Daily capital journal. (Salem, Oregon) 1903-1919, 1912-11-04
Objects
to Issuing
of Bonds
STATE TREASURER KAY DISCUSS.
RS THE BONDING SYSTEM AND
ADVISES OREGON TO AVOID 1T
AND STAY on CASH BASIS.

In an interview pertaining to the
states financial condition State Treas
urer Kay very positively outlines his
nosition regarding measures that call
for the Issuance Of state bonds. He
believes that It would be very poor
policy for the state to depart from the
position It has held for so many years,
of not being burdened with a large
debt. upon which It would be called To
pay interest,
Mr.. Kay stated that what appeared
to him to be the worst feature of what
are called the Harmony Road Bills
Is the issuance Of bonds by the state,
for by their passage and the state TAX
ing this method Of procedure would
most certainly result in the state be-
ing called upon to extend its credit to
promote other enterprises that might
be initiated. and being deemed merito-
rious. would, in addition to the mil
lions provided by this bill, call for the
issuance Of more and more bonds, UNI
III. instead Of standing as It does now,
without any Indebtedness, there would
be millions upon millions Of bonds is
sued calling for large annual interest
payments.
Would Add to Burdens.
Bonding the state said the treas
urer. would be simply adding to the
one to FIVE membranes now upon all
property subject to taxation in the
state. Nearly every piece Of property
now in the state has a lien upon It
through bonds and Indebtedness Of
school districts; in addition to that
nearly every municipal incorporation
has a bonded Indebtedness; also q
large part of the property lying within
said ramifications is additionally bond
ed for streets and sewers and IL would
be unjust and unfair still further to
cucumber property with issuance Of
state bonds, that if once commenced
would never end until the credit Of
the state. city and school districts
would be impaired. 1t might also re-
suit in the bonding of the entire state
for what might be projects only Of Sec
tional benefit, for many things might
be proposed, that by reason Of loca-
ton near the center of population
while only Of local. interest or benefit,
could be passed by the votes of those
living tributary to the undertaking"
Other States Compared.
Mr.. Kay states that his view upon
this question have been greatly
strengthened by the facts ascertained
in the compilation Of his biennial re-
pert, while comparing the condition
Of this state with the facts as present
ed by reports from other states for it
would appear from such reports that
in nearly every state where state
bonds are outstanding or a state in
d%ebtedness exists, attention is called
to the necessity Of action being taken
to meet obligations for interest, bonds
becoming due and to avoid further in
d~ebtedness until increased revenue
can be legislated for and obtained"
1T would also be good business pol
icy" the treasurer says, and only
justice to the generations to come to
refrain from placing additional obliga-
lions upon the citizenship Of the flu
ture and that the state continue in its
policy of paying expenses as incurred
for state purposes. Many projects
that now appear to us to be not only
of great worth now but also Of great
benefit to future generations, may long
before payment time, be Of no value.
but for which they will have to pay
or pass It along to another generation.
Must Keep Up Barrier.
1T would be best therefore, to pass
no measure, however m]eritorious it
may seem, that would throw down the
constitutional barrier that has kept
the state Of oregon in the list Of those
states opposed to discounting the m-
ture for enterprises Of the present day.
III the state a]ppropriates S5OO,OOO
n year for 20 years and puts in good
roads, It will have S~1O.OOO,0OO worth
OF good roads built with no interest to
ray and no debt, while, on the other
hand, If the state issues 100000 OO
worth Of bonds and puts in good roads
It will then have slO,OOO,OOO worth Of
good roads with 100000 annual inter
est to pay and will still be in debt $1O,-
OOG, 900. Which is best?