The record-union., 1895-06-01

the time the debt was incurred it was
Sl,o35.000. We owe now, exclusive of
money in the sinking fund. s6l3,0O Our
annual income Is about S150, 900 per year.
The city is in condition that needs sew
ers anu machinery for the Water W orks.
OF course we cannot compel the bond
owners TO surrender their bonds and
take d per cent. bond; on the other
hand 1t would not be wise to issue live
interest," bearing bonds in the place Of the
dead bonds. The Funded Debt Commits
sion, however, can take the per cent.
bonds and hold them until the bond
holders get ready to surrender their 1883
bonds and take the city's bonds. In the
meantime the city can have its sewers
and Water Works improvements.
Mr.. Davis 1888 bonds are not worth par
and the city should not pay par for them.
They are worth what the city makes
them worth. The city is not suffering
more than other cities from heavy taxes.
but we think il is. He had never known
a governing board to pay off a debt until
it had to.
No other city had paid off such heavy
debt In SO short a time without injuring
itself Sacramento City has done it, how
ever, and he knew of no better city. lie
believed that at the proper time the 1883
bonds can be bought for eighty to eighty
tive cents, and at the same time the sew
ers and halls can be built, provided the
Funded Debt Commission will consent
to help. We cannot force people to buy
our bonds, but the commission can han
die them. He was sorry to see the situa-
ton was 30 strained. The Trustees,
Mayor and Funded Debt Commissioners
should not be at loggerheads, for they
are all anxious to pay the debt and only
differ as to methods.
After the decision of Judge Hunt de-
claring that past due coupons do not bear
interest, it was a mistake for the COM
mission to buy 1903 bonds at par when
they could at that time buy 1888 bonds for
81 cents. He was satisfied that the suit
for the interest on past due bonds would
be decided in favor of the city and the
bondholders would be glad to sell their
bonds. He thought we could not do bet
ter than to pay off the debt without re-
funding it, or hurt the bOndholders moro.
In justice to the commission he must say
that it had earned for this city $40, 0o6
since 1890.
In order that no question can arise as
to the validity of new bonds, it would be
we'll for the Funded Debt Commissioners
to cancel all the bonds in their hands due
in 1895 and 1903, amounting to $685. OO
MR.. LINDLEY's OPINION.
D. A. Lindley addressed the board.
III quoted from an article published in
the RECORD UNION on September -,
1885, predicting that in twelve or fifteen
years the debt would be paid of. He
would not buy bonds OF 1903 at par. The
principal reason for retunding with
many people is to let their children pay
the debt. These people do not want to
pay it and never did. There are other
people who want to refund the debt in
order to give the city chance for i'm
provement. One hundred and fifty
thousand dollars will build sewers, $780,
900 will give good water plant. SoO,OOO
more will build mains to the gravel pits
or to Guthrie's Station or beyond. and
get clear water. II the proper bonds are
issued, the Funded Debt Com mission
can purchase them, and the city get the
benefit of them. In 1892 another pre-
diction was made that the debt would be
paid off in 1898. One years revenue has
been expended in paying for new bonds
instead of buying old ones, which sim
ply puts off the date OF redemption one
year longer, or till 1899. The situation
now Is as follows:
Bonds OOO
Past due coupons 1ess amount in
fund EoI, 4/4
Old debt. ,773,O74
Levee bonds OBSERVATION-DISCLOSURES. 10000
Street bonds ACKNOWLEDGEMENTS. $4,000
Total ............ ............S 81, 932, O74
Fifteen per cent. of assessment
roll OF $14, 900, 2,23o 900
Balance leeway for new bonds. S3O2,926
There is then leeway Of $500, 926 for
new bonds now, and as the revenue OF
the sinking and interest fund is S166, 900,
and the interest falling due to be sub
tracted from it is $4,000. this leaves
legal leeway of $4,000 Tor an annual
bond issue for future improvements.
IAWTON'S REASONS.
President Lawton said be was aware
that he was opposed to the ideas of two
gentlemen we'll qualified to speak on the
subject but he should endeavor to show
good reasons for differing from them.
The city, to-day, as Mr.. Gerber had said,
has not very good credit among outsiders.
but it is in position 10 so hold the money
that it can hold off the bondholders for
several years and make them come to
terms. If the matter is handled properly
there is no doubt that they will surrender
their bonds and take the city bonds at
per cent
Now that the question of refunding the
debt Of Sacramento is before the people,
the following figures may be Of use in
settling the question as to whether it is
advisable to refund the debt at this time:
The city owes on coupons (or back
interest), and has the money to
y................. .................S 81 81, 3OS
We owe on bonds which fell due in
s21o,1oo
We owe on bonds which fell due in
1898 l99,lOO
Total due on past due bonds. S4o9, 200
Amount of bonds due in 1S9S......... 124, 800
Amount of bonds due In 19O3......... $4,000
Total bonds outstanding of 1858
issue .s6l3,4oO
The amount of surplus which will
be in the Sinking and Interest
Fund, providing we refund will.
before December 31St, far exceed 1900
100000
It will therefore be necessary 10 issue
5000, 900 new bonds to take the place OF
the bonds issued in 1858.
We also owe $4,000, known as the
levee and street improvement bonds,
which are held by the Southern Pacific
Company, and are not considered at this
time as it is presumed that we can buy
them at a reasonable figure, and if the
city refund its debt this summer the
money will be in the sinking and inter-
est fund to pay for them before Deem
bsr 3lst, as SO per cent of all water and
license collections from this time until
December 3lst will go into that fund.
l therefore find that the city's debt is
$500, 000 and if we refund the debt it will
be necessary to issue $780, 900 in what is
known as forty-year serial bonds-that
is, one-fortieth OF the $780, 900 will be
paid at the end Of each year, thus reduc-
ing the debt yearly.
Should we refund. the city's annual in
come and expenses will be about as fol-
lows:
To be paid out for salaries Art Gal
lery, street lighting, extra legal
services. rents, Board of health
fuel TOR Water Works aud all
other bills that are now paid out
OF the general .............S1o9 9e6
Paid from police fund 1864
Paid from cemetery fund............. 7Ol7
Paid from street fund, including
sprinkling - "a 6S7