1. Borrowing leads to extravagance.
2. Increase of municipal indebtedness.
3. Why we should pay for posterity.
4. Society could not long exist on the principle of doing nothing for it.
5. Why another generation might oppose an expenditure incurred for its supposed benefit.
6. Amount of the national debt.
7. Coupon and registered bonds.
8. Legal-tender and other notes.
9. State indebtedness.
to. Town and county indebtedness. it. Growth of city indebtedness.
1. We shall not detain our readers long in giving reasons justifying or opposing the policy of contracting public debts. This subject has been so well presented by Prof. Adams in his work on "Public Debts" that noth ing need be added. In general, it may be said that the policy of public borrowing, except for a great necessity, like the maintenance of war, is most unwise. Happily, the Government, until the Civil War in 1861, was a small borrower, and the rapid reduction of the funded debt since 1866 is one of the chief glories of national adminis tration. A policy of public borrowing is sure to lead to extravagance; this is a trite remark, and illustrations may be gathered everywhere.
2. The municipalities have been rapidly rolling up debts during the last thirty years. The objects for which loans have been contracted in most cases have been justi fied, though doubtless the amount thus raised has often been largely wasted. Our municipalities have grown with great rapidity, and large expenditures have been needful to build sewers, to make streets and other per manent improvements. The money squandered in many places, collected by taxation, if wisely and honestly ex pended, would have been quite sufficient for all improve ments. In other cases, to some extent, improvements might have been delayed; in still others, doubtless, more improvements pertaining to the health and convenience of the people would have been justifiable. It is a nice question what proportion of the burden ought to be borne by the present taxpayer, and how much can be justly laid to future generations for them to pay.
3. The old, hackneyed phrase is often uttered, "as posterity has done nothing for us, we should do nothing for posterity." This remark springs from the grossest ignorance and selfishness. We are born into a state in which very much has been done for us. Streets and sewers have been built, school houses, other public build ings, many things have been done that need not be men tioned. A society has been formed, the work of ages, of incessant conflict, and at heavy cost. Ought we not, in return for all the endowments from which we derive so much enjoyment and benefit, to do something for those who are to come after us? To grab and use all that we have inherited and shirk from doing anything for others is the highest conceivable form of selfishness.
4. Society could not long live on such a principle. Society holds together by virtue of reciprocal action; each one is doing something for others, either conscious ly or unconsciously; but the principle of grabbing every thing and giving nothing to others, strikes at the heart of society. The State, therefore, is not justified in bor rowing for all expenditures, of putting the burden on others while we are enjoying the present good of them. Since we have received much from the past, it is our duty to do much for the future; and the State should be very slow in burdening the future with obligations.
5. Again, the State should be slow for the reason that another generation might think differently concern ing the worth of a benefit for which they are compelled by no action for their own to pay. Suppose, for ex
ample, a city to-day should build new works for supply ing the people with gas, as New York contemplates do ing. We are on the eve of great changes in the use of e'ectricity. It may be that in a few years gas will be a thing of the past for lighting purposes, and yet, if a large sum is expended for constructing a gas plant, an other generation must pay for it, though, perhaps, pre ferring electricity for lighting purposes as well as for power.
6. The indebtedness of the States at the close of the Civil War was very large, incurred chiefly to sustain the cause of the Union. Commendable progress has been made in its reduction and not much remains.
7. Towns and counties also contracted money loans for the same purpose. Some of them have expended considerable sums for highways and bridges and other needful purposes. The burden in some localities has been heavy, where numerous large streams have required the building of costly structures. Within the last thirty years some towns and counties have decreased their in debtedness, other have increased them.
8. The most common complaint concerning public indebtedness has been its growth in the large cities. These have spread so rapidly and have been so mis managed that the burden of indebtedness has become enormous. Some of this indebtedness has been contract ed for proper purposes; much, as every one knows, has been the consequence of circular movement whereby a few persons have succeeded in getting control and using the public machine for private ends. City government has been a kind of great mill in which the millers have collected the grain in the form of taxation, run it through their mill and kept the flour, kindly giving back to the public the shorts.
9. Some cities have incurred enormous expend itures, counting on light taxation in consequence of their future growth. The city of Elizabeth, New Jersey, is a good illustration. Streets were laid out and built far be yond the lines of settlement, believing that persons would be attracted by the unusual facilities for comfortable living. But the plan was radically wrong. To pay the interest on the indebtedness high taxes were inevitable, repelling instead of drawing people, as the improvements were not an adequate return for their cost, and repudia tion followed.
1o. We need not repeat the story of municipal bor rowing for unwise purposes—the building of expensive court-houses, city halls and other structures not justi fied either in the sight of the people, or by the needs of the places where they have been built. Nor need we repeat the story of public unwillingness to pay debts, and their contests with creditors to escape payment.
A few years ago many towns, cities and counties voted public credit to extend railway enterprise. Enor mous sums were raised in this manner. Most of these enterprises have never paid public lenders, and in some cases the load has been so heavy that they have tried to repudiate it. Some of the newer constitutions have pro hibited municipalities from making such loans; in some States the courts have taken action to save municipalities from plunging into excessive lending of this character.