Smyrna times., 1924-02-06
STATE DEFAULTS ON SCHOOL
BONDS IN 27 OF ITS DISTRICTS
REPRESENTATIVE FRANK COL
LINS WARNS OF EXTRAVAGANCE
Economy" Assembly Bungled On
Budget, Refusing Permission to Pay
Money Received on Indebtedness

Economy" Assembly Bungled On
Budget, Refusing Permission to Pay
Money Received on Indebtedness
Even while the roar of eloquence
was reverberating from the tOughen-
ed vocal cords of Representative
Frank Collins, reputed "father" of the
State School Budget Law in the last
session of the General Assembly, |
wherein, in a speech before the Dem |
ocratic city committee last Thursday, |
he warned against an "era of extrav-
agance," school district after school
district in New Castle, Kent and Sus-
sex counties were defaulting on their
school bonds as a direct result OF a
clause inserted in the Budget Law by
Representative Collins denying the
use of any money received from the
State for the payment of past indebt-
edneSs. Twenty-seven school districts
of the State of Delaware, and through
them, the State of Delaware itself, as
a result of the bungling cheese-paring
methods used by the assembly school
budgeteers, led by the redoubtable As
semblyman Collins, have become de-
faulters to a total amount of $73,812
in bonds, and $6,85948 in interest.
Representative Collins eloquence stir
red the members of the Democratic
city committee, but failed utterly to
arouse a responsive chord in the
breasts of the widows and other in
vestors of small means who are de-
pendent on the money they trustingly
invested in school bonds, believing
the word of the State of Delaware to
be as good as its bond.
It failed to cover up the fact that
the State of Delaware has defaulted
on its bonds, and that many poor peo-
pie, who believed the investment to be
superior to a real estate mortgage in
| asmuch as the word of the State was
pledged, are denied the interest in
| their small investments, and are like
ly to have to spend good money to Sc
cure a mandamus to force payment.
On the one hand there is alleged eX-
travagance; on the other there is act
ual defaulting of the sovereign State
Of Delaware on its bonds. When the
School Budget Law was prepared by
the majority party in the last General
Assembly, it was stated that no part
of the sums given by the State to the
school districts should be used for
debt service. That is to say, those
districts which had borrowed money
in the past were forbidden to pay any
of the money received for interest OF
on the bonds themselves. There is no
other source of funds on the part OF
the school districts, always excepting
the special districts, unless another
section of the law is followed. That
is that a district may levy a special
, tax. Chances that the districts are
going to levy special taxes to pay of
bonds that in some instances amount
to $4,000 are very slim indeed. 1t is
believed that every school district II
the State owing money on bonds vii
default. In 1919 these school district!
were taken under the county wing,anC
. their debts became county debts. II
1921 they were taken under the wing
of the State, and their debts became
State debts. Now the State, through
= its budget law, utterly refuses to al
low the money received from tn
State Board to be paid out on an.
past Indebtedness. The result ha
been that all districts have defaulte
and thereby the State of Delawar
has defaulted. When this subject wa
brought to the attention of Represen
tative Collins, "father" of the Bulge
Law, at the time of its passage, h
callously remarked, "Let them pa
their own debts" despite the fact thu
the districts could not do so if the
wished. Apparently it is Mr. Collin
impression that in some mysteriOJ
way these bonds and the interest G
n them shall be paid by the Taxpayer
er of the district, and thus assist in Gu
,e; ting down the "era of extravaganza
Up to the present time there has bee
no evidence of any school district a
,1o @o tempting to lay a special tax to p;
ar off either the bonds or interest.
AS an example, the Oak Gro
I'VE School District in this county ow
$4,000 in bonds, and has defaulted
interest due October 20, 1928. Tow
9d- send has defaulted on bonds totali
See S4,40O, and Mt. Pleasant on bonds
falling $4,000. Greenwood, in Suss
county has defaulted on $12,3C
Bridgeville on $4,000; Rehoboth
$4,000. In all twenty-seven sch
M districts have already defaulted
their bonds. Confirmation that sch
bonds have been defaulted on has bt
received from Charles B. Evans,
torney, who is looking after the int
ests of several clients who have fai
. to receive their interest at the ii
set and from the State School Boz
- through John Shilling, assistant