The record-union., 1895-05-03

fund.- It is also a fact that the annual
interest on the unredeemed balance of the
debt was punctually paid in 1860, 1861
and 1862.
In even mere glance at the financial
history of the city the fact that the Hoods
of Decem ber, 1861, and January, 1862, Sc
riously crippled the city in its efforts to
meet the obligations to its creditors
| which it had assumed in 1858. should not
be omitted, and, that as result, unpaid
interest to considerable amount accum-
ulated. But the city rapidly arose from
those disasters, and as early as 1868 was
in condition to resume the performance
| under the law of all its obligations. The
Consolidation Act of 1858 had been re-
pealed in 1863, and the city was in the
full tide of advancing prosperity under
| its new charter of that year. The pro-
visions of the old Act in relation to the
| funded debt were. of course, preserved in
| the new charter; one change, IN no wise
detrimental to the creditors, but enabling
the City Trustees the more readily to re-
deem the bonds. was made in the follow
ing words: 1.-The excess of said funds after
the payment of said interest shall be ap
piled to the redemption of said bonds in
such manner as the Board of Trustees
may determine"
If this Funded Debt Commission
scheme had not been devised. and the
city had returned to and kept straight in
the path OF duty plainly marked out in
the law of 1858, our debt trouble would
unquestionably have been over with
long within the nominal date of the ma
turity Of the bonds. according to the
original design.
In 1872, when the Fund Commission
scheme eliminated in a law creating
commission OF three persons without
limit to their term of Office, the back in
terest Tor the years, in part for 1868, all of
1869, 1870, 1871, 1872, amounting to about
100000 was delinquent and unpaid.
This. added to the principal of 81, 574, 800,
made the total Indebtedness on the lst
Of January, 1872, 81, ,974, 500. The bonds
were then worth in the market only
about from twenty to twenty-five cents.
At this date, say about April, 1895, there
| remains of that debt S746, ,600 of which
sum Sll4,939 is unpaid interest. SO 1t
will appear that in twenty-three years
under the administration, or rather the
manipulation of the city debt by the COM
mission, the back interest has been re-
duced less than 100000. The payment of
the coupons representing the back inter-
est should have been the first object, for
as soon as such unpaid interest was out
of the way the city would have been in a
position to use the large revenue OF the
sinking fund in the redemption of the
bonds by Offering them publicly to the
lowest bidders. as the Trustees were
authorized to do, and. as it was sheir duty
TO do. under the law.
But this was not to be. The policy of
the commission soon proved to be TO pre-
vent the city ever getting in that mostdesir-
able situation. In 1877 and a few follow
ing years all the delinquent interest cou-
pons could easily have been bought up at
IL, IL L., !
which the commission acted. Instead of
using the fund it was able to command
for that purpose, It was mainly used IN
buying up bonds which do not fall due
until 1903 and 1898. Stated in few words,
this policy has been to pay the debts
which we don't owe with the funds which
should be used to pay those we do owe.
The amount OF moneys which, since
that date, has gone regularly into the
interest and sln ing fund is something
immense. compared with the debt to pay
which they were collected, and to which
| they should have been applied.
From 1872, inclusive, to January, 1895,
total of 81, ,932, 3327 has been received in
the interest and sinking fund, and yet
S2ll, 800 of the bonds which matured in
1888 and S229, 800 of those which matured
in 1898, together with Sll4,937 of delin-
quent interest, total of S555, S37, remains
| unpaid. Only S35l. 700 of the principal of
the debt, which at this date would have
been past DUE has been paid out of these
immense revenues. leaving $40, 900 OF
principal and Sll4, ,937 of interest unpaid,
with the creditors clamoring for their
money and seeking some way to make
US pay 1t.
Such fnanciering would break the
credit of any bank, mercantile firm or
private individual. 1t has ruined the
credit of the city, so that for years past,
and at the present, its character as a
corporation that does not pay its debts,
having the ability TO pay, is so well es-
tablished in the money markets of the
world that it cannot borrow for any pur-
pose.
To- the above amount of 81 ,932, 3327, re-
ceived from the 30 per cent. revenues,
should be added S2l4, 100. collected by the
commission from direct taxes, thus max
ing grand total of y, 1867.
This sum of S214, go was collected by
the commission during the nine years
immediately following 1872. This period
from 1872 to 1881 was the time when the
price of bonds ruled all the way from say
20 to 80 cents. The Commissioners pur-
chased about $4,000 of bonds at an aver
age of u cents, beside some coupons.
With this money it could have wiped out
all the bonds OF 1888 and half Of the bonds
of 1893. 1t had two courses open-either
TO direct itself to buying up the delin-
Quent interest coupons so as TO enable the
city at as early a date as possible to enter
upon the regular and lawful course of re-
demption prescribed by the Acts of 1858
and 1865, or, to tho purchasing of the
earliest maturing bonds. The first course
would at the end of about ten years, have
brought the commission at the end of
what would have been a useful career
| Just the career for which it was supposed
! i
left the city with its credit rehabili
tated, and in u position to go on
under the law by which the bonds were
| issued, and redeem them in due course
| before their nominal maturity. Had the
| other course been taken the city would
| not now be found with the plague of
| S440 800 of bonds past due for from two to
seven years. The cause of this uncanny
result has already been stated. That fatal
ambition of setting itself above the city,
and perpetuating itself as seeming
necessity, was the error into which the
commission fell, and which wrought the
| evils which have followed.
! If there ever was plain intention ex-
| pressed upon the face of any law that
ever was enacted, such intention is ex-
| pressed upon the face of the Act of 1872;
and that was to create commission for
| the temporary purpose of enabling the
| city TO avail itself of the chance then
existing of buying up its own bonds, and
| to continue such purchases as long as it
could buy them at not exceeding 30 cents
| on the dollar. The law coppelled the
city to levy tax of from 10 TO 30 cents
/ on the 500, accordingly as should be de-
manded by the commission; yet, during
| these nine years, when the bonds could
have been bought at less than 30 cents,
the commission never, except in the year
| 1873, demanded more than a tax of ten
cents. The consequence was that the
above sum of S2l4, 2gO was raised, instead
of $500, 900, which might have been raised
as easily, and with which all OF the bonds
could have been bought in at the rates