The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1899-12-17
DESIRES
BONDS OF CITY
FREE FROM TAX
Says They Should Be
Kept Home.
SAVINGS BANKS CONCERNED
EASTERN STATES NOW REAP A
BIG HARVEST.

A strong campaign will be made In favor
OF the constitutional amendment to be
submitted to the people for adoption or
rejection next November TO remove the
taxation from State, county and munich
pal bonds. The Merchants Association
and the Municipalities Convention have
declared In favor OF the proposed amend
ment- In fact, the proposition was
brought before the Legislature by reason
OF the action OF the Merchants Associa-
ton 1t is also favored by the Bank Com
missioners. The Importance Of the matter
becomes apparent In view of the forth
coming bond elections to provide funds
for the extension Of the park area Of the
city, for the new schoolhouses and the
sewer system. Unless the amendment 10
the constitution shall be adopted the in
tereSt upon all the bonds TO be voted will
be paid out OF the State, as the interest
on about all the State. county and NUM-
cipal bonds has been paid out ever since
the new constitution went into effect
The amount OF the municipal issue OF San
Francisco, If the different propositions TO
viii amount to Sl1. 000. 900 The State ferry
bonds, 10 the amount OF $6O0.000 are now
held out OF the State and the interest
money goes abroad. At the same time the
savings banks OF California cannot profit
ably hold either State. county or munich
pal bonds OF California as an investment,
while outsiders find them good for money
making.
Mayor Phelan introduced the resolutions
concerning the taxes on bonds that were
adopted by the Municipalities Convention.
Yesterday he gave an explanation of the
matter. ''The situation is this, said the
Mayor. 'if the constitutional amendment
shall fall TO be adopted all the interest on
the new bonds TO be issued by San Fran
cisco will go abroad. II the amendment
shall pass there will be way to keep the
money at home. The constitution makes
all bonds taxable. The Supreme Court OF
the State has held that this constitutional
provision does not apply TO the bonds Of
Semi-public corporations. That issue is
before the Supreme Court in the Hibernia
Bank case now, resulting from the assess
ment by Mr.. Dodge. But there has been
State, county and municipal bonds. / in
troduced the resolutions adopted by the
Merchants Association because l knew
then that there would be call for a local
bond issue Of this city TO consider. You
can see what IL would amount to on the
81, 100000 OF bonds II they should all be
voted.
"A striking feature OF the situation now
is that our savings banks are unable TO
invest the funds OF their depositors At
the same time the people who pay taxes
to provide the money for the payment of
the interest on the bonds are not able TO
invest in the bonds proftably. The East
ern man grabs up our bonds and ne can
hold them profitably because he does not
have 10 pay taxes on them. But our saw
ings banks must pay taxes on any bonds
OF the class mentioned that they NAV
hold. They are compelled to show them
up TO the Bank Commissioners, and II IS
an open door in the matter Of information
to the Assessors. The private individual
may evade taxes through perjury
"Of course our bond elections take place
within q few days, and the proposed con-
stitutional amendment will not come UP
for adoption until November, 1900. II will
not be necessary TO issue any OF our new
bonds until the time comes to paw for
something. In the case OF the park bonds