The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1895-11-08
THE CREDIT OF THE CITY.

Much has recently been said and
written about the credit of the city,
and how it may or may not have been
impaired by the refusal of certain par
ties to purchase the recently voted
electric light bonds. Itis-more than
likely that the idea that the refusal
of these bonds seriously, if at@alL i'm
pairs the credit of the city IS purely
imaginary. II the bonds were declined
because of technical errors in the
proceedings leading up to their issue,
these errors may be easily corrected,
and they in no way reflect upon the
credit of the city. Errors occur in all
business transactions. But if the bonds
were declined because the city exceed
ed it's authority or power in the issue
of the bonds, then if their refusal re-
fleets upon the credit OF the city it is
quite proper that this should be so.
But what is it that may and does re.
fleet upon our credit? ="
The credit of municipal corpora
tion is maintained or lost by about
the same methods as those by which
the credit of business man is main
tanned or lost. Its credit is good or
bad in proportion to it's ability and
willingness to meet is obligations
promptly When this ability or
willingness becomes matter of
doubt that moment it's credit be-
comes a matter of doubt. This is
true in all business relations between
men.
That the finances of this city are in
somewhat strained condition no
good citizen will for moment ques-
tion. 1t is 'quite natural that under
present conditions our securities will
be more closely examined than would
be the case if we were free from debt.
We have reached a point where we
all are, or ought to be, very much in
terested in our credit and standing in
the financial world. That there are
those among us who fly into print in
defense of the city the moment it's
credit is questioned is very encOur-
aging rather than otherwise. This
ought to be so; we ought to main
tain the good name of the city at all
hazards; business pride alone COM
mandS it.
How can it be done? The sole pur-
pose of this article is to suggest that
we can only hope to maintain an I'M
impaired credit by contracting no
debJS which we cannot pay; this
suggestion is little late perhaps; we
have made many debts which there
was no reasonable probability of our
being able to pay at their maturity,
and this practice cannot be diScOn-
tinued too soon. 1t ought to be an
int1eXible rule with the officers to
whom our finances are entrusted that
in no event will our revenues be an
ticipated before they are in sight.
1t is probably true that our present
council was bequeathed legacy of in
debtedness beyond their ability to
pay; an unpleasant condition of
things surely; but the fact being as it
was and it being well known to the
council it's duty was plain. Neces-
sary current expenditure should have
been pruned TO the very extreme of
economy. A standing reason for re-
fusal to make new Improvements
should have been want of funds, and
it would have surprised most of us to
could have been restored. The
COuISC dCUudlly pulSuCu uuIluS OuC
present fiscal year has been quite the
reverse.
The charter provides that the coun-
Gil may, during the fiscal year, (from
the second Tuesday in April to the
second Tuesday in April) by two
thirds vote, issue bonds bearing inter-
est not exceeding seven per cent, run
ming not exceeding one year, sin an
ticipation of the taxes and revenues
of such fiscal year." Provided that
the amount of such bonds outstand-
ing shall not at any one time exceed
One-third of such taxes and revenues. "
What does this mean? 1t is an ele-
mentarY principle that municipal
corporation has such powers as are
given it by law, and that those powers
must be exercised in the manner pro-
vided by law, and not otherwise.
If this be so, then it is violation
of the charter to borrow money with
out two-thirds vote of the council,
and so it is to pay more than seven
per cent interest, and more import
ant yet is the prOviSO that no more
than one-third of the revenues for the
fiscal year shall be anticipated. 1t
seems to be fairly contemplated by
VEADC NJ JNTENCE DAM