The Birmingham age-herald., 1922-04-23
ENORMOUS SUM IS. INVOLVED IN PLANS.
 FOR THE BOND ISSUE.
Analysis by Mitchell Shows How Taxpayer Gets A
 Cents Value For
 Each Dollar


 engineer and citizen of Birming ham, who is a candidate for legislature, yesterday made the following state- ment with reference to the proposed bond and tax referendum:
 At the close of the fiscal year, October l, 1921, the bonded indebted ness outstanding of the city of Bir- mingham as indicated by the 1921 financial reports. was as follows:
 Bonds of suburban municipalities, assumed by annexation, s1,2S5,1O0.
 Public improvement bonds, s1.374,- 900.
 General city bonds. sS,209.00O.
 Making a total of $10,S68,100.
 Scanning the exhibit therein. the first two classes of bonds are shown to have an approximate average of Is years yet to run tU maturity, while those of the last named class have m approximate average of 25 years.
 Assuming an average interest rate of per cent per annum on all three classes of the bonds, the following tabulation of interest charges Is ad- duced:
 Suburban bonds IS years at per cent interest amounts $963,S2
 Public improvement bonds 15 years at per cent interest amounts to $1,- 030.500.
 General city bonds 25 years at per cent interest amounts to $10,- 2G1 ,250.
 "TotaI interest on all bonds which shall have accrued to the date the bonds mature, s12.255,575.
 Adding principal and interest to- gether results in the following:
 Suburban bonds. principal s1.2s5,- 1O0 interest, $963,S25; total, $2,24S,- 925.
 Public improvements bonds. prin- cipal. $1,374.0O0; interest $1,O30,500; total. $2,404,5 300.
 General city bonds, principal sS,- 209 900; interest. $10,261,25o; total $1S.470,250
 Making a grand total of principal and interest required to be raised through taxation by maturity to pay off this debt $23,123,675.
 I've are now confronted with the proposal of increasing our indebted ness by another issue of bonds to the extent of 900, for a term Of 30 years. the interest on which is fig ured at per cent would amount to exactly IF times the principal, or s10, 0,000 requiring the taxing of the people of Birmingham for this is- sue to pay principal and interest, the sum of $17,500,OOO.
 If this plan prevails We shall Dc burdened with a total present prin- cipal debt of S17,86S.100, UFon which we will have to pay interest to matur- ity in the sum of s22,755,575, making grand total of $40,623.675 which We shall have paid for the use of $17,- S6S. 100.
 "These bonds issues mean a rich reward In interest to bond holders, but mean an approximate reduction in the purchasing power of the dollar of the tax payer to less than A cents; for every dollar that is paid in taxes more than 56 cents of 1t goes TOT In terest on these bonds.
 And, the end is not yet. It will be only a little while before more bonds will have to be issued to refund those that will nature as there Is no ample provision made in the sinking fund to pay any more than the interest and practically nothing to pay the princi- pal.
 "The proposed three mill tax which the voters are asked to approve Will bring in scarcely any more than suf- ficient revenue to pay the interest on this proposed issue of $7OO.0OO or bonds. The 1921 tax assessment based on SO per cent of the actual values, IS StateQ Rt 9l4Oifoo,ooV.VV' ehS venue at three mills would then be s421, ,360.74 while the interest on the S7OO. 900 would be $S50,000.
 "The problem is one which deserves the very serious consideration or every voter before casting ballot to further increase the city's enormous debt.
 of we must tax ourselves to con struct the necessary improvements of our city 1t would seem far wiser to employ the proposed three mill tax to provide a sinking fund to be used to pay the required improvement. This however, would require authority rom the legislature. and use the money for that purpose only. thereby getting full 100 cents worth of im- provements for every dollar of the tax payers money and stop paying interest.
 "All voters, whether property own CTS or not who may or may not pay taxes on real or personal prop erty, are equally interested in this matter; for where they may not taxes directly, they certainly must pay in- directly in the end, being remainded that every increase in taxes means higher rent of dewlling and business houses. and consequent increase Tn the cost of shelter food and raiment' for the landlord must increase ms rents, and the merchant is bound to add the tax to his prices, and Tn the final analysis the consumer pays the freight always