Atlanta Georgian. [volume] (Atlanta, Ga.) 1912-1939, 1914-03-24
How Georgia MayWipe OFT All
Outstanding Indebtedness
Director Harris Offers Suggestion Concerning
the Finances of the State and
Its Towns and Cities.
Bv WILLIAM j. HARRIS,
nirector Bureau Ofsthe Census.

ofsthe Census.
be out of place to note that Geor-
gia, in turn, the Empire State Of &
the South" has been paying over z
L per cent more for all money
borrowed than has New York, the
Empire State of the North" thus
adding another half million dol
lars a year to the taxes of the
people Of our State
Now, in view of these few facts
set down hurriedly and in very
general way, l propose to have
compiled as rapidly as possible
all data bearing upon conditions
in Georgia at the present time,
and lay them before the Legisla-
ture at the next session. At the
same time I realize that merely
to point out the unfortunate facts
might do no more than to make
the people who bear the burden
feel unhappy because of the bur
den, unless some plan can be
presented to change this situa-
ton. This I shall attempt to do
and / am confident that a great
change can be speedily made
which will result in wonderful
good
Other States Active.
l find that some other States
have already broken very ad-
vanced ground and have bene-
flied immensely from the expert
ment. For instance, it has come
to my attention that, to use prob
ably the best illustration. Massa-
chusetts has already made won
derful changes in this respect. In
1888 the State committed itself
to the policy of loaning it's credit
to minor civil divisions for max.
ing certain improvements. The
debt assumed on this account is
termed contingent" while that
incurred for State purposes
capitol building. insane and 9TH
er institutions--is termed dis
trict." Over ten years ago the
direct debt of Massachusetts
amounted to S27,OOO,0O0, and the
contingent debt which had been
incurred amounted to about $57,-
100000 The various cities and
towns benefited refunded this
amount to the State by means of
sinking fund assessments levied
by State Boards of Commission
ers, and paid at the same time
and in the same manner as State
taxes, the annual payments being
sufficient to accumulate, at the
maturity of the bonds, a fund
equal to their face value. The an
nual interest charges on these
loans are borne by the munich
palities and are paid in the same
manner as the sinking fund in
stallments. The money raised in
tllAS luCluOu ny the III uIliClpdll-
ties has been used for the build
ing of armories, the establishing
of parks, the building of sewerage
systems, the construction of wa
ter works, etc Indeed, the State
goes farther than this and in the
case of Metropolitan Park, loans
the State assumes one half of the
amounts borrowed, and the bene-
flied civil division assumes one
half, it being believed that the
State is benefited by the estab-
lishment of these park districts.
BY the accumulation of a sink
ing fund in small annual Install
ments the debt itself is gradually
wiped out so that at the maturity
of the bonds no debt exists.
Investing Sinking Fund.
l believe that we have here one
of the greatest opportunities
which can come to us in a life
time, If the State of Georgia,
by a change in her Constitution,
could assume responsibility for
these bonds at the rate of inter
est now current (probably So per
cent on the average), and refund
and resell them at a rate which
the State could command (prob-
ably 3.3 per cent on the average)
the State could in fifty years build
up a sinking fund by the accumu-
latiOn from the interest saved
sufficient to entirely wipe out the
present city and county debt
without receiving any interest on
the sinking fund as il accumu-
lated and If the sinking fund
were properly invested at, say 3
per cent, and the amount COM
pounded, it would be sufficient
in about twenty five years to pay
off the entire debt. In contrast
the people will continue under the
present system to pay the high
rate of interest. and after TWEEN
ty-five or fifty years the debt
will be as great as now If the
State should take over these
debts, provide, as in Massachu