Imperial Valley press., 1922-11-02
The Water and POlUer Act
An Analysis
By X. ID. McPHERRIN

I eral fund and resulting taxation,
may issue and sell bonds to provide
funds required to make such pay
ments of interest or principal.
This is held by financiers to be the
| clause which allows .pyramiding of the
state debt. The language of the clause
| indicates that the trainers of the amend
ment are not satisfied that revenues
from projects will be sufficient to care
for all charges, and, having the power
of taxation upon which to support fur
ther issues of bonds, they naturally
pass the responsibility for failure to
secure revenue back to the farmers
and business men of the state. Should
any private corporation attempt any
such system of financing, the officers
of such Il corporation would speedily
find themselves in Jail at the instance
of the state commissioner of corpora
tions.
The concluding paragraph of Section
VII describes the manner in which the
board presents to the Finance Commit
tee its financial requirements, and once
more, and for the second time, care
fully excludes the estate treasury as
the custodian of the money from the
proceeds of such bonds as follows:
"The proceeds of the sale of
such bonds shall be placed in the
treasury and shall be used by the
board exclusively for the purpose
for which the same were issued.
Had the trainers of the amendment
intended the proceeds from these bonds
4 l. -. to4, Al
is inconceivable that the score of pub
lie spirited citizens who examined and
ratified the amendment as drawn III
Mr.. Spreckels' office would not have
said estate treasury" in so many
words
Authority to establish rates, to raise
and lower such rates, and to do any
and all things it may think needful To
bring out the necessary revenue is
granted in Section VIII, and in this
section begins to appear the word '' loss
es - The section is worded so that
the board must average the costs and
:" losses" of every project and fix
rate sufficient on each project to carry
the others, in order that profitable
project may be levied upon to support
the overhead on an unprofitable pro-
ject.
Then comes in Section TX the follow
ing language, as if the reference to
estate treasury in former sections
were not sufficiently explicit.
"'Section 9. All revenues of the
board, except proceeds from the
sale of bonds, shall be paid into
the state treasury, and shall be ap-
piled first to payment of the eX-
penses of the board, costs of opera
tion, maintenance, depreciation, IN
surance and losses, and second, to
the payment of interest on and
principal of said bonds.
The second paragraph of Section IN
makes continuing unlimited deficien-
ey appropriation from the general fund
in the state treasury, and here again
we find the estate treasury" explicit
ly mentioned as such in the following
language:
of at any time the moneys in
the state treasury applicable TO
the payment of interest or princl-
pal of said bonds, shall be insuff
cient to pay the same as it falls
due, moneys shall be temporarily
o. advanced from the general fund
for that purpose, and there is mere
by appropriated from the general
fund in the state treasury such sum
annually as will be necessary to
pay such interest and principal.
1t is necessary to dwell upon the
danger of an unlimited deficiency ap-
preparation in any state or national
treasury It simply robs the state
treasury of any chance to reenperatc.
And the provisions further on in the
paragraph definitely and concisely di-
rect all officers charged by law with
any duty with regard to the levy and
collection of taxes to do and perform
each and every act which shall be
necessary to collect the sums abstractei
from the state treasury under this pro.
vision, from the tax payers, which,
under the provisions of this amendment,
means all the taxpayers in the state,
farmers, merchants and everybody.
This section also provides for a re-
turn into the estate treasury" Of sums
abstracted; but carefully provides that
such sums
"shall be returned into said gen.
eral fund out of the revenues o.
the board rs soon as the same be-
come available, together with in
terest thereon from the several
dates of such advances until 50 re.
turned at the rate of 6 per cent
per annum, compounded semi-an
ihally.''