The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-01-06
INTEREST EATS
Big Share OF
SCHOOL FUNDS
$102,460 Paid on Library
Bond Issue, With None
of Principal Retired.
PAY AS YOU CO. URGED
A. B. Good, Business DireC-
tor, Gives Figures to
Show Argument Is Right.
BY LOWELL NUsSBAUM

Back in 1911, the citizenry Of In
dianapolis deemed it advisable to
build a new public library, and the
school board obliged by purchasing
a site at Meridian and ST. Clair
streets, paying for it by issuing
S125,OOO in bonds.
Today, the school city still owns
the site, on which a handsome
structure has been built, but it also
owes the entire $125,00O bond issue,
despite the fact $1O2,46O in interest
has been paid. The bonds will not
mature until 1916.
This incident, together with many
similar ones, shown in report
compiled today by A. B. Good,
schools business director, provides
strong argument for hackers of
the "pay-as-y ou-go" plan.
Since 1872, when the first Indi-
annapolis school bonds were sold, the
school city has issued a total of
$15,674, 300 in bonds. 1t still owes
$10,644,000 Of that total.
Cost Is Enormous
Bond totaling only $5,030,3 300 have
been paid off in that Cougar period,
but the staggering sum OF $7,053, 688
has been required thus far for the
privilege of keeping up with the
building needs of a growing school
population, and passing the bills on
to poSterity.
The practice of issuing bonds was
started by the school city in 1872,
when 100000 bonds were sold.
At that time the board was in
formed by its attorney, school rec
ords reveal, that the law permitted
it to assume an indebtedness no
greater than that sum, and required
that the bonds be retired within
five years.
To meet this retirement provision,
the board refunded the issue four
times, until the bonding power was
enlarged in the ninetieS.
After that, issuance of bonds to
! OCItOOl
buildings and acquiring sites became
a regular practice, but no extensive
issues were sold until 1919, when
the board issued 81, 100000 for a unit
at Tech, for repairs and real estate.
Amount Keeps Increasing
In 1920 issues sold totaled $4,236,-
900, while in 1921 an even greater
amount of bonds, $4,736,OOO were is
sued.
Nearly $12,0OO0O0 of the total
amount of bonds issued in the sixty
year period was sold in the last
thirteen years.
Thirty years ago, in 1908, an is
sue of 100000 was sold. Of this
amount, $4,000 still is outstanding
and will not be retired until 1884
and 1885. Interest thus far has to-
tailed $183,365. These are the Oldest
bonds still outstanding.
The following year the board
t1oated an issue of $150,0O0, on which
$140,962 interest has been paid and
$4,000 of the bonds still are out
standing.
Although the main library site
was acquired in 1911 bonds for the
library building were not author
lied until 1915, when a $5O0,OOO issue
was sold, the entire issue to mature
in 1855.
Only One Bond Retired
Only one $1,000 bond has been
retired, leaving $4,000 outstand-
ing, and the school city paying out
$4,000 interest annually on the is
sue. Thus far, interest on The IL
brary building has totaled 1851 .228.
Thus the library site and build
ing bonds totaled $625,000, of which
only $1,000 has been paid and on
which interest already has amount
ed to $50l 200, and which at their
maturity, will total 81 ,055 200, which
is $3.50 900 more than the bonds.
Many other amazing facts are
shown by Goods summary of the
schools bonded debt. In 1894. the
school city sold a 100000 issue,
which has been paid off, but which
cost $62,100 in interest.
An issue of $1,645, 900 for build
ing the Teen shop and power house
and Schools % and 26 was sold in
1920. These bonds will not mature
until 1940 but the board has
bought up and retired $202,OOO In
tereSt on this issue has cost $947. 952
thus far, and by 1910 will have cost
81, 496, 202.
Interest Equals Principal
Considering the fact that the
bonds were sold at a discount Of
nearly 100000, the interest in
twenty years will equal the princi-
pal.
The present school board, Good
pointed out, has retired more bonds
than it has issued.
Since Jan. l, 1880, when the
present board came into power
bonds totaling only 100000 have
been issued, while other bonds to-
falling S1,2470OO have been retired.
net reduction in the bonded debt
of $4,000.
AEIAI QrIIT7 AAnREI