Daily capital journal. (Salem, Oregon) 1903-1919, 1913-04-10
BONDS ARE LEGAL BUT
MAY Be UNDESIRABLE
This Is the Opinion of the Bos-
ton Attorneys Concerning
the City Sewer Bonds.
CITY ABLE TO PAY THEM
City Attorney Page Kindly Permits
This information to Reach
His Employers.
CITY ABLE TO PAY THEM

City Attorney Page has not only
heard from the transcript proceedings
in the sewer bond matter, but has kind
ly consented to let the people who pay
his salary know that fact. Something
rather unusual on the part Of certain
officials, and therefore the more com,
mendable on Mr.. Pages 8 part. The tel.
egram to the city attorney is as fol-
lows:
"Boston, Mass, April s, 1913.
"Eollin K. Page, City Attorney,
"Salem, Oregon.
"Ihink council should, after award,
Tatify the sale by an ordinance. Please
substitute the word payable for the
word 'redeemable' in the tenth line,
first paragraph of the notice of sale.
Papers otherwise satisfactory. Regard
ing legality of bonds, we doubt the ex.
istence of any authority to levy tax
for these bonds beyond the ten.mill lin
it of the charter, section 6, clause g. AL.
though the bond ordinance was enacted
by the initiative, it is only an ordi.
nance, not a charter amendment. This
question does not affect the legality of
the bonds, but concerns the ability to
pay. Unless you can remove this doubt,
our opinion will draw attention to the
tax limit
"StOrey, Thorndike, Palmer,
& Dodge"
II will be seen from this that these
attorneys consider the bond issue legal.
At the same time they point out that
with the tax limit fixed at ten mills,
the ability of the city to pay may be
questioned, and that as attorneys they
will call the attention Of bond buyers
to that fact. The city attorney in a
rather lengthy and erudite opinion, en-
dorses the statement Of the Boston at.
torneys.
It is suggested that this matter of
the tax limit can only be Strengthened
out by an amendment to the charter
raising the tax limit which is now ten
mills. Unless this is done, the matter
stands that the bond issue will be legal,
but the bonds more or less undesirable.
There is no doubt about Salem 8 abil.
6ty to pay, to meet any bonds she may
issue, and while the matter is not seri.
GUS from our standpoint, it certainly
will be made so from that Of the bond
buyers, and the bonds in consequence
will probably not sell at par, How
much the bond buyers will cinch us re.
mains to be seen, but they are general.
ly certain to make themselves reasona-
bly, safe, and then some. The morning
paper is authority for the statement
that "the bonds will be Immediately
offered for SALE" The Capital Journal
sincerely hopes in the interest Of the
long suffering people who have paid
for their sewers, that the matter may
be finally and satisfactorily settled, but
IL must confess to not being over opti'
mistic. When attorneys say "bonds
are legal but probably undesirable" "
there is not going to be a rush to buy
that will compel the sellers to call for
police protection, and hence It is feared
hat the bonds will be discounted SO
heavily as to make their sale "unde.
olrable" by the city. Time alone will
show this, and until that time, 1--WE live
n hopes"
il might be added in all fairness that
if the bond holders will examine into
the city's ability to pay, and be gov
crned by that, that the bonds will eas.
lily sell at par. The city can raise un-
der the 1O.mill limit 100000 a year.
The first payment on the bonds with
interest would be about $3S,5OO. This
would leave the city 1880, which
would meet all running expenses. The
bonds are legal and the city able to
meet all payments on them. The only
trouble is the little bubble raised
81 which may be ground for the bond buy
Z ers cutting prices.