The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-11-01

i requirements OF the ponuss ieauou ~ 80
this year. according to the schaft or Oh no
clfv viz: one per cent. per annlln.
III provides 4 sinking fund for the new
! bonds that vii, absolutely pay the bonds
when they fall due
n nroyidcs. after 1914. for an annual
saving In interest Of $9s,157.11. until 1890.
! and after that, should the Council sec TT
| to renew ali of the bonds maturing, a.
still greater saving Will be realized N
/ won come to the Mccarthy plan.
As already stated. tho sinking fund now
amounts TO $4,000, and is increasing, be-
| sides interest, at the rate Of $4,000 per
annum. the total increase being about
$4,000 per annun, Mr.. Mccarthy pro-
POSES to Increase the sinking fund Quota
to one and one-auarter per cent per an
nun. which would yield 10000 per anntim.
He contends that the $500 900 now on hand
onght to remain intact and grow by &C
cretion of compound interest until the
year 1920, and he asserts that II this fnnd
ie preserved from reduction. diversion or
dissipation! and the city continues to con-
tribute the annual quota for redemption
already suggested. in the meantime re-
funding ali tho bonds which mature be-
tween now and 1914, the city will be able.
on and after January j. 1920, to hand to
every bondholder on the maturity OF his
bonds, check for his money
AS already stated. from 1914 until 1920
there are no maturities. and any fund
which the city accumulates between now
and 1914 will have SIX years OF growth
without any calls upon it for redemption
He asserts that actual calculations, based
upon actuaries' tables and four per cent.
investments. demonstrate that when the
first matlsrities Of 1890 are presented
for payment the commissioners Will be
able to settle them by check. and con-
tlnue to do so until the last bonds, matur-
ing in 1880. are wiped out. III
And he adds:
The bonds which, we issue between this
date and 1914 for refunding purposes, hav-
Ing thlrty-four years to run. will begin to
| mature in 1885, and will mature at inter-,
walls for fourteen years longer; but the
plan we hope to inaugurate, which pro-,
| vides for all maturitles from now until
| 1920, will also provide for tho payment
OF the maturities from 1890 until 1890, and
| will be ready and able'to take care OF the
redemption of the proposed issues between
now and 1914 as they mature. The calcu-
llations, with the aid of tables are simple
and reliable. and cannot be questioned.
| II the plan now in contemplation Is adopt
| ed and adhered to. the payment OF our
debt as 1t natures Is absolutely provided
for. redemption will commence In 1920 and
continue regularly and completely until
| 1890 when the present debt would be an
Initiated, and the city able to issue mil
lions for improvements, or. II 1t has cho-
sen to do so, will have issued, in lieu OF
bonds redeemed. and will have used In
great improvements. millions correspond
| Ing to the amount of the redemptions that
have been made. And in addition to this,
| the sinking fund will be able to buy every
| bond (of the new issues not, Of course.
the refunding Issues as the city issues
! them. within the legal limit. and so can
| hold up the market to any fair and rea-
sonable price.
His tabulated statement is as follows:
On hand In sinking fund
| January 1, 1901. $4,000
Interest at four per cent.
compounded for eleven
| years Observation-Disclosures. 4Sl,20O
-- s1,2al, 200
$4,000 annual sinking fund ac-
erection for eleven years at four
| per cent. compound INTEREST,". ], 262, $40
Offset to debt at end Of eleven
years ........................... y, $3.50
BY the same calculation, based. on three
and a half per cent instead OF four per
cent. interest, he shows that the total Off
set would be 1882 $50 in eleven years. He
further shows that by 1920 the total Offset
would be in round numbers s35O0.00O.
which is about half the debt and that
rrder his plan the sinking fund will con-
tinue to pay the debt as 1t natures.
Such is a simple. II not altogether sat
isfactory, statement of the two plans.
We have not undertaken to verify the fig
urcs but each gentleman claims that his
calculations are accurate. The City At
torney has advised the Council that "the
charter requires, as to the bonds which
mature January /. 1904. whether they are
a part of what is called in section 6s the
i present existing debt of the city. or a
part of the. debt which was contracted
i after July IL. 1870. that such part of the
Irresent sinking fund which arose from OF
Twas created by reason of the setting apart
OF the annual appropriations to thai
4 fund from the city's revenues on account
4 of the debt which natures January !
fl,lsot. must be applied to the paymen
OF said debt which falls due at that date.
The City Attorney contends. on TIL,
other hand, not only that the charte
does not require this, but that 1t woult
be illegal for the Council tousc any par
of the present sinking fund TO meet tn
maturities of January l, 1904. That i
a question of construction which we shall
not presume TO decide. But it does seen
10 us that, If it may be legally done.
. would be wise and prudent to allow II,
. present sinking fund to remain intact an
TO. create new sinking fund from tim
, to time for the new bonds that shall
. issued to retire the old, adding the accre
II ton from yearsto year to our NEST egg.