The Huttig news., 1912-08-31
Cities and Towns Can Secure
Lower Interest Rate by
-'-zsg Issuing Bonds.
GET MORE IMPROVEMENTS
Amendment No. is to Be Voted Upon
September 9 Restricts Amount r
That May Be Borrowed.


favor of the adoption of proposed Con
stitutional Amendment No. Is, which
will be voted upon in the coming gen
eral election on September 8, and
which. If adopted, will give cities and
Incorporated towns of more than 1000
inhabitants, the right to issue bonds
for public improvements.
1t is pointed out that under the
present system of improvement dis
tricts, the city or town is compelled
to pay not less than per cent inter
est upon its time warrants which are
issued to pay for improvements. Cities
which are able to issue bonds, backed
by the credit of the municipality, can
secure all the money they need for
public improvements at and 5 per
cent interest. The difference between
the four or five per cent and eight per
cent in interest, represents many
thousands of dollars annually which
could be expended for public improve
ments in the cities and towns of the
state, If bonds could be issued.
Amendment No. Is guarantees that
this saving will result to the cities
and towns for there Is provision in
the proposed measure which requires
that bonds issued by cities of the first
class shall not bear greater rate OF
interest than five per cent per annum
and that bonds issued by cities OF the
second class and incorporated towns
shall not bear a greater rate of inter
est than six per cent. II is also pro
vided that the bonds can never be
sold at less than par. These two pro
visions preclude any possibility OF q
city of the first class ever paying more
than five per cent for its money put
into public improvements or of city
of the second class or incorporated
town paying more than per cent per
annum.
The situation in which Little Rock
finds itself is given as an example
of the conditions in other cities
throughout the state. Little Rock
owes less money than any city of its
size in the United States. It would be
expected, therefore, that on account
of her small indebtedness. she should
be able to borrow money at the lowest
rate of interest, but Little Rock, in
common with other cities of Arkansas,
is compelled to issue time warrants,
payable in three, four or five years,
and can scarcely place them at bet
ter rate of interest than s per cent per
annum On the other hand the city
of Memphis owes approximately SILL
600 900. spent for public improve
ments. In spite of her large indebted
ness and because of her ability to is
sue bonds and place her affairs on a
business basis, Memphis has been able
to place her bonds at 4, IA, and IL
per cent per annum, as against the
Arkansas cities are forced to pay with
their small Indebtedness.
Amendment No. Is restricts the
amount of bonds that can be issued
to 10 per cent of the assessed valua-
ton of all real and personal property
in the city or town proposing to issue
the bonds. AS the basis of assess
ment is about 80 per cent of the real
value of the property, the actual
amount of bonds that could be issued
by any city or town would be about
5 per cent of its property value.
The amendment also provides that
the special tax to provide for the pay
ment of the bonds and interest shall
not exceed five mills on the dollar,
in addition to the rate Of taxation now
authorized.
The adoption of Amendment No. Is
will not affect at all the taxes of any
one outside the cities and towns.
The executive committee in charge
of the campaign for Amendment No,
Is declares that the object desired
cannot be reached by improvement
districts.
The method of organizing improve
ment districts is so cumbersome that
there can never be enough of them to
accomplish the end desired" the COM
mittee says in a statement which 1t
has issued.
Moreover, under that system, all
the cost is thrown on the owners of
real property This is unjust, so much
so that frequently these owners re
fuse to assume the burden. Why
should the property owners of today
be forced to pay all the cost of i'm
provements which are to be enjoyed
by generations to come? Why should
not an arrangement be reached, as pro
vided in proposed Amendment No. 10,
so that all those who enjoy the benefits
of the improvements shall pay their
proportionate part of the cost thereof?
1t is not right, it is not equitable, it is
not Just that the citizens OF today
should pay all the cost of the improve
ments which are to be enjoyed long
after they shall have passed away.
Arkansas is making more rapid
progress, edueationally, than any