The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-03-12
CITY WILL ISSUE BONDS
HOW THE INDEBTEDNESS OF ST.
PAUL WILL BE PAID
Charter Com IN issiOners Object to the
Issue of Tax Levy Certificates-
Under the Proposed New Charter,
If 1t Is Adopted, the Bond Plan
VIII Go Into Effect.

If the new charter is adopted by the
people at the coming election the city
of st. Paul will cease issuing tax levy
certificates in anticipation Of it's reven-
ue. In place thereof it will issue bonds
to pay up the floating Indebtedness,
which Is approximately 10000
Such was the unanimous action of
the charter commission last night.
Title 2, Of chapter s. was next in
order for consideration when the COM
mission convened. The title deals with
the subject Of tax levy certificates"
After a full discussion. in which City
Comptroller McCardy participated. the
entire title, containing eight sections,
was stricken out.
Col. Clough, the chairman of the
committee on chapter 8, opened the
discussion with q presentation Of the
situation confronting the commission
In view of the limitations and restric-
lions Imposed by section 10, Of the
enabling act.
Col. Clough pointed out the fact that
under the enabling act the new charter
could not provide for the Issuing of
tax levy certificates, pledging the
faith and credit Of the city for their
payment at maturity as Is now the
case. Instead, the certificates must
provide for their payment out Of the
taxes collected for the benefit Of the
particular fund against which they
were issued.
1t was the sense Of the commission
that this restriction would practically
render the tax levy certificates unsaIa-
BILE.
Proceeding, Col. Clough referred to
the provision of the enabling act en-
towering the city to issue bonds to
pay the floating Indebtedness. In Col
CloughS opinion this was the prefera.
BILE course to adopt, and the commit
tee had accordingly inserted a section
in title 6, Of chapter 5. empowering
the city to issue bonds for this pur-
pose.
In support Of his opinion, Col. Clough
demonstrated that the adoption Of the
system of issuing bonds would lessen
the cost or expense Of financing" the
city. Under the existing charter, the
tax levy certificates issued in any one
year, not maturing until some time dur
ing the first half of the succeeding
year. overlapped the certificates issued
for the second year.
In consequence the money that was
hired, say in January, 1895. for the
twelve months Of that year, really
worked overtime in that particular,
over fourteen months while borrowed
or hired for 1897, was made to work
for more than sixteen months. Thus
two sets Of tax levy certificates were
outstanding during the first few months
of each year. In this way the inter
est account was increased unnecessar-
lily. In one year since 1895, the interest
charge on the certificates amounted to
$4,000, while the interest on the Ger
tlf1cates belonging to the year itself,
wes less than $4,000.
In conclusion. Col C1ough moved
that it be the sense of the commission
that. hereafter. instead of selling tax
levy certificates, the city issue bonds
to take up the outstanding certificates,
amounting to approximately 81 LOG, 900,
and thereafter cease to issue any more
tax levy certificates.
In response to q request for his opin-
ion. Comptroller McCardy declared that