Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1914-06-05
Interest Charges Amounting to $IO,365, 1853
Have Accrued Since Admission of
WASHINGTON as a State
DISCOUNTING OF WARRANTS A LEADING FACTOR
Public School Management Adds Drag to Re-
venues. Interest Burden Would Duplicate
Proposed Capital Buildings.

The debt accululating habit has
been expensive to the state. In the
case Of the state general and the pub
lie school funds alone, it has cost in
total interest charges enough to pro-
vide for duplication Of the group Of
state capitol buildings now planned.
1t is equal in amount to the total ex.
penditures during statehood on all the
institutions Of higher education. and
represents nearly $50 per capita on
the basis of the population existing
when the development of the habit
began.
This persistent mortgaging Of pub.
lie credit in the case Of the state gov
ernment and public school system,
where the business of both should be
conducted on an estimate and taxa
ton basis, has added in % years to
the ordinary burdens of the taxpayers
the incredible sum of $10,365, ,158.
Could the county and municipal inter-
est payments for the like period be
exhumed or distangled from the jum-
bled accounts of public financial af-
fairs, the total sum of taxes paid dur.
ing the statehood for interest on the
debt incurring habit promoted by pub
lie officials would aggregate an as
founding figure. p,
Early in the history Of the state
official warning against the accumu-
lation of interest-paying debts was
sounded. 1t was shown that interest
charges as a cumulative burden were
not sufficiently considered. During
the four years of primitive statehood
the state government bond and war
rant debt interest redeemed was $780,
591, with an outstanding interest debt
of $6O,892 on October 81, 1894.
State Warrants Discounted at That
Time.
State warrants at this time were
discounted and 10 per cent, though
they called for per cent interest.
The executive recommendation for
the passage of law providing for the
redemption of state warrants from
the idle cash balances in the perma-
nent school fund-thus earning for the
public schools the premiums on cur
rent state securities that were absorb
ed in large sums by the banks hold
ing the permanent school funds
was not finally carried into effect un-
til four years later the legislature
passed q permanent school bond act
In compliance with the technical re-
quirements of the constitution. In
the periods of overdraft against the
general fund the law enabled the
state treasurer to issue to the per-
manent school fund, in lieu Of tenn.
porary transference of cash for the
current use of government, general
fund bonds in denominations Of $4,000
each drawing 3h per cent interest,
and redeemable at option when the
general fund revenues justified. The
effect on the general fund credit was
electrical. Its warrants have never
passed into brokerage since.
Governor McGraw, himself banker
was the first and only executive Of
the state to compel attention on the
part of the lawmaking body to the
subtle subtraction Of public debt in.
terest from general or current fund
revenues. Omission of interest &C.
count from the estimates and status
of public debt is a frequent oversight
Of computation and leads to accumu.
lated debt. Following the second and
more strenuous warning Of the state
tax commissioner of 1907, the bureau
of inspection has Influenced many
public oflicials having to do with the
finances Of state, county and city gov.
ernment, to anticipate interest pay
ments in the annual levies, and In
the same manner attempt the eradi-
cation of the outstanding warrant
evil. OF later years the legislature
has been making appropriations for
interest payments.
Huge Sum Paid on General Fund
Overdrafts.
II was revealed by the tax commits
sion report Of 1906-and this was the
first tax commission in the United
States to clarity the subject Of debt.
fund and interest problems in their
relation to taxation-that during the
life Of the state. then 16 years old. the
taxpayers had been nulcted in the
sum Of $l.lSe,36 IN interest on gener-
u fund overdraft debts that would