Indianapolis Times, Volume 42, Number 71, Indianapolis, Marion County, 1 August 1930 — Page 3

AUG. TANARUS, 1930

LONG-TIME CITY BONDING FLAYED AS TOOCOSTLY Reserve Fund Creation to Reduce Expense, Urged by Jeup. Creation ol a depreciation reserve fund from the current tax levy to replace the expensive bond issue method of making improvements, was advocated today by B. J. T. Jeup, city sanitary board president and former city engineer, who pronounced the long-time bonding policy as a “fallacy.” Citing the tremenduous cost of the long-time bonding plan of financing major repair expenditures, Jeup urged that municipalities create “replacement or renewal funds,” starting to build up the reserve at the time of the original expenditure. “So much practical experience has been had in estimating the life of various structures that it almost has become an exact science," Jeup declared. 4 No Use to Wait Every department of the city government can estimate the life of different structures and provide an annual replacement fund to renew this structure instead of waiting until it requires replacement and a large expenditure,” Jeup said. Using a hypothetical case of a $200,000 bond issue for street resurfacing at 4Vi per cent intertest, Jeup pointed out that the cost of financing the project over a forty-year period would be SIBO,OOO. “This I wotßd consider very reckless financing,” Jeup said, speaking of the heavy outlay of interest. Jeup said investigation showed the state board of accounts sets up no such account, but that he was advised by Tracey Whitacker and Janies Smith, examiners, that some cities which operate municipal utilities have such an item. Deposited on Interest The money set aside each year from the current tax revenue would be deposited on interest, earning the city interest instead of the city paying interest over the long time period for borrowed money. Survey of the city’s anticipated expenditures for repairs and replacement for the next few years was suggested by Jeup, as a means of improving public financing methods. “Every bond issue automatically increases the tax levy, therefore the reasons advanced for the necessity for every bond issue should be carefully scrutinized. I know of no more reckless municipal act that the issuance of long-time bonds for municipal improvements,” Jeup declared. Life of Improvements No such bond should extend over a period longer than the life of such Improvement, he said. “It is clear that it is better for the city’s financial system to set aside a fund and accumulate interest thereon than to provide funds' and pay interest without getting any tangible return,” concluded Jeup. The sanitary engineer advocated further saving of public funds by reducing .operating and maintenance costs and increasing the city's ■ revenue from more business-like . sale of by-products, licenses and fees through more stringent law enforcement.

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Air Bullet Paris Bound

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George R. Hutchinson, 26, Richmond (Va.) pilot, is shown here with his “flying bullet,” anew mystery Lockheed Sirius monoplane, in which he will attempt to fly the North Atlantic.this summer. The plane vis delivered to him at Los Angeles. Hutchinson will follow the trail blazed by Colonel Lindbergh.

BLAMES PIRATES FOR RUM SCOW Forced to Load City Boat With Rum, Says Skipper. Bu United Press NEW YORK, Aag. I.—Bootleggerpirates who swarmed aboard a city garbage scow and in no time at all had him covered with pistols, forced Skipper Leonardo Sammartino to accept a cargo of 1,500 case of liquor Monday, he informed his superior today. This explanation was made w’hen he was called to explain the presence of the liquor, which was seized, along with the scow, when the boat docked here. Charles S. Hand, department of sanitation commissioner, agreed the occurrence was rather surprising. He felt impelled to point out, however, that Leonardo Sammartino had S2OO in his pocket when arrested, and had made a S4OO deposit ten days en or, although his w r eekly salary is *42. Meanwhile, Robert B. Watts, assistant United States attorney, said he had received evidence indicating rum running on city refuse barges is not uncommon. Twenty-two persons were arrested Tuesday when the scow was seized. Eight were city employes, who were suspened Thursday. FIND USE FOR CORNET Solo Played by Salvation Army Ensign Wins Requests. Bu United Press NEW YORK, July 25.—The cornet solo played by Ensign Stanley Shepherd of the Salvation Army here won the entire fortune of J. Frank Baumgardner, Syracuse printer. Explaining that the army “is the -ingle human agency in which I .lave implicit confidence,” Baumgardner turned over all his property, reserving only annuities for his wife and himself.

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THE INDIANAPOLIS TIMES

THIRTY MILLION IN BONDSASKED Hammond Insull Plant to Be Reorganized. Petition for more than a $30,000,000 securities issue, to reorganize the financial structure of the State Line Generating Company, the huge Insull plant at Hammond, was filed today with the public service commission. The petition requested authority to issue bonds, debentures and common stock and to recall for redemption before maturity two-year notes issued in 1928 and 1929 and to repeal advances made by the owning companies. Authority was asked for issuance of $15,000,000 of first mortgage 4V4 per cent gold bonds, series A; $8,000,000 of five-year s’i per cent gold debentures; 717,000 shares of common stock at no par value to yield not less than $7,176,000. The company proposes to call for redemption on Nov. 1, 1930, the entire issue of $14,000,000 of two-year per cent gold notes due Dec, 1, 1930, and $7,000,000 two-year SV? per cent gold notes due May 1, 1931. The State Line Company is owned either directly or through subsidiary corporations by the Commonwealth Edison Company, Public Service Company of Northern Illinois, Northern Indiana Public Service Company and Interstate Public Service Company,

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