The San Francisco call., 1903-09-08
PUBLIC UTILITY BONDS.

Nm municipal socialism its merits by making
all bonds issued for public utilities a lien
only upon the plant itself and not upon the taxpay
ers The principle which requires this is so plain and
proper that it cannot be successfully antagonized.
American cities are being urged into municipal
ownership because cities in the British Isles have
very generally embarked in it. calling it there mu-
nicipal trading" The cities in England, Ireland and
Scotland which have gone into business have raised
the capital for commercial investment by general tax
ation the bonds and stocks issued being lien upon
the city and upon the plants The effect has been
an enormous increase in municipal debts. The
nua reports OF the local government board show that
the debts of the cities have increased between 1901
and 1902 by 2oI per The annual average of in
crease has been $I25oooooo, and in 1902 jumped to
SI44677,465.
In the period of 1s74-1s99 the debts of Eng
lish cities increased from $465, 900, 900 to
81, 1,47oy 600, 900, the increase of more than one
billion dollars being due to borrowing money for
investment in public utilities to be paid by the
taxpayers. The debts of such cities incurred for
public utilities amount to $50 per capita
of their inha bitants. The Chamber of Commerce
of London, investigating the stagnating effects
of this vast debt incurred for business invest
ments, found that sixty-one municipalities, in
cluding Glasgow, were conducting either all or
most of the public plants at loss, the deficit be-
ing made up by extorting from the taxpayer.
These facts should warn all municipal taxpayers
against permitting the bonds for any kind OF business
investment to be lien the municipality. If the
business can be at profit or if it can pay the
cost OF starting it. and OF its operation, let 1t do so
and bear the burden OF its own securities.
The Examiner favors municipal ownership of the
Geary-street Railroad In attempting to discuss the
question it says, in answer to The Calls demand
that the bonds shall be paid by the plant and not by
the people: If that argument were to have weight
the city government would have to go out OF busi-
ness Push the question little further and we
should be asked, why should the people of the
Western Addition be taxed to pay for the paving OF
Kearny street? Why should the people OF North
Beach be taxed for building the Mission High SCHOOL,
Why should the Richmond District be taxed to pay
the repairs the City Ha? Now all OF that looks
very smart. but it isn't Streets are paved by tax
on the abutting property. The building OF school
houses is reciprocal When one part Of the city is
taxed with the whole city to build school
house in certain district that district is in turn
taxed to build schools for the other districts which
have contributed to it. But unless the Geary street
Railroad can be made a movable feast, and carried
around the city for the convenience of all the tax
payers the statement remains true that all the rest
Of the taxpayers are to be burdened to create a
utility which they cannot
The Examiners ignorance of the subject is
shown in this further statement: In the Of the
Geary-street Railroad, however, the people of the
Mission Potrero, North Beach and the other dis
tricts not asked to pay anything in taxes They
are asked to acquire a valuable piece OF property
without the expenditure of any of their money.
The money would be furnished by the bond buyers
and the interest and principal would be paid Of
the earnings of the road" Now if that were true,
which it is not, the thing we are contending for
would be already present and the bonds would be a
lien on the plant alone and not the city.
The people will read on the ballots for those
bonds that they are voting on "a proposition to
acquire by original construction and completion
by the city and county of San Francisco public
utility, to wit: street railroad, and TO INCUR
A BONDED DEBT OF THE CITY AND COUNTY
TO THE AMOUNT OF $71o,ooo."
That language is plain. It is a debt of the
city and county, and not of the Gearystreet Rail
road, and has to be paid by all the taxpayers,
whether they are served by the road or not
The Examiner says the present Geary-street road,
owned and by a corporation, is paying bust
ness and the city's road will pay better. 1t de-
cares that the present road pays per cent interest
on S67Iooo III bonds, and dividends OF 21z per cent
on 81 600 900 in stock This amounts to $585oo per
year, a sum greater than the interest and sinking
fund of the bonds that are to be made lien the
city instead of on the road. If the Examiner is so
certain that the city will be a great in the
railroad business, why not show that confidence by
taking these bonds off the backs Of the taxpayers and
putting them on the road? To refuse this is to doubt
that the city can run road successfully the
present corporation