Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-01-30
Debt and Municipal Health.

If Congress Is determined merely to make
Washington unique among American cities
It can accomplish that purpose with abso-
lutte certainty by adopting the cash payment
policy with regard to the great permanent
works now planned for the capital. If. on
the other hand, 1t wants to make Wash
ington distinguished among the cities, 1t
can do no better than to adopt the opposite
policy of paying for these works on long
term basis. For 1t Is the rule almost with
out exception for cities to pay for their
large works In this manner. and to force
Washington to do otherwise would be to
establish It upon a pinnacle Of conspicuous
isolation a warning to others Of the disas-
trous effects Of municipal financing on I'M
business-like principles.
Washington can be made uniquely beau
tiful without being made at the same time
uniquely poor In pocket and straitened In
resources. The world has long ago moved
ahead of the notion that debt of any kind
Is disgraceful. Debt without prospect Of
repayment, debt incurred without the inten-
ton to repay, debt incurred for foolish OBJ
jects or for the qualification Of extravagant
tastes, debt which means living beyond the
income, this kind Of debt Is disgraceful.
But debt which means enterprise and prog
ress, the grasping Of present opportunities,
the meeting of future needs. debt guaran-
teed cancellation out OF assured revenues,
debt which Is devised as a means Of per-
mitting the sharing Of the burden OF the
cost Of great permanent works between the
revenue producers OF the present and those
Of the future who will most greatly enjoy
the products-this kind of debt means prog
ress and equity and financial health. It Is
indeed no debt at all. but an adjustment OF
cost to income. 1t Is the most economical
method of meeting extraordinary necessi-
ties.
When business establishment finds Its
trade growing beyond its facilities, with
every prospect of continued and increasing
prosperity, 1t naturally seeks expansion
It has not sufficient surplus funds In hand
to buy the land and construct the extra
facilities required by the state Of It's trade.
Does 1t hoard Its extra earnings for half
dozen years in order to pay spot cash for
its new works when they shall be built1
No, that would be to lose the benefit and
profit Of the trade increase during those
years Of saving. Does 1t cut down expenses,
lower wages and raise prices for few sea-
sons in order to make the period of waiting
shorter? No, for that would lower the eff
cheney Of the establishment. weaken its or
ganization. diminish Its market and SO
threaten Its prosperity. Or does 1t go Into
debt" for the necessary means by borrow
ing enough at interest to enable 1t to build
at once and so reap the fruits OF an I'M
mediate meeting Of the trade demands?
Such a course yields a maximum of profit,
distributes the cost Of the betterment over
a period of years and places the burden OF
repayment In some part upon those owners
or stockholders who may succeed the pres
ent ones, and who are to be most greatly
benefited by the expansion.
What Is true Of the business house Is true
In even greater degree Of the municipality.
Here the necessity Of expansion is chiefly
represented by the current budget in
creases, provision for which must be made
from year to year else the community is
cramped and its health Is affected. its vital
ity lowered. This necessity cannot be put
aside by a mere decision to postpone pro-
vision for current increases for few sea-
sons Eventually the needs must be all
made good. But whether the budgets grow
year by year or not, justice demands that
the sudden extraordinary demands for great
permanent works be met. not by current
taxation. but by distribution Of the sur
plus taxation through course Of years.
And In providing thus by means Of a
debt" representing borrowed money on
which interest is paid. there should be no
Indebtedness. The borrowing should be
for a definite sum for definite period. Else
the problem recurs and the taxpayer Is kept
from year to year in uncertainty as to the
probable demands upon him. Debt stands
for growth and health and prosperity when
It Is incurred in distinct terms for proper
purposes, and II founded upon an assured
ability to repay. That Is the kind of debt
which the District has practically incurred.
and which 1t now asks to be permitted to
pay In a manner which will be most equita-
BILE and least burdensome to the commu-
nifty.
A French economist who in 1897 bet that
by 1902 a kilogram of gold would be worth
16 Kilograms of silver the world over has