Jasper County Democrat, Volume 9, Number 25, Rensselaer, Jasper County, 22 September 1906 — Page 7

DEMOCRATIC LAW PAYS STATE DEBT

If a political party could he prosecuted criminally for trying to obtain vote* under false pretenses, the Republican party of Indiana would be indictable for the following plank in its platform of April 12, 1906: “A Republican administration means a reduction of the public debt. The present administration has reduced the debt >407.000, and during the last twelve years of Republican control of state affairs’ the state debt has been reduced from >7,512,165.12 to >1,289,616.12. The foreign debt of the state is now only >BOO,OOO. The option to pay this debt does not accrue until 1910, and the debt does not become due until 1915. By reason of Republican business management we will be able to pay and cancel all of the bonded indebtedness of the state that can ever be paid the date the option to pay matures, and live years before it is due, without adding a mill to the state tax levy." And also for this statement in the Republican Handbook for 1906: “When the Republican party succeeded to the control of the sta>e finance board and of both branches of the legislature in 1895, a control which it haa maintained continuously to this day, the state debt was >7,520,615.12. During tiie period of eleven years which has succeeded, not only have the interest charges been promptly met and provision made for normal state expenditures, but the state debt has been reduced >6,715,616.12, or to >805,616.12." This is misleading in all its statements and flatly false in all its propositions, for “by reason of Republican business management” the debt-paying has been advanced, as well as in its conclusion that "the state debt has been reduced >6,715,615.12, or to >805,615.12." The state debt has not been reduced to that extent, an?l it now amounts to >1,289,615.12 as stated in the first part of the plank above. * The first start toward the payment of the state debt was made iby the Democratic legislature in 1889. At that time the state debt had reached the amount of >8,540,615.12, and owing to high interest and small revenues, the state was borrowing money to pay interest. At that time the state was custodian of the public school fund, amounting to >3,904,783, and was paying 6 per cent interest, or >234,289.99 annually on this debt. In his message to the legislature of January. 11, 1889, Governor Gray recommended that this debt be funded at 3 per cent and the money distributed to the several counties pro rata, to be loaned at 6 per cent interest. He said. “This would not reduce the revenues to the school fund, and would furnish a large amount of money to be loaned to the people at a fair rate of interest. The borrower would then pay the interest on the school fund instead of the taxpayers of the state, and the state save on account of interest >117,143.50 each year, a sum greater than the entire expenses of a regular session of the general assembly. For the final extinguishment of the state debt, a tax of two cents on each one hundred dollars should be levied and collected, which tax when collected should constitute a public debt sinking fund to be applied in payment of the public debt under such directions as may be prescribed by law.” In his inaugural address of January 14, 1889, Governor Hovey did not mention state finances, but the legislature adopted Governor Gray’s recommendation, and by the act of March 8, 1889, provided for the issue of >3,905,000 »f 3 per cent bonds, and the distribution of the fund to the counties, as recommended. It did not act on the recommendation for a sinking fund tax, because it was felt that the tax law should be first revised, and that the subject should 1)0 carefully studied before action was taken. In his message to the Democratic legislature of 1891, Governor Hovey gave a statement of the state’s financial condition and the need of some remedy, closing with the words, “Gentlemen, the problem is in your hands, and I trust you may find a way to solve it by just legislation.” The legislature responded by passing the tax law of 1891, which was opposed by Republican members and bitterly assailed by the Republican party in the next campaign. The Republican state convention held June 28, 1892, was presided over by Charles XV. Fairbanks. Mr. Fairbanks was then a private citizen, but he was a corporation man, a railroad lawyer, and was planning to break into the United States senate at the first opportunity. He was indignant about the new tax law, and in his speech to the convention said: "The people of Indiana expect us to relieve them from the cruel and unjust burdens imposed upon them by the Democratic tax law. * * * The present odious tax law is a Democratic measure, passed to rescue the financial credit of the state. * * • I misinterpret the signs of the times if the people do not repudiate the law and the Democratic party at about one and the same time In November next. • • • How long will the patient people endure these things? How long will they elect Democratic members of the legislature who do not possess the discriminating ability to place the financial affairs of the state on a broad and conservative basis and who will not more carefully legislate in the Interest of the people? • • * There Is one way to curs the tax law, and that is to radically revise it. The inequalities can be effectually removed In that way. Tbs platform adopted at the same convention said: “We arraign the Democratic party for enacting an unequal and unjust tax law. We demand Its radical revision.” But it was made plain to the people that the new law made a great advance toward equality in taxation: that it increased the taxes actually paid by the great corporations more than >1,000,000 a year; and that Republican local officials, In an effort to make the law odious, had unnecessarily increased local taxes. • The people Indorsed the law in the election, and it stood the test of assault by the corporations In the Supreme Court of the United States. It has been widely followed in other states. Under the new tax law there was but one increase of the debt, It being necessary to borrow *>300,000 because no tax could be collected under the new law for more than a year after itk passage. But that was not reducing the debt, and in his first report, of December 1, 1892, State Auditor Henderson said* “The aggregate public debt of the state is >8,830,615.12, on which the annual interest is >286,025. We should now begin seriously and earnestly the arduous work of debt paying, before the credit of the state becomes impaired through failure to promptly meet our obligations upon maturity. I am thoroughly convinced that the only certain plan for the extinguishment of the public debt lies In a sinking fund. A tax of four cents on the hundred dollars would yield >600,000 per annum, and at this rate the public -debt could bd entirely wiped out in seventeen years. I also suggest. In this connection, that the state finance board be authorized to apply such balances as may exist in the general fund of the state treasury, not otherwise appropriated, to assist in the liquidation of the bonded Indebtedness as it shall become due.” Governor Matthews indorsed this proposal in his inaugural address of January 9, 1893, saying: “It is not Indispensable that the public debt should be paid Immediately. It was created largely for public buildings and necessities, of which other generations as well as the present will have the benefit, and can Justly afford in part at least, to pay. The debt is drawing but 3 per cent interest, but it 'would cost the people 7 or 8 per cent to borrow the money to pay the taxes necessary to its immediate extinguishment. It is not a large debt for such a state, and its payment is not being pressed. Provision for its gradual reduction and ultimate payment would be quite sufficient. But steps toward this end should not be overlooked and neglected. The surest way to accomplish a reduction year by year in such a debt would be the creation of a sinking fund to be used solely for that purpose, and to be applied as rapidly as accumulated." These recommendations were adopted* and by the act of March 1, 1893 a sinking fund tax of 3 cents was Imposed; and it was provided that unappropriated balances in the general fund might be applied to the payment of the state debt. The effect of this legislation is best seen in the figures from the annual reports of the state auditors, tor the state debt, the annual interest

charge, sad the receipts from the sinking fund tax, as follows, thsN figures I being for October 31: > F.Tear. State Debt. Interest. Sinking Fund. 1892 >8,830,615.12 >286,025 1893 8,490,615.12 275,825 1894 7,920,615.12 257,725 >195,169.80 L , 1895 7,620,615,12 243,725 385,211.69 1896 v. 6,920,615.12 224.225 379.629.07 1897 6,200,616.12 200,925 383,750.60 1898 5,700,615.12 185,925 . 387,638.09 1899 5,187,615.12 170,565 393,229.32 1900 4,704,615.12 156,075 396,878.67 1901 4,204,615.12 141,075 396,043.29 ' 1902....; 2,887,615.12 101,565 405,413.35 1903 2,437,615.0.2 87,865 414,559.70 1904 1,902,616.12 70,590 438,400.64 1905.......«... 1,443,615.12 56,620 457,672.15 It will be noticed that our Republican friends start their claims of debtpaying with 1895 —the first year that the full sinking fund tax was paid—although Governor Matthews held office till January 1, 1897, and although there was no change in the system that had been inaugurated by the Democratic legislatures. But indeed, so far as that is concerned, they have never done anything toward paying the state debt, but pay out moneys provided for that purpose by Democratic laws and required by law to be paid on the debt. The period that they have made the most parade of was the administration of Governor Durbin, covering the years 1901-2-3 and 4. In these four years the debt was reduced from >4,704,615.12 to >1,902,615.12, or a total of >2,802,000. The only Democratic governor In the period was Governor Matthews, whose term covered the years 1893-4-5 and 6. In these four years the debt decreased from >8,830,615.12 to >6,720,615.12, or a total of >2,110,000. This makes an apparent showing in favor of Governor Durbin of >692,000; but note the difference: First—ln Governor Matthews’ four years the total receipts from the sinking fund were >960,010.56; while in Governor Durbin’s four years the sinking fund receipts were >1,654,416.98, or >694,406.42 more. * Second —In Governor Matthews’ four years he paid >1,001,500 of interest; while Governor Durbin, in his four years, paid only >401,095 of interest, or >600,405 less. Third —The payment in Governor Durbin’s time that was materially larger than the sinking fund receipts was in 1902; and in that year the national government paid the state an old war debt of >635,859.20, which was at once applied on the state debt. These three items make a total of >1,930,670.62 that Governor Durbin had of more money to pay with and less to pay ; so that in reality the record of Governor Matthews was >1,238,670.72 better than that of Governor Durbin. In other words, he paid that much more out of the general revenues, and the Republican record of “Republican business management” shows very poorly in the comparison. But that Is not all. In his anxiety to make a show of debt-paying, Governor Durbin not only used all the revenues belonging to his own term, but also encroached on those of his successor, Governor Hanly, who, after pointing to the fact in his inaugural address of January 8, 1905, said: “This condition of the finances will become an actual embarrassment to the treasury before the end of the current year. It can be met only by borrowing money outright, or by anticipating the revenues for the next fiscal year. Debt paying is commendable, but tbe present embarrassment could have been saved by conserving the general fund and applying only the sinking fund to the payment of the debt, especially so as such fund would have been ample to meet the entire bonded foreign debt long before it would have become due. The revenues for the present year have been anticipated to the extent of >529,659.03.” Governor Durbin and Governor Hanly may fight out the question of the propriety of Governor Durbin’s course, but neither one of them has any ground for claims of credit for “business management” in the payment of the state debt, or for trying to take from the Democratic party its just credit for making the extinguishment of the debt both possible and compulsory. A RECORD OF WASTE, MISMANAGEMENT AND DECEPTION. The managers of the Republican state campaign have attempted to gain favor with the people and a continuance of their control of state affairs by talking loudly about their “business management.” These claims have no foundation in fact. On the contrary the Republicans haw> bungled and juggled the state’s business, and have been guilty of gross mismanagement, wasteful extravagance and the rankest sort of hypocrisy. Increased Cost. They have enormously increased the cost of the state government without corresponding returns to the people. Though the taxable property of the state has increased immensely more in proportion than the legitimate expenses of the government, the rate of taxation has not been reduced but has been Increased, and the large revenues thus raised have been recklessly used. Appropriations Double. Nine offices in the statehouse for the expenses of which Democratic legislature appropriated $132,160, received appropriations from the Republican legislature of 1905 to the amount of >297,11?, an increase of >164,952. A Big Deficit. When the last legislature met, after ten years of Republican rule, it faced a deficit of more than a half million dollars and the state’s revenues had been anticipated far in advance. Advance Payments. For the year eliding October 31, 1905, the state had received “advance payments” from the counties aggregating >994,449.03. Without these advances it could not have met its obligations except by an ksue of bonds. Growth of Expenses. The report of the state auditor for the fiscal year ending October 31, 1905, showed that the state’s gross receipts for that year, including the advances, amounted to >9,260,827.07, which was more than >3,000,000 in excess of the total receipts for the last year the Democrats were in power. And yet, notwithstanding its great receipts, the state, under Republican "business management,” lacked nearly a million dollars of being even. Queer "Housecleaning.” ~ Three Republican Btate officials have been forced to give up their offices under charges of misuse of the state’s funds, and for this Governor 4Hanly claims credit, though his actions were marked by unworthy discrimination and favoritism, and in the face of the fact that to gratify a personal feeling he directed the whitewashing of charges of gross mismanagement .against the superintendent of the girls' industrial school and ignored the accusation that an investigation of abuses in the Southern hospital for the insane was another whitewashing performance. Hypocritical Claims. The Republicans claim credit for a reduction in the per capita cost of maintaining the state's benevolent institutions and for the “just, humane and efficient treatment” of the state’s wards. But it should be remembered that the superintendents of the moat Important of these Institutions (not including the girls’ industrial school and southern hospital) are Democrats who have held their positions since the administration of Governor Matthews, and whom the Republicans havejnot dared to displace. Unneeeesary “Legal Advisers.” In the attorney general’s office there are, besides the chief official, four salaried assistants and deputies and an ample corps of stenographers. There is, also, an unlimited appropriation for traveling expenses. And yet the people witness the spectacle of the governor employing at the public expense special legal advisers and helpers for the state to perform services which should be performed by the attorney general and his force. Costly "Experts.” The governor also appointed nearly a year ago two friends as "experts” to Investigate something or other. And though neither of these men had any previous reputation as an "expert,” Governor Hanly fixed their compensation at >25 per day each and supplied other persons to do the actual work—what ever it was or is. So far as is known, all of these men are drawing their pay yet, and up to Sept. 1 of this year the "admitted” cost had reached the sum o* >6,203.44. The above are only some of the things that throw light on Republican “business management” In the state.

State Administration Should be Changed.

For twelve years continuously the Republicans have had the custody of the business and records of the state. It Is known that there has been grave mismanagement and extravagance. It is known that three officials have ben forced to resign. A prominent Republican has been quoted as saying that if the governor wanted to do a thorough job of “housecleanin*'” he should first kick out other officials and then himself resign. Nobody knows the actual condition of the state’s affairs during the last twelve years, and nobody will know until there is a thorough overhauling of the books by competent men. Personal friends and political favorites of the governor who pose as “experts” at >25 per day will not do. It has been grudgingly admitted that they blundered in some things. How often they have blundered where the fact has been concealed nobody knows. Their work seems to be wholly worthless. Perhaps there is no real Intention that It shall accomplish substantial results. Tbe people should put new men in the state house. Turn the Republicans out. They have had unbridled power for twelve years. They have mismanaged and misbehaved. But how much? The truth will only be known when new men—Democrats—are in the offices. Then there will be

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no partisan reason tor mystery or concealment

Is Thievery Ever Sacred?

The Republican campaign text book. Just issued, states in the most positive way, that no changes will b« made in the present tariff schedoles. The book further decares that the "system of protection, as exemplified by the operation of the Dlngley law, is sacred and must be And yet the Dlngley rates were made 20 per cent higher than even the rankest protectionists asked, so that they might be reduced in favor of other tariff countries in return for similar favors. At least that was the explanation made at the time the law was passed. But it was a false pretense. It was a trick to deceive the people and give tne trusts the benefit of the larger “protection" and a chance to charge American consumers higher prices. It was sneak thievery at the inception, but, according to the Republican campaign managers. it has become “sacred."

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