The commercial. (Union City, Tenn.) 190?-193?, 1915-04-30
Public improvements.

are depressed and money is scarce,
and that is the reason, we presume,
that the Board of Mayor and Alder
men, or those of them who favored
the building of a city hall, stirred
I'D a good deal of comment. Usual
ly a time like this is the most OPP
perfume for investment, but in
public way we are not sure that this
line of reason holds good. True,
probably, if the city had the cash,
where she could take advantage OF
the low building material markets
But to enter the market for S-per
cent money with which to make con-
tracts reduces the purchasing power
in a very large measure. Therefore
we feel like those who preferred to
substitute a bond issue for the pro-
posed plan recently adopted by the
Board. There are other things
which make the borrowing plan
look somewhat unattractive, and
among these is the fact that tax col
lections are considerably behind this
year. So, it may be reckoned, that
payments on the sidewalks will al
so be somewhat slow. This, Of
course, should not affect two and
four-year loans, but, as stated, 1t is
hard to create feeling of optimism
at time like this.
Therefore to secure public build
ing with the proceeds of bond is
sue looks little more practical and
feasible. But it is suggested, and
we are not convinced that the sug-
gestion is a bad one, that while we
are at it, we might raise the issue
to, say $4,000, $4,000 for a city
hall building and 100000 for the
extension of streets and sewerage.
We are advised that the revenues
from the Water and Light Plant
will take care Of the contemplated
improvements on that institution.
So with an enabling act to increase
our bonded Indebtedness $4,000 we
could make some very extensive and
much needed improvements in Union
City.
Now the conservative spirit nat
urally begins to show rising tenn
perature when the subject of bonds
are approached. And we would
most emphatically join them if there
were no prospects of increase in
population and wealth. Even now
Union City could float another lib
eral block of bonds without an in
crease in taxation, but If there were
no chances of growth we would say
no-no more bonds for Union City.
But it takes civic improvements to
stimulate growth, and growth means
increase of wealth and tax revenues.
Therefore by the time improvements
are made from the issue of an ad-
ditional $4,000 in bonds, if proper
ly managed, tax revenues will have
increased in the same proportion,
and the tax liability per capita will
not in all probability be a cent high
er than it is now.
For example: Union City is bond
ed at present for $4,000. Count
ing this at 10 per cent, 5 per cent
for interest and per cent for sink
ing fund, the expense of the bonds
is $4,000 per annum. Suppose we
issue $4,000 more. That will in
cur an interest account of only
$500 per annum more at the same
rate, or altogether $12,800. With
out any extraordinary growth and
without raising the basis of valua-
ton or the rate, the natural increase
in tax revenues in. three or four
years should be fully $500.
Now, for a fact; Union City for
several administrations back has
collected no sinking fund, and one
of the citizens made this the grounds
of comment few nights ago. This
we are inclined to believe should not
be so. But it was done tit is not
material who did it, with the under
standing that the bonds would be
refunded when due, and that the
Water and Light Plant is worth
twice as much as the bonded debt.
Nevertheless there should be a
permanent sinking fund. Every
home and particle of real estate in
Union City is pledged for the pay
ment of these bonds, and should
there be a disaster of any kind, and
for any reason our public utilities
would not pay the debt, then we are
individually responsible for what
ever we are worth above the exemp-
lions in law. A sinking fund would
virtually protect us all from this
trouble, and the city would sustain
a much higher credit with banking
houses and financiers.
We are defending the bond issue
as an exDedient not as the best