The Birmingham age-herald., 1908-05-31
BUSH O|SAPPROvES
 GREAT BOND ISSUE Goes Into the Recent Action of
 North Birmingham MEANS MUCH FOR FUTURE Proposed Action Would Make Greater Brmlngham's Indebtedness Almost
 as Large as the Whole
 State of Alabama.
MEANS MUCH FOR FUTURE


 into Greater Birmingham, l have been led to investigate, to some extent, the question, and particularly that looking to the issuing of $5OO0,O00 bonds by North Birmingham for municipal waterworks and light plant. It appears that there Was some understanding that during the time pending between the election to bring these different municipalities into Greater Birmingham, they would be at liberty to make financial provision, by bonds or otherwise, for ordinary improve ments, such as school houses, sewers, etc., If they should so elect. It Is also under stood that the present laws governing municipalities provide that all bonds should be sold at par. Inasmuch as it | is understood that the obligations, or bonded indebtedness of these municipali- ties shall become the indebtedness of Greater Birmingham the subject is a mat ter of interest to every citizen who will reside in the greater city. If these diff ferent municipalities issue bonds for im- provements, as indicated and comply with the laws with reference to the price at which they are to be sold, no one has a
 
 as probably to many others, that the sale of these bonds at a large discount and construing this discount as con- mission-woud be an evasion of the law and would make the bonds illegal.
 The question of issuing $5,OO0OO0 bonds by North Birmingham for waterworks and light plant is a very different mat ter, and is certainly not in line with ordi- nary city Improvements The citizens, or municipality of North Birmingham, l think understand fully that the bonded Indebtedness which they might legally create will become the indebtedness ot Greater Birmingham; and to undertake on their own account to create an in- debtedness in this form of $5,000,OO0 ap- pears to me to be most extraordinary and unwarranted It IS difficult for me to believe that the North Birmingham friends are serious in this proposition, and are undertaking, without conferring with or getting the consent of other munich paJties which are expected to enter into the greater city, to impose upon them this enormous indebtedness. While North Bir- ! mingham is undertaking in this way to
 
 approval, we naturally look to see what part of Greater Birmingham North Bir- ningham will represent. 1 believe that u is estimated that Greater Birmingham Will have a population of 10000. North Birmingham, 1 understand, has d popula. tion of about 6O00-or one-twentieth of 1 the whole. l also note that Tn the recent election upon the question of forming Greater Birmingham, North Birmingham cast 122 votes in favor of coming into the greater city and 127 against-showing Q total vote of 24y, as against votes cast by other municipalities of about 5000 showing about the same proportion of votes cast as to proportion of populat tion Is 1t not strange and remarkable, then, that this small coterie of citizens should undertake an enterprise of this kind. which they know would not, under any circumstances, be undertaken by North Birmingham alone, and for which North Birmingham could not pos ply market the proposed amount of bon.a?
 l have looked over the prospectus of the proposed water and light Splant as published by MT. T. H. Friel, formerly the mayor of North Birmingham He dz- ures out, with much ease, as to what the various items of cost will be in connec- tion with this undertaking, including con struction of dam, mains for conveying the water, reservoir for holding given quantity of water cost of 10000 acres of land covering the watershed, clearing 10000 acres of land, cost of pumps and machinery for Altering, etc.; also cost for laying pipes and erecting wires and poles for the purpose of supplying with water and light Greater Birmingham. MT. Friels estimate may or may not be correct, but if so he has figured with more accuracy than any one else ever has on the cost of such improvements. All we have to do is to consider the es- inmates made by the most experienced engineers in the employ of the gov- ernment, as well as noted civil engineers, as to the estimated cost of the Panama canal and other public works; and it is now shown that the cost of canal will be more than double what was first est- mated Again. Mir Friel states that this work will require about two years in which to complete it. He would be far more accurate If he would say at least four years But assuming that he is al- together correct as to the cost and time for construction. which no experienced man would admit as correct, when he shall have finished this plant he will have made the indebtedness of Greater Bir- mingham $7.324O00, including present in- debtedness of the city of Birmingham. to say nothing of the indebtedness of other municipalities, which are estimated about $500. 900, which will also become the in- ! debtedness of Greater Birmingham. This bonded indebtedness will be nearly as great as the bonded debt of the state < of Alabama. It is not reasonable to sup 1 pose that these bonds. in legal form and ! approved by the people of Greater Bir-
 mingham could be sold at par bearing l less interest than 5 per cent. and prob l ably not at that so that the interest on this new issue of bonds would be i s25O,O00 per annum. large part of this l interest would have to be paid while the 1 work Is under construction. with no rev. l enue coming from the improvements. And
 when the work is completed, what cer- l tainty is there that the net revenue will 1 pay the interest on the bonds? If the | city should have absolute control of the i water and light supply of Birmingham ! they might assess a rate that would give 1 the desired income, but MT. Friel seems i to lose sight of the fact that there are | large and strong water and light com | panies already performing this service, ] which companies. of course will have to | be reckoned with. That is to say, 1t is 1 not at all probable that either would go l out of the business. but the probability Is
 that with competition there would be | such a temporary reduction in rates as to | show very little net earnings for either. 1 One only has to refer to the history Of l Mobile on the water question to know | that this statement is not idle prophecy. | It Is a well-lxnown fact that the ques- | ton of additional water supply particu- | Iarlv for industrial purposes, Is serious