Daily capital journal. (Salem, Oregon) 1903-1919, 1914-01-07

A
Indebtedness upon which the taxpayer
of the city are paying interest, to az
proximately l01a per cent of the tota
assessed valuation within the corporal
limits of the city as indicated by tn
1912 state and county assessment.
For street improvement projects nov
, or nearly completed and one under con
tract for completion in 1914, Bancroft
act bonds will probably be issued t,
the extent of not less than $75,0OO.Ol
which will increase these percentage
and totals materially.
These facts, gentlemen, are serious
warning to you that you must scruti
nize all Improvement projects involv
ing the issuance of bonds to raise large
sums of money quickly, with painstak
ing care and that no further indebted
ness should be incurred against the
city unless the same is of the most
urgent character for the protection OF
public health, and in order to bring
this more forcibly before you l wish
to treat somewhat of the history of our
municipal Indebtedness which is a di.
rect obligation of the city outside of
the present sewer bonds which every.
one ought to understand.
Authorized in 1894.
The firt bonds mentioned above are
the $6O,OOO.OO per cent funding
bonds. These bonds were authorized
January l, 1894, by Ordinance No. 2ss
and were issued for period of twen-
ty years and are now matured and a re-
funding issue bearing per cent inter
est for straight period of twenty
years in an equal amount has been au-
thorized within the last thirty (3O)
days by the council, and have been
sold at a premium of $1,24S.O0. The
proceedings touching these bonds and
are now under examination and the
bonds will in all probability be deliv-
cred during the next thirty (3O) days.
You will note that this indebtedness
has never been refunded by the city
heretofore and is based directly upon
$6O,OOO.0O of city indebtedness in the
form of warrants outstanding, January
l, 1894, part of this $6O,OOO0O indebt.
edness is due, the records of the city
disclose, to failure of the city assess.
ment law of 1898, thereby leaving the
city without revenue from direct taxa.
tion on city assessments, and the bal.
ance seems to have been in the form of
warrants outstanding issued to meet
bridge and sewer construction and run.
ming expenses of the city.
The purpose of the outgoing council
in passing an ordinance refunding this
issue on a straight twenty (20) year
basis was to enable the city to meet
the next 100000 issue maturing April,
1914, on serial basis and at the same
time take care Of them with the sewer
bonds so that there might be no need
of refunding for long period without
redemption privilege, as in the case of
the 100000 just mentioned. 1t is my
firm conviction that the operating ex-
penses of the city should be met from
year to year and that it should be un-
necessary to fund or refund indebted.
ness of the city which is purely in the
nature of running expenses. So far
as investment projects are concerned
in which the city may find it expedient
to engage, have no serious objections,
provided the bonded indebtedness is
based upon sound retiring sinking
fund basis or serial payment basis to
be paid for out Of annual taxation if
the investment is not a productive one
as in the case of our sewer bond Issue
just made.
l am very much opposed to handling
the remaining portion of our general
obligation bonds on any other than
basis that will retire the same as ]
have just indicated. With this in view
J. will proceed to briefly outline the
nature Of the remaining portion Of our
general obligation bonod indebtedness.
The next bonds maturing April /,
1914, are what is known as municipal
4 per cent refunding bridge bonds and
were issued to refund 100000 Of in.
debtedness incurred originally for the
construction Of the bridge across the
Willamette river and represent a por.
tion Of the cost Of the original wooden
bridge. These bonds were based upon
the indebtedness incurred in October,
1856, for the construction of the wood,
en- bridge as indicated. The original
issue was made at per cent on a pop.
uar loan plan for a period Of fifteen
(l5) years AT maturity in October,
1901, local banker protected the city
credit by carrying the bonds until the
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