Milford chronicle., 1929-11-29
GOVERNOR TELLS OF
REDUCTION OF STATE
BONDED INDEBTEDNESS
Continued from Page u

rious State institutions he has Wis
tied.
Governor Buck in the course of his
address said:
Il have been invited to talk to you
on Our State Needs with especial
emphasis on Education. 1 am happy
to be able to tell you that from my
study and insight into the business
being done by the State, the two sub
jects are not closely related By
that 1 mean this-the business of our
schools has been put on such splen-
did basis that it has few needs. The
State has most efficient Board of
Education, likewise a competent su-
perintendent or secretary and cap
able staff of assistants. AS is gener-
ally realized there is one man prin-
cipally responsible for our wonderful
system of public schools, Mr.. Pierre
S. DUPONT. He has rendered monu-
mental service to the cause of edu-
cation, and as you know, he recently
consented to continue to supervise
the tax department which has been
so efficiently organized under his di-
! ICCllOu lIlI IL MdO pO0OlOAC lOA LhC
last Legislature to appropriate &c.
I 100000 for the current operating ex-
penses of the schools for the ensuing
biennium also $2,500,000 for new
buildings and at the same time to re-
peal in it's entirety the State prop
erty tax for schools. 1t can be con-
ceded that education in Delaware is
on a sound basis and the only anx-
iety I can see that we need have is
that the system shall not expand in
the next few years beyond limit
where the income as now derived
for its support would be insufficient.
Turning next to the subject of
the bonded Indebtedness of the State.
1 come to a matter which needs little
study but prompt action. The situa-
tion that exists here can tell you
in not many words. During the fiscal
year 1928-1929 the State had an aver
age monthly cash balance, not sur
plus, but cash in bank of approx
mately $7,500,000. This sum drew
21h per cent at the same time the
State debt was $12,500,000 on which
it was paying and still is from to 6
per cent or an average of about Az
per cent.
"In cold figures this means that for
every million dollars of surplus the
State has in bank which might be
used to reduce the debt, but isn't,
there is an annual loss of 100000.
July 1 last the State had a hand
some current surplus and the bonded
debt 1 have mentioned. Since none
of this surplus without legislative
sanction could be used to reduce the
debt, it means that the State must
go on paying Az per cent or $45,000
annually for each million it had bor-
rowed while it received for its sur
plus annual interest of $4,000 for
each million on deposit-a loss in
interest which when applied to the
total debt of $12, 500, 900 means an an
nual loss of $250,000 or a per capita
loss of about a dollar.
"It would seem that much stress
is laid by some upon knowing a
states per capita cost, a figure which
conveys little unless compared with
similar sets of figures of other states,
when it Immediately assumes false
erroneous value, as no two states in
the Union operate on precisely the
same basis, while their population
and area are important factors to be
considered but never are. 1 have yet
to see per capita cost figures of any
two states that seemed to me honest
to compare. But am straying from
the point l wanted to make and that
is that we are losing money by not
using such surplus as can be spared
to retire the State debt.
ITO aid in correcting this situa-
tion may 1 take a minute to tell you
briefly what has been done. On June
80 last we cancelled $2,000,000 worth
of highway bonds and have since
completed arrangements to cancel
$5,000,000 more on the 31st of next
month. The money with which to do
this came from the sinking fund, and
under an existing act could be used
for the purpose.
Because the highway department
had to sell half million dollars of
bonds during the summer to finance
its operations, the total debt was in
creased to 100000. AS have said
we will retire $7,000,000 of this
amount this year, I hope $1,500,000
more next year and if we meet the
General Assembly in 1881 with suffi-
cient cash surplus to cancel the re-
naming debt of $4,000,000 or $4,500,-
900 trust the members may see the
direct saving that will come from re-
tiring what then remains of the
bonded debt. The desirability of this
is magnified with the knowledge that
on one of its debts to the University
of Delaware for $4,000 contracted
ffty-two years ago the State has
paid something like $259,O00 in in
terest.
81 cannot pass this subject of debt
retirement without telling you that
the last and most direct benefit to
come from what has been done this
year in this connection is the expec-
tation that the Highway Department
will finance itself after this year on
current income alone and that no
more bonds will be issued for road
building.
"It is wide jump from a discus
sion of finances to principles of engt-
neering but having touched upon the
business of the Highway Department
I cannot resist mentioning to this
audience, though I don't expect you
to be as enthusiastic about it as 1
am, the fact that the Highway De-
partment after repeated efforts is
closer than it ever has been if it
hasn't fully discovered how to salts
factorily and successfully improve
roads feeders to the con-
crete highways) in way that will
revolutionize the road building that