Milford chronicle., 1924-12-19

The practice Of establishing a fun
for the replacement OF buildings an
equipment ls now followed by prom
inenA Industrial companies. tn
United States Steel Corporation
90 years has set aside such a fun
at the rate Of about per cent. pe
annum on the value Of its plant
and outstanding bonds. From tim
to time this fund has been draw
upon for the replacement OF obso
iete buildings and machinery and +
an amount equal to 80 per cent. o
the original value Of the property
The General Motors Corporation ha
set aside 2h per cent. OF the valu
OF It's factories and 10 per cent. o
the value Of machinery and equip
ment, an average of about pc
cent. on the total. The accumulation
In the fund now amounts to over q
per cent. OF the value OF the prop
erty and has been invested in new
factories. 2. I. dupont de Nemour
and Company has operated a funC
for about 90 years; the accumula
tion at per cent. per annum ha!
also been expended in renewing
plants and machinery that have be-
come obsolete.
A similar plan Is proposed for our
school system. A fund maintained by
annual contribution Of about 2 1-2
per cent. Of the value Of our schools
will enable us to pay all existing
bonds as we'll as those to be issued
at this time in 20 years and to ac-
cumu!ate an amount equal to AZ 1-2
per cent. of the value Of all school
buildings. AS this fund Is to be in
vested, no better use can be found
for 1t than to purchase the new
bonds that must be issued from time
to time to rebuild schools now only
partly worn out, or to build the new
schools needed by increasing popu-
latiOn.
80. What plan for issuing bonds
can be recommended?
After some consideration the fol-
lowing arrangement for issuing
bonds and expending $374,OOO each
year seems about the best that can
be recommended. Issue $5,50O,0O0
Of 4 1-2 per cent. bonds, 100000
each in 1925 and 1927 will be set
aside each year and invested for
period Of 40 years at 1-2 per cent.
There will then be available for
again rebuilding the schools $780,
900, or one-half the States part of
the cost Of all the schools in the
State at tOday's prices.
The annual appropriation of $S74,-
600 Is proposed for the following
purposes:
Interest on IS, SOC, 900 bonds at
AZ per cent S241,5OO
Sinking Fund payment to be in
vested at Az per cent for 40
Fund for again rebuilding
schools to be invested at AZ
per cent for 40 years ............... $4,000
s878. 800
In 40 years all of the bonds will
be paid and a fund of $765O,OO will
be on hand for again rebuilding half
of the schools. If all need rebuild
ing, another bond issue of like
amount will then be necessary.
SO Now that the plan has been
described, what is the definite fixed
commitment to be made by the Cen
eral Assembly of 1925?
The General Assembly of 1925 is
requested to do three things only
that may be classed as commitments:
% To appropriate $1,500,00G
from the existing cash balance of the
general fund;
q To commit the State to an
issue Of $2,OOO.OOO of school bonds
during either the year 1925 or 1925;
(S) To appropriate from the
school fund $374,0O0 for 1925 and |
S374,OO0 for 1926 to be used for in
terest and sinking fund of the $2,-
OOO,O bond issue, the balance for |
building purposes.
"a What obligation will this /
,lace upon the General Assembly Of
1927 and others to follow?
The General Assembly of 1927 will |
leave no obligation to ontinue con-
structiOn work under this plan nor |
to appropriate any money because
If the proposed action of the General |
of 1925 except the neces.
sary provision of interest and sink
ing fund for the $2,OO0,000 bonds
sold in 1925-26. This would amount
10 $1O8,692 annually. 1t would be
he only financial obligation passed
rom one General Assembly to the
lext.
35 If two funds are established:
ne for paying the bonds at maturi-
v, calling for annual investment of
,51,4O3 and amounting in 40 years
o s5,5OO,OOO; the other for provid-
ng the partial rebuilding of the