Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1923-07-18
Peoples Forum
Lancaster's Bonded Debt.
July 5th, 1928

Editor Grant County Herald,
Dear Sir:
In recent issue in FLASHES" un-
der the heading, "Lancaster's Bonded /
Debt Ahead Of Chicago, appears this |
statement: The per capita bonded /
indebtedness Of Lancaster, principal /
ana interest, is $3.50. Per capita !
means $3.50 debt for each man,
woman and child in the city"
Now, as the motto at the head OF
this column reads: Life is Short
Tell the Truth" let us endeavor 20
get at the truth in this matter.
If the per capita bonded Indebted
ness of Lancaster be $3.50, and if Ian
Csster's population be $500 as we will
admit it is, then her total bonded in
ueDtedness including interest to be
paid would be 1900 times $3.50 or
$450000. Is it? Let US see.
The original School District Bond
approved in 1919 was for $4,000.
Of this amount $4,000 has already
been collected; 5000 used to buy the
site for the new school building, and
S24,600 placed at interest Of 40 in the
Lancaster State Bank Money al
ready raised and on hand cannot be
classed as Indebtedness, therefore,
there is left of this bond only $4,000
instead Of the $4,000 originally au-
thOrized These bonds, maturing IN
equal amounts each year for twelve
years, are now in the hands Of bond
company to be sold, but have not yet
been paid for
Of this $4,000 Lancasters share
is $4,000, and the share of the por
tons Of the district lying outside the
corporate limits Of Lancaster, is $28,-
000
This $4,000 and the Municipal
Building Bond of 100000 is all the
bonded Indebtedness which the city
has. The total of bonds outstanding,
chargable to the City Of Lancaster is
therefore $4,000.
We will now add the total interest
at so, which must be paid during the
life of each of these bonds, to the
bond itself to find the total amount
that must be raised before these
bonds are finally retired in 1912. We
will keep in mind that the district
school bond has II years, and the
municipal building bond 10 years yet
to run.
Lancaster's share Of School
Bond ------------------$112,O0O
Total interest on $4,000 for
- years at so ----------- 36,792
Total school bond debt to be
paid ----------------.---- 1872
Lancaster Municipal Build
ing Bond -----------------$1OO, 900
Total interest to be paid dur
ing the 10 years this bond
has yet to run ----------- 1885
Total municipal bond debt to
be paid -----------------$149,875
Total of Lancaster's share of
school district bond, includ
ing interest 1872
Total municipal bond debt, in
Guiding interest -------- 149,875
Total bond debt to pay ---$298,667
$298,667 divided by $500 equals
$119.44 which is the actual per capita
bonded indebtedness of the City of
Lancaster at the present date, includ-
ing total interest, which must be paid
before the last installment Of bonds
is retired
The method by which the total in
terest which must be paid is arrived
at as follows The total of the bond
is divided into as many equal parts as
it has years to run, and, as one Of
these installments is paid off with its
interest each year, it is obvious that,
in the case Of the school bond, the
first installment will bear interest i0r
but one year while the last Install
ment will bear interest for II years.
Add the total interest for one year on
the first installment, (S466.65) to the
total interest on the last installment
for II years, ($5,599.80), and divide
the sum by 2, which will give the av-
erage amount Of interest for each
year, ($3066.45). Multiply the aver
age per year by II and We find the
total interest on the school bond from
issue to retirement will be $36,792.
While this method gives exact re-
suits in case Of the school bond, it is
only approximately true of the city
bond for the reason that the latter is
not retired in equal instruments. 1t
is sufficiently accurate, however, for
all practical purposes.
This amount as a whole looks huge
and, indeed, if it all had to be paid
back in single year, would cause
considerable amount of embarrass
ment. However, we must remember
that the last installment of this debt
is not due until 1912, that these pay
ments are spread over 10 years. Now
divide $120. by 10 and you will find
that the amount per capita which
must be paid back each year is only
$617 This does not look so big after
all
Furthermore, we must remember
that this $6.17 is not actually paid oy
each individual, but that each man
will pay in proportion to the property
he owns and not in proportion to the
size of his family. For the poor man
with a large family the percapita
payment each year is likely to be only
few cents while for the rich old
bachelor it may run above the 800