Evening capital and Maryland gazette. (Annapolis, Md.) 1910-1922, 1921-09-07
LETTER TO EDITOR
Major Riley Discusses Methods En-
pl0yed BY County Commissioners
In Borrowing Money TO Retire
Certificate Debts.

Ill DOEFoNlHS MOHc. 10 hStiit
Certificate Debts.
To the Editor of the Ereaiag Capital;
II has been general knowledge for
some time past that, at the very be-
ginning OF the fiscal year. the County
Commissioners were trying to float a
loan of 100000 in order 10 change
The form of an Indebtedness which
he county has been carrying through
certificates. held by the different
banks of Annapolis.
The bare fact that such an indebt-
odness existed at the end of a fiscal
year and that those who have had
charge of the county finances for so
many years have never been able to
secure better system OF financia
management is. in itself, very seri-
Gus matter and is a strong proof of
iincapacity ,
4 have not been acquainted with the
details of the proposed loan, how
ever unit! the statement Of President
Walton.r of the Board of County Chm
missiopers. appeared in The aIftal
Of yesterday. 1913 'fa~8 ~
> This statement shows that a. shdek-
-ing and costly blunder has been made
At the expense of the taxpayers of the
county and that the failure to pro
ect the public interests has been APP
palling, This is the plain fact, as
will show
The certificates have been carried
IT the baI& at FIVE percent. interest!
,rhey have, been. converted in every
,ase to indebtedness bearing more
shan this: in one case, at over plne
percent.
According to Mr. Walton's, sthte-
nent, $4,000. discounted at as. WAS
borrowed at five percent, payable in
quail installments at six months and
me year. In other words. the county
yets $4,000. and pays $4,000. with in
crest at five percent. on the latter
sum.
This is what the county pays on the
rst $24, 500. due in six months;
interest at pig percent on
S29,OOo ..............S 6Zo-uO
Total ................Sl ,l25.OC
a simple calculation shows that
Ia25.00 paid for the use of $24,500
or six months is at the rate of 91S
percent.
On the second note of $24.5O0 for
which the county pays $4,000 at the
md of a year. the interest is not so
great. but much in excess of the FIVE
percent. paid on certificates.
These are the fguresa
Interest on $4,000 at five
percent ........... 81 $50 90
TO cover discount. . 10000
Total ............Sl $50 90
The sum of S1.750 is interest for
one year on $24,5OO at the rate of ia
percent
The question at once arises as TO
why these certificates were retired in
favor of Indebtedness costing the tax
payers a great deal more.
Why? Indeed, Let Mr. Walton,
who claims the credit for this
transaction. answer. There is no
good reason.
These certificates were payable
rom the 1921 levy, and payment
could not be demanded before the end
Of that fiscal year, which has just be-
gun, and probably not then unless the
county desired To retire them. Yet
the Commissioners have chosen 10
place this burden on the taxpayers
These certificates were issued UNI
der Chapter 124 of the Acts of 1904,
and provided that they shall bear in
crest ~ five percent. / was not able
20 find any other authority for the is
sue of certificates. and an examina-
ton OF one of the certificates itself
shows that a bank holding them can
not demand the payment, and il is
not claimed that they can.
1t is true that banks can loan their
money at better interest than five per-
cent, but il is also true that they have
large deposits from the county. upon
which they pay interest ranging from
only two percent. Checking accounts)
TO four percent deposits for sinking
funds). Under these circumstances.
the banks might well continue to
carry these certificates until a better
method was found for paying them OF
until the county provides method of
getting on a cash basis, something