The evening herald. [volume] (Albuquerque, New Mexico) 1914-1922, 1917-05-16
BORROWING DURING
PRESENT CRISIS IS
NOT GOOD JUDGMENT
Municipalities and Other State
subdivisions Should Refrain
from Negotiating Loans, Ac-
cording to Taxpayers Head.

special correspondence 10 The herald.
santa &c, n. NJ. May i6.-That
municipalities and other state sub
divisions can show both patriotism
and sound business judgment by re-
framing from borrowing during the
present crisis. In pointed out BY A.. n.
Jones, director OF the Taxpayers assoc
citation. In an article on County and
Municipal Finance During the War
which will appear in the forthcoming
issue Of the Tax Review. After calling
attention to the fact that the new
federal bond issue doubles the entire
debt OF the United states. national.
state. county and municipal, and that
che inevitable result of this and any
future war loan will be a big advance
la Interest rates, Mr.. James says;
There IL just so much capital In the
country awaiting investment. A great
increase In the demand for Il will In
evitably raise h price. IL h gov.
eminent Itself Is forced 10 a five per
cent basis the states and localities will
find the money market practically
closed 20 them. Furthermore. what
ever they borrow absorbs just so much
OF the available capital and raises tho
price Just so much for the United
states. Fifty thousand dollars for a
single district may seem a small sum
In these days OF billions. but ten
thousand districts borrowing represent
$500. geo. Geo. a very respectable sum.
! Moreover. the railroads. the factories
and other Industrial corporations must
borrow large sums to meet the war
| pressure-to help conduct the war
and bring IL 10 a successful conclusion.
To postpone municipal borrowing,
therefore. wherever possible. Is not
only good municipal finance. II Is al
so the highest form OF patriotism.
There is still another side to the
picture. After the wal the immense
sums borrowed will be rapidly repaid
II the present federal policy of heavy
| taxation ls adhered TO. and the habit
% having acquired during the war
will produce large sums for invest
ment. Then the conditions Will be re-
versed. more capital viii be seeking
investment than there are investments
offrcd and Intrest rats will inevitably
fall. Then municipal borrowing VIII
be part of wisdom.
Again. present costs OF building and
other improvements are at least twice
as high as normal. and during the var
will continue To rise. Labor expend-
ed upon pubic improvements not aO-
soiutely necessary Will be taken from
the farms, the factories and the armies
where the war will be won. II VIII
cost far more and. more important
will hamper those ends for which ths
nation must strive with unity of pur-
pose II they are to be achieved. Later
' when the armies are disbanded, the
1 factories retrench. the public viii per-
form a great service TO capital and
labor by developing It's activities IN
peaceful improvements. BY th1'
means the slack will he taken up, un-
employment OF capital and labor VIII
be prevented and the tremendous re
adjustment necessary viii be accom-
, pllshed without industrial ~disorganizn-
ton. loss and hardship.
To get our moneys worth, as a mat
ter OF patriotism, our municii'alitie
should not borrJw or improve durin1
the present crisis except as vitality nee
essar. The postponement OF Things
which can be postponed may mean
the difference between prosperity ana
/ panic after the war