Santa Fe new Mexican. [volume] (Santa Fe, N.M.) 1898-1951, 1899-02-02
REFUNDING SCHEME
Bursum Bill in the Council Is At
tracing Much Attention Among
Bond Holders.
MAJOR R. ]. PALEN'S OPINION
Has Doubts Concerning the Plan and
Thinks the Matter Can Wait Another
Two Years-Reasons for Oh
~jections Given.

The provisions of the Bursum bill are
being generally discussed, and the
measure has a few opponents as well as
many friends. 1t is a proposition which
strikes directly into the root of the
financial tree Of the territory and will
affect many different branches of the
money question that are now being con-
sidered. The matter is being discussed
by the bankers who placed the paper,
and opinions differ as to the ultimate
results of the measure. Some think that
it will be found necessary to repudiate
some of the script and minor bonds that
have worried the territory, and are not
being taken care of, and others believe
that it is only a matter of time before
the territorial bonds must be defaulted
on and that it is better to save the ter
ritory from such disrepute by taking
the bull by the horns, a la Ursus, and
cancel the matters that are practically
~repudiated now and save the general
and more important credit of the terri
tory, counties and municipalities. There
are some outstanding debts which the
people of New Mexico do not recognize
as legal and just and which they will
always fight against paying, believing
that they We're forced into being by
fraud, jobbery and corruption, as for
instance, the so-called militia war;
rants issued in 1857, and now mostly
held in large blocks by a few cold
blooded spectators, who bought them
up at from 5 to 10 cents on the dollar.
The New Mexican believes in a full
and fair discussion of the question Of
refunding the territorial, county and
municipal debts and is securing the
opinion of leading men in the financial
world upon the subject, hence a repre-
sentative of this journal was sent to in
terview Major r. j.. Palen, president of
the First National bank, of this city, on
the subject.
The major has his doubts about the
refunding plan for the present, and
thinks that the matter can afford to
wait at least until another session of
the legislature is called. He said:
While the %refunding plan may be a
good one, I do not think that it will
have any immediate effect whatever, It
Will be more. than three years before
any of the territorial bonds now in ex-
istence can be paid or refunded without
the consent of the holders. I hardly
think that New Mexico enjoys a 4-per-
cent standard of credit as vet. and
doubt if bonds bearing that rate of in
terest a be sold to bring their ACE
value into the treasury. OF course, the
holders of bonds having some years to
run before the territory can exercise
my option toward taking them up, will
not care to surrender S and Z per cent
bonds for a lower rate p without re-
ceiving an equivalent in the way of a
premium. which premium is likely to
be placed on an arithmetical computa-
ton Of the difference in the values of
the two bonds.
THE entire public indebtedness of the
territory, including territorial, county,
municipal and district bonds, Is in the
nature of a lien on the entire property
of the territory. The larger the ratio
of the total debt to the total property
(Which theoretically secures the
amount) the less desirable is the debt
an investment, and it does not make
much difference what particular form
the debt is placed in.
Il think that under existing condi- |
tons in New Mexico, in view of the
fact that only about one-half of the |
taxes now levied are collected, the most
thing for the legislature to
do is to cut down the expenditures to
the minimum and also curtail our pres
ent appropriations to charitable and ed
vocational institutions, for our present |
expenditures in thai direction are in ex- |
cess of our ability to provide the money.
l am decidedly in favor of a generous
provision to those institutions If our
financial condition would permit 1t, but