Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1899-08-03
THE MATTER OF BOND ISSUES
Present Funded Indebtedness
of County is $646,OOO.
STORY OF A FLOATING DEBT LOAN
The Obligation is Applied to
Only 100000.
but the Amount Borrowed Was s15O,oOo-
How tho Court House Loan oil 100000
May Represent Nearly 100000 Mt Final
Maturity = Need Of Prudence In Debt
Management.

Inc intimation In the county audi
tors, report that the bond issue by the
Levy Court of $3.50, 900 in 1897, for the
purpose Of funding floating debt No. 3,
was not all required for the purpose,
but has been used in part for current
expenses, has provoked comment, and
makes proper. the inquiry as to the
status of the county's bonded debt
There is this general principle Justify
ing the creation Of a permanent debt
by city or county, namely that it is
justified only by exigencies OF the
public service; such as would be the
restoration of the water works Of the
city, in case tho present water works
were destroyed, or the rebuilding of
the City Hall or the Court House, il
they should be destroyed. The require
ment for the bond issue must be inn
perative, and it is always against sound
public policy to burden taxpayers with
a large debt running for long term of
years and bearing interest, to meet tho
ordinary expenses of administration.
Every issue of bonds increases the
annual expenses by adding thereto the
interest on the debt created; so that
the greatest care and circumspection
should be exercised when tho faith CT
payment of large sums secured by
bonds, and ordinary prudence requires
that when bond issue is made, not
only the amount of interest charges,
but certain portion of the principal
of the debt, shall thereafter be pro-
vided for out OF the current and ordi-
nary receipts. So much by way of
setting forth the principle that should
underlia tho ieSua of bnnds
THE BOND ISSUE OF 1897.
Concerning the issue of $780, 600 by
he Levy Court in 1897, the legislation
this direction and for this purpose
eveals peculiar procedure. 1t appears
that application was made to the
General Assembly in March, 1897, for
authority to borrow temporarily $50, 900,
and evidently it was represented to the
General Assembly that this was to be
sufficient to meet the pressing demands
of the county. 1t is therefore evident
that the Legislature, at that time, had
no intention whatever of authorizing
bonded loan of $3.50, 200, for in the act
authorizing 50,000, it was stipulated
that the amount borrowed should be
paid by the first day Of September,
1898, and in the act il was further pro-
the Levy Court TO exceed by its ex-
penditures and allowances for any fiscal
year, the amount of taxes levied for
such year. The Gazette of last week
showed that this plain provision
had certainly been disregarded in its
spirit recently, and it now appears that
it was also disregarded in 1897 imme-
diately following the passage of the act
referred to. A little more than two
months later, on May 2Sth, 1897, the
General Assembly was induced to pass
an act providing for the funding Of the
floating debt OF the county.
The Levy Court appears to have pro-
ceeded upon the superstition that it was
required by the act to borrow $50, 600,
but the plain meaning of the act is
that the court was not to exceed the
actual amount Of debt then due
The General Assembly dealt with
supposed floating Indebtedness and
directed that the liquidation and
payment of such floating Indebtedness
should be made through the county
treasurer under the direction aud
supervision Of the court or committee
thereof, and therefore evidently in
tended that the exact floating indebted.
ness should be definitely ascertained.
There is in the act no authorization
whatever for an issue of bonds for any
other purpose than the funding of the
floating debt. 1t has been CLEARLY
shown that the floating indebtedness.
of the county at the time the bond.
were issued, fell below 500, 600, but
the result is that there was an over ISSUE
OF those bonds and that the amount il
excess OF the floating debt has beer
used to meet current expenses.
This may not affect the validity o
the bonds, but it is warning that il
the future the mistake must not l.,
repeated, for of what use are laws i
they are to be disregarded ard wha
protection is there to the Taxpayers, i
their property can from time to tim
be encountered by large additions t.
the bonded debt.
STATUS OF BONDED INDEBTEDNESS.
Assuming that $40, 300 has been O
will be paid during the current year Of
account of the funded debt, the presen
year will close with an aggregate @
that debt reaching s6i6, 900, probabl
the largest in the history of the county
The loans unpaid on the first G
January last were as follows:
Court House loan, at Az per cent
$50, 800.
Loan for the benefit of the Trustee
Of the Poor, 4, AS and per cent
Sl37, 600.
Loan for Washington Street Bridge
per cent. $4,000
Loan for funding floating debt Nc
! (1SS3) 5 per cent, $50, 600.
Loan for funding floating debt No.
(ls93l per cent, $4,000.
Loan for funding floating debt No.
(lS9Tl 4 per cent, $50,
The total is $3.50, 900. OF this amour
$50, 900 of the Court House loan h;
been paid and a new loan for $50, o.
takes its place, the first $4,000
which will not fall due until 1914.
the above debt will be added Il
loan for the New Castle county worl
house, amounting to 500, 900.
1t is interesting TO dwell momei
on that Court House loan of $50, 80
1t was first authorized in 1879, al
Just why it stands at $50, $40 when Il
not exactly clear. Possibly in son
way or another, 500 worth OF the 10,
was cut off, or possibly the court stay,
within the limit, which II it be tru
may be said to be noteworthy. At a,
rate, after the loan had run for
years, and something like 49,, 600 i
terest had been paid on it. when
matured, the Levy Court actually pm
oil or will pay off the $500 and refun
cd only $50, 900 of it The new loan b
20 years to run, and should it, by sor
chance, be paid off then, the total &C
to the county of the loan will ha
been in the neighborhood of sl6o, OC
Which showing Is marvel of brillia
fnanciering.
The bonds now outstanding. .hnra