Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1897-01-14

have heretofore said IN this and former COM
munications on she subject. to suggest another
plan for the solution OF this university prob
lem-and that is to enact law directing tbs
fund commissioners to issue a state certifi-
cate of indebtedness non-neQotiabIe and
non-transferable, to be held in trust for the
seminary fund, in an amount and at rate OF
interest sufficient TO sustain the school, and
thereby transfer the liability of its support
from the revenue fund to the interest fund.
The certificate should be for at l9aSt 5000. 900,
and should bear interest at the rate of five Der
cent. That would create an annual revenue Of
100000. which, added to the interest the
present endowment, would make total in
come reasonably sufficient to accommodate the
needs of the institution for years to come. Put
1t on its feet and make it independent This
plan, if carried out, would also INSTANTLY re-
move the pressure on the revenue fund and
leave it in good condition 10 meet the other de-
mandS against 1t The interest fund is the
fund created by the lax OF ten cents on the
hundred dollars levied to meet the public
certificates OF Indebtedness. The bonds as
at the pleasure OF the state;
be retired within the next half decade. The
certificates of indebtedness are not paw able at
all. The certificates, all non-negotiable and
non transferable are held in trust by the state
treasury for the benefit OF the public school
and seminary fund-by far the greater part for
these certificates is expended every year to
support the school or schools to which the in
terest belongs. No provision is made for pay
ing the principal, nor is it contemplated that
the principal will ever be paid. The certifi-
Gates constitute permanent debt, Ii debt it
certificates is paid out of the interest fund. !"
just as the interest on the bonds is paid
In like manner the interest. on the
lied, would come from the same fund
The effect would be to increase by SO 600 per
year the amount that would otherwise be with
drawn from the fund to pay interest, and di.
miniSh to that amount e sum that would he
annuity transferred TO tie sinking fund to re-
tire bonds 1t would re ult in delaying for a
few months the final lie aidation of the bonded
debt That, however, / am sure no one would
regard as n matter of consequence. Here, then,
is an easy solution Of this perpIexfng problem
II this can be done. 1t would transfer the bur-
den OF maintaining the university to fund in
splendid condition to assume it without doing
injury to any other interest. It would be the
means OF realizing at once the hopes of all the
verstty on q plane of independence. 1t would
put end to all the exaSperating conse-
Quences incident to the methods and policies
heretofore pursued, and would start the instl-
tuition, confident and self-reliant, a career of
progress almost certain to put il beyond neigh
boring competition and make it one Of the
really great universities OF the republic. And
all this would he done without increasing the
present burden of taxation single farthing.
1t is merely to shift the responsibility of main
tenance from the revenue fund to the "in-
tereSt fund" Can this be done under the con-
stitution of the state: EESept for the doubt I
entertain on that question l would not hest
tate to urge without reserve the instant adop-
ton of the scheme. am not without doubt,
however, as to the conStitutionality of the
proposition. The power to levy taxes is lin
tied by the constitution. Section s, Article Y
of that instrument provides that
The state tax on property, exclusive of the
tax necessary to pay the bonded debt of the
state, shall not exceed twenty cents on the
hundred dollars valuation: and whenever the
taxable property of the state shall amount to
nine hundred million dollars, the rate shall not
exceed fifteen cents.
This provision absolutely fixes the tax limit
for general revenue purposes. But that is ''eX-
elusive OF the tax necessary to pay the bonded
debt of the state.
Section II. article X provides that
Hereafter there shall be levied and col
lected an annual tax sufficient to pay the &C
cruing interest upon the bonded debt of the
state. and to reduce the principal thereof each
year by a sum not less than two hundred and
fifty thousand dollars, and whenever
said bonded debt is extinguished. or a sum
vided for in this section shall cease to be as
seSSed.
This section, by reference to another, also
provides that this tax to meet the debt shall
be appropriated and paid out" for the follow
ing purposes:
First, for the payment Of all interest upon
the bonded debt Of the state that may become
due during the term for which each general as
Sembly is elected.
Second for the benefit OF the sinking fund
which shall not be less annually than $3.50. U0J
Now, this section, IA. authorizes tax to pay
| the interest and reduce the principal of the
bonded debt" and for that only; while the
section first quoted limits the amount of the
| tax which may be levied for general purposes
| If this was all the constitution had to say on
| the subject, how would the question stand? Il
| this was all the constitution had to say, there
! would be no inhibition against issuing the
certificate of Indebtedness. But even then, a
question would arise as to the source from
which the money would be derived to pay the in
| terest on 1t, provided the general revenue tax
now amounting to fifteen cents on the hundred
dollars, did not produce a sum sufficient fol
| that purpose. As the debt tax is levied fol
and reducing the principal thereof, it might BE-
| questioned whether any part of that tax coulC
| be used to pay interest on non-payable GER
| lafAR
| But what have quoted is not all the constitu-
| ton has to say on the subject Section ~
| Article " provides that
| The general assembly shall have no power Il
| contract or to authorize the contracting of AMI
debt or liability on behalf the state or to issue
| bonds or other evidences OF indebtedness:
| thereof.
That is the language Of the constitution
| There are some exceptions specifically made
| to the general rule, but none of the exceptions
are pertinent to the question under considera'
| tion. The language quoted is broad. It denies
| to the legislature the power to contract
bond or other evidences of indebt-
| eduess." That leaves but one question open
| and that is the one of construction What d.
| the words debt or liability mean, as they
are here used? Bonds or other forms of in
debtedness payable to an individual holder
| any obligation to pay something to one stand.
| ing as a creditor-would beyond doubt fal
| within the prohibition. But a certificate o.
the kind suggested is not debt of that char,
acter: Can 1t H. properly said to be debt 81
all? The certificate would be an obligation o
| the state paya6l in effect, to itself. It would
| never leave ting possession of the state. j
| could never become the subject of individual
| ownership. It would therefore, I assume
| be an obligation the state could change
| simply be means provided by the state Il
support one of its own institutions. which, II
| not supported in that way, must be in another
| and no matter what way may be chosen 1t can
| only be done by taxation. Let US test it in
to be sufacient to justify a provision Of this
| nature out of them Let US suppose the legtS-
| lature to be DESTROYS of setting part certain
| amount of the annual revenues for the support
| of the university, and to put 1t in form Il
| make that amount both certain and permanent
| Would not the legislature have the power &c
| authorize the issuing of an Understanding
| certificate, and to direct that so much CT tbs
| general revenue be set apart each year a:
| that it be applied to the maintenance OF the
| university, in lieu OF special an
t nus1 institution HAS has been sg1por;ed b,
| specific appropriations out OF the genera
| fund Could not the legislature. If 1t cared TO
| establish fixed charge by general law againS
| that fund in place OF an uncertain and varying
| charge fixed by special appropriation law!
| passed from time to time? II a certificate. the
/ principal of which is non-payable. but the IN
| terest on which is made a charge on the rev
| enue fund, can be constitutiOnally issued. theI
| the constitutional question involved in tli!
| discussion. If not eliminated, is narrowed u
| one of funds II it be conceded that certifi
cate of Indebtedness can be issued as a charg,
| on the revenue funds, then the certificate il
not such q debt" or evidence of debt as tn
| 44tA section OF Article ~ IOrDlQS the genera
| assembly to contract: and the only question
remaining is whether il can be mace a charg
On the interest fund. To my mind this present
the greatest difficulty As I have alread,
shown, section IA. Article Y. provides for
| tax Ito pay the accruing interest upon tn
bonded debt and to reduce the principal there
Of etc: and it also provides that '"wheneve
| said bonded debt is extinguiShed, the tax pru
| vided for in this section shall cease TO be as
| SeSSed-" Five years hence the bonded deb
| will be eXttnguished- What. then. would be
come OF the certificate OF indebtedness: II tn
| tax should then cease il would thereafter b
| necessary to pay the interest out OF the Teve
| nue. fund or cancel the certificate. And IL tina