Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1899-02-24
w ESTMIN STBR.
Shall the Town Issue Bonds 10 Pay its
Indebtednessi

One of the questions to come before the
legal voters of the town of Westminster at
the next town meeting is whether the
town shall vote to issue bonds TO pay and
cancel its outstanding Indebtedness. The
auditors find, upon examination of the
books of the town officials, that the total
outstanding debt of the town, at the end of
this fiscal year, is $4,000 in round num-
bers.
Waving, for the present, all discussion
which will arise as to why and how this
debt was incurred, and whether or not
town officials have always been careful
enough in administering town affairs, the
main question now, and the one ques-
ton propose to discuss is the important
fact that the debt exists, that it is a lust
debt, and that 1t has been legally contract
ed and must, and will, be paid in full.
The only question at issue is how are the
taxpayers of the town of Westminster
going to decide by their votes which method
to adopt that will eventually wipe out this
debt against the town. Here we find
men of different opinions, and of opposite
views. There are some, l am told, who
favor raising heavy town tax for a few
years, and in that way paying off and
clearing up the debt; but my impression is
that these men, while public spirited and
willing to put their hands in their own
pockets and pay their share of the debt,
and be done with it, are very largely in
the minority. | believe that the great
majority of The taxpayers of this town are
paying now about all the tax they are
able to pay, and that to vote a tax large
enough TO pay the indebtedness of the
town in few years would force many
farmers to borrow money individually to
pay their taxes. This would seem to be
poor policy, at least for the individual,
and the taxpayer could hardly be expect
ed to vote so directly against his own in
terest.
Others favor the policy which is at pres
ent pursued; that is, the town treasurer,
by and with the authority of the town,
borrows what is necessary from time to
time TO float the debt, and for which money
the town pays 8 per cent annual interest
Those who favor the present method claim
that this money is largely borrowed from
taxpayers in the town, who are thereby
benefited by finding secure home market
for their surplus money, and that, if all
this money is taxed in the town, the town
would derive benefit in taxation, which
would offset lower rate of interest than
per cent, possibly making it less than
per cent actual cost to the town.
Theoretically this seems good, but the
fact is that all of this money has never
yet been taxed in the town, and probably
the net results have fallen far short of
what its advocates claim for it, and would
continue to do so.
Now, the statutes have provided for
towns in our condition. Section Bill,
Vermont dc
town which has outstanding and unpaid
orders, notes, bonds or coupons lawfully
issued, may issue other negotiable notes or
bonds to pay or retire the same" and
sections 3ll2, BIB, 3114 and 3115 provide
the methods to be pursued in doing so.
Space forbids me here TO give the sections
mentioned, but, to be brief, 1t can be done
by vote of the town authorizing its Sc
lectmen and treasurer to issue the bonds;
and there is no question in the minds of
the best legal ability in the state, but
what the bonds so issued would be legally
issued, and secure and safe to the pur-
chasers. There have been great MANY
special acts of the legislature giving differ
ent towns in the state authority TO issue
bonds, and some seem to think that an
act would be necessary In our case, but
am informed by reliable legal authority
that such an act is not necessary, and that
the Issuing of bonds under the statutes,
without an act of the legislature, would be
as lawful, and the bonds would be as
valid, as though there had been a special
act enacted.
In the case of the town of Brattleboro,
there was a special act passed in 1896
giving the town authority to issue bonds
to the amount of $685. 900, but | am in
formed by the legal counsel for the town
of Brattleboro, who looked after that
matter, that the Boston parties who
bought the bonds required special act of
the legislature before they would take the
bonds, for the reason that there might be
a question raised, sometime, as to the
legality of town putting money into an
opera house, and part of this money was
for that purpose therefore the act of the
legislature legalized the loan.
You will notice that section Bill reads
notes, bonds or coupons, ETC., lawfully is
sued. An act of the legislature simply, in
our case, would make our outstanding OBJ.
legations lawfully issued; but, as there is
no question about the legality of our town
debt, such an act would not be necessary.
Now comes the plan that | advocate.
viz: Let the town vote authorizing its
selectmen and town treasurer to issue on
July l, 1899, according to law provided.
500, 900 town bonds. Let them be in de-
nominations of 500 each, and let them be
registered; make them to draw per cent
annual interest, and make the first 10
bonds Tor $1,000 expirs July l, 1900, and
10 more each succeeding year, until they
are all cancelled. State in each bond the
time when they come due. Then let the
town treasurer advertise, and offer them
for sale to the highest bidders, and | be-
lieve that every bond will be taken in this
town, and at par or above. My reasons
for such belief are these; The money is
here, the investment would be safe, and at
home, and they would be exempt from
taxation in the town, for under federal law
a town cannot tax its own written obliga-
tions, and the supreme court of the United
States has so decided. Therefore 4 per
cent interest bearing bonds not subject to
taxation, excepting for state and county
taxes, would be considered a safe, conserv-
alive, and fairly profitable investment. In
fact, better than money in savings banks
in this state, as far as interest is concerned.
and also absolutely secure. Some banks
now have reduced interest rates to 3I.2l
per cent and many will follow. Nv oh
ject in issuing the bonds in small denomi-
nations is that people who have small saw
ings can invest in them if they wish.
This plan would reduce our interest &C
count 5000 the first year, and increasingly
continue to reduce both the interest and
Il. 1.l.N