Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1913-09-21
The Idle Sinking Fund

A matter which will likely receive the attention
of the present board Of university ana school Janus
is the question OF doing away. in Il measure, w'si the
present custom. of building up large funds through
special taxes for the purposes Of retiring the Oonaeo
indebtedness of cities. towns. school districts, couh'
ties, etc. "a g.. 80 5|
49,. At the present time. when bonds are issued 1t
becomes necessary for the city, township, county OF
school district bonding, to levy each year a special
tax. the proceeds of which cannot be used, but must
he. allowed to accumulate as O Sinking fund which
fnpd shall only be used to retire the bonded indeDt.
edness when due. m
Laws of North Dakota now provide that bonds'
must be issued in certain denominations. For IN
stance, II a county were bonding for $eOOW to pro-
vide funds for the building of a new court mousse oo
bonds of 81, 1000 each must be issued. One Dond 1ot
$4,000 could not be issued. Immediately Inns amou0'
of bonds are issued this county must each year te"s
a special tax, the proceeds of which amusthe aho"eu
to accumulate in a fund known as a Sinking fund"
to pay bonds. 49, F FE =
1t lis customary for bonds to be made to run a
period of 20 years, some run as low as 10, and some
for Is years,,but the usual time is 20 years. If 81
bonds of 81, 600 each were issued for 20 years the
custom now is to have them all come due on the
sane date, 20 years from the date of issuance. IL
Is this idle Sinking fund" which the board of unlEer-
sity and school lands feels should be abolished. +, j
To accomplish this, members of the board contend
that a school district, for instance, when bonding lor
20 years should have a certain amount OF the BOND
issue come due in the eleventh year, Q certain
amount in the twelfth year, q certain amount III tho
thirteenth year, and SO on until the entire indebted
ness has been paid. In this way, after the 1enth
year, a special tax, called Redemption of Bonds
Fund" would be levied, and instead. of holding this
money in a fund which could not be used and allow
ing the bonds to continue drawing interest, the inter
est on the bond or bonds coming due in this year
could be stopped, the bond or bonds could be paid;
and the bonded indebtedness of the district reduced
in the exact amount of the bond or bonds paid. se
Under the present system sinking funds are not
always provided; the bonded Indebtedness of the dis
trict remains, at the full amount up to the due date
of the bonds, although there may be funds In the
sinking fund" in q pinch" could be used for Other
purposes, and it is not unreasonable that the tax
payer demand that the rlneney paid he used for the
purpose intended Immediately, instead Of a number
OF years in the future, as now. is the custom. &
This idea, the board has of doing away as much
as possible with the Sinking fund" seems to be q
good one, and IT is to be hoped the board Of sRniver-
sity and school; lands will s5see t5toMadToeate the
issuance of bonds in this manner, 50 the rnany bond
issuing subdivisions Of our state government may
receive the benefits which sase certain ito follow the
issuance of bonds under different due dates. We
progress. - ~- - --