The record-union., 1898-02-16
THE CITY INDEBTEDNESS.

At the annual meeting of the Cham
Der of Commerce last week Mayor Land
presented an exact statement of the
city debt. The showing was most
gratifying. 1t made 1t clear that the
city is very nearly out of debt, nearly
lid of the incubus that has weighted
her down for half a century. The
Mayor at that time expressly declared.
as the result of interviews with the
Funded Debt Commission, that it is
anxious to close up the matter and
wipe out the last vestige of the debt,
and that it would cooperate with the
people in any reasonable plan for do
ing so.
These statements We're made upon the
assumption that the city would win it's
case in the Supreme Court concerning
the payment of interest upon bonds
past due But that case has gone
against the city by one vote in the
Supreme Bench, thus augmenting the
sum to be discharged by S1S5,000. This
debt draws interest at the rate of q
per cent. One of the Justices of the
Supreme Court holds that under the
decision and the present plan of pay
ing the debt, the city viii have to Pay
interest on the matured obligations
of 1893 until away into the twentieth
century while unable to discharge in
terest falling due in the present CEN
tury.
This is not a pleasant prospect by
any means. Happily there is way
out. The last bonds do not fall due
until 1903, but OF those obligations the
commission already holds in trust for
the city the major part. The COM
mission has also advanced to the city
other Improvements. Practically that
was case of the city borrowing from
one of it's pockets for the benefit of an
other of its pockets. But, as the law
requires in order to clear off the debt
these internal obligations must be float
ed or lifted, that the commission may
have its money in hand to settle its
final account
Now 1t is conceded that the bond
holders still holding the city obligations
are unwilling to have the remainder
of the debt refunded and without that
consent, refunding is impossible In
other words our creditors have a good
dhing, their money is invested in per-
feet security at fine rate of interest,
and they do not propose to kill the
goose that lays the golden egg. We
cannot complain of that-it is bust
ness But since we must now pay in
terest upon overdue Indebtedness. and
as that obligation must long continue
since the fund provided for interest
and redemption will not with desirable
speed discharge tine liability, the ques-
which Sacramento can be rid of the
remainder of her indebtedness. more
than two-thirds of which she has COM
pletely discharged? 1t would seem
that there is way out. Simply sub
NIT 10 the people the proposition 20
bCiloN the necessary sum at a lower
rate of interest to wipe out the old
remainder bearing a high rate.
1t is conceded that the city is finan-
cially sound, that her credit is good.
her security ample and that money
going begging for investment is to be
had at, say, two per cent. less interest
than we are now paying upon the old
bonds. Why not borrow the sum nee
essary--it is not excessive-pay off the
bond holders at once to the last date.
and the last cent that will be due at
the last moment of the liability. and
pocket the difference between the high
and the low rates OF interest. besides
saving lawyers and court fees? We
have gained nothing thus far at the
hands of the law. We have paid tens
of thousands Of dollars to lawyers and
have not advanced IN consequence a
single step. In fact by delay We have
got deeper in the mire. The city is
already sued again and we are again