The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-11-01
SUNDAY. NOVEMBER |. 1903.
THE CITY DEBT.

HE CITY DEBl.
On Janua1yq /. 1904. bonds Of the city Of
Richmond amounting to $G0l. 1875 face value,
ana bearing SIX per cent. interest, Will
fall due, and the Council is trying to de-
te,mine which is the best of several plans
suggested for retiring them. If our sink
ing fund. Which was created not later
than 1867, had been properly husbanded
and allowed to compound. 1T Is estimated
that it would have been quite sufficient,
to retire these bonds and other bonds
OF the city as they fall due from year to
year. City Accountant Mccarthy esti-
mates that in 1895 this fund should have
been s2,2?6,651, which would have reduced
the. city debt to s49oe.0s0; whereas there
were actually in the sinking fund only
$500 of the city of Fredericksburg bonds.
and due bills OF the city of Richmond
amounting to $1,000 These due bills, rep
.esenting that amount of money which
the city had borrowed from the sinking
fund for current expenses. 1t is very
clear from this that the sinking fund was
miserably mlsmanased. but that is an err
ror of the past. and need not here be dis
cussed In 1897 Mr. Mccarthy called at
,ention to the deplorable condition of the
sinking fund, and the Council at once
took steps to provide for the fund accord
ing to law. Since that time the city has
regularly paid into the sinking fund one
per centum per annum. as required by the
mi tn
$4,000. The city is under peculiar obli-
cations to Mr.. Mccarthy for the service
rendered In this connection. If he had
done nothing else for the city during his
term of office. he would not have served
ir vain.
For the retirement of the bonds which
will fall due on January 1st and from
time to time thereafter, two plans are
nov under consideration, the one known
as the Crenshaw plan and the other as
the Mccarthy plan. The fundamental
difference between the two plans is that
Mr.. Crenshaw proposes to use a part OF
the present sinking fund in retiring the
bonds falling due. while Mr.. Mccarthy
proposes to preserve the fund intact. Mr..
Crenshaw proposes an ordinance under
which the Auditor OF the city is in.
structed to issue not exceeding $4,000 of
registered bonds of the city of Richmond,
hearing interest at the rate of four per
ccntum per annum, and maturing thirty
four years after date. He Is further in
structed to sell so much of this issue as
shall, tcgether'%ith the premiums derived
from such sale. aggregate s553,2S3. this
sum being the face value of the six per
cent. bonds maturing January !, 1904 less
quota of sinking fund applicable thereto.
To provide for the redemption of the new
bends thus issued. he proposes that the
sinking fund quota shall commence, and
the frs, payment be made thereon BY the
Auditor January |, 1904, and shall be at
the rate OF ono and a half per centum per
annum, payable semi-Annually in adj
vance for thirty-four years.
Mr.. Crenshaw contends that n part OF
the sinking fund now on hand is appli-
cable to the extingushment of the ma
turing bonds. and he ascertains this quota
10 be sss,45l The bonds maturing between
January ]. 1904, and January !. 1914
amount to s2,932,957.6o. After that tin,
no bonds again mature until 1920. TIL,
Total bonded debt of the city is 81, POT 3S2 60
Mr. Crenshaw shows that under his plal
the debt reduction In eleven years will b.
s39e625. and the sinking fund reductio,
sS2i.S5I.77. But he shows that by accrc
ton the total sinking fund at the end q
that time will be sSS7,15s,3A. lie ais
shows reduction in interest charges b
substituting low-prlced bonds for high
priced bonds Of ss20,3o2.63. or to put 1t /
tsbulated form.
The total reduction in the debt
Is .,.,.s... Observation-Disclosures. 1885,, $50
Tho total amount used ont of
tho sinking fund for redemp-
ton is,.....,...t..,..... ..,...o. s2i.s51
The total saved 10 the city in
interest charge due To lower
Ing the rate of interest and
10 reducing the debt ts......., s20,3o2
The total amount added 10 the
sinking fund In the eleven
Sears Observation-Disclosures, ISL 753
To which add balance Of sink
ing fund on band In 1914 and
not touched OBSERVATION-DISCLOSURES. A7l.T76
Isl ~
Total sinking fund in 1914 ,..s 1859, $50
Mr. Crenshaw adds:
This is true with no calculation of 1
terest earned by the sinking fund.- al
represents only the contributions made
w the future Councils on the basis of pc
oentage on the debt
This plan provides an average annu
Increase of the sinking fund. over what
now put intoh, OF s7523,i7 during the ne
81 eleven Years.
II provides an average annual saving
sTs.67e,sS In interest charge, Reduction
expense to that amount
Il, provides an average annual redncti
of sa6,32a In tie public debt. II pays
# the debt gradually In easy instalments
Il, provides 10 maintain the sinking fu