Belding banner. (Belding, Mich.) 1889-1918, 1916-03-22
Bonds Solved Road Building
Problem

1t costs q great deal of money TO
build good roads and the question
that has given most concern to the
economists who have studied the sub
ject is the best way to raise the
necessary funds, always keeping in
mind the public credit. The success
full prosecution Of the work requires
a steady supply Of money and ex-
periencc has proved that this cannot
be obtained by annual tax levies in
the States and districts where the
roads are to be built. The plan of
building post roads by Federal aid
has been much exploited and various
schemes have been proposed looking
to this end The Shackleford Bill
which recently passed the House at
Washington by an overwhelming
ma ority, and which the Senate is
now bidding with in a political way.
is the best and most reasonable and
practical and constitutional measure
yet discovered of interesting the
General Government in the business
of highway Improvement. What the
Senate will do about it, no one
knows; but whatever the Senate
shall do the work must go on if the
commercial, industrial and social in
terests of the country are to be con-
served and the people saved from the
fearful drain upon their resources
caused by the existing roads over
which they must do business.
How is the money to be raised for
road construction? By the issue of
highway bonds appears to be the
most practical way. 1t is the way at
least that about half the counties in
the United States has adopted of
solving this great problem. The
total amount of highway bonds is
sued by the counties aggregates
about $300,000,000 and the total of
all highway bonds, including the
bonds voted by the States as well as
the counties amounted on the first of
the present year to not far from half
a billion dollars. The most of the
highway bonds outstanding two
years ago are to be retired by sink
ing funds. The sinking funds pledg-
ed for the redemption of these bonds
at maturity are accumulated by an
nual instailments so accumulated are
supposed to draw interest from the
late of their payment so that the
sinking funds acquired by taxation
viii be sufficient to retire the bonds
upon maturity.
That was the theory but it has not
invariably met the condition, as in
iome impressive instances it has not
been found possible to invest the
sinking funds thus acquired at a pro-
stable rate of interest. Tale the
,ase of New York, City and State
for Illustration. AS explained in the
Annalist in an orticle by Alfred d.
Chandler, of Boston, last October,
he sinking funds of New York State
mount to about S40,000,000, and the
mixing funds of New York City to
about $370,000,000. The theory is
that such funds can be invested
promptly at rate Of interest above
The usual bank deposit rates; but
Nctually the theory does not work.
During the last year the average un-
invested amount Of New York
City sinking funds amounted to
more than $10,000.000 each week"
The bonded debt of New York City
s about $1,000, 100000 of that debt
1.-THE bonded debt of New York City,
lad originally been issued in serial
instead of sink fund form, assuming
inform terms of fifty years at
Der cent, the difference in the in
terest account between the two
'Qrms would be the amazing sum of
$3.50, 000,000l Sinking funds ordin-
'rily pay no part of the interest.
Even if the sinking funds in the case
lere presented were credited with
'arning per cent continuously for
he fifty years, yet the difference in
'avor of the serial bond method
ould be $303,057, 900! "For every
S1,000,000 Of New. York's standard