been had not the Funded Debt
Commission been in existence, he needs
some light. From what has been already
stated, that the fund has never been suffi
cient to pay the interest alone, with moth
ing to apply in the redemption of bonds,
it will be seen that the total debt to date
would be the overdue interest, S2SS, 246,
plus the total issue of bonds, viz. 81,
$50. 900. or 81. .824, 146. Now, as opposed to
this. the actual debt held by outside par
S121, ,30S; in all, S734. .70S, less amount,
100000, in sinking and interest fund, or a
net Indebtedness of 1854. .708, showing that
the existence of the commission has saved
to the city over Sl.lS9,438. These figures
are under the actual facts. The figures
for past due coupons In the hands OF out
side holders are somewhat in excess OF
the amount named above.
"Taxpayer' has made another mislead-
ing statement about the uses of the fund
by the Commissioners. Not only did
they buy largely of coupons, but they fre-
uuently used the surplus after buying all
coupons offered at reasonable rates to buy
bonds. and SO operated upon these two
classes of securities. buying those which
seemed to promise the best returns
to the city, and it was the constant
aim of the commission to get hold
of all the interest coupons it possi-
bly, could. 1t is really too bad that
the city did not have the foresight
which Taxpayer 7aoao sees we ought to
have had. Where was Taxpayer" ali