Finance Committee Report Made March 5 1863 Pursuant to Resolution of February 5 1863REPORT
OE
The Finance Committee
OF THE
CITY- OTTleTCII_A,
OF THE
CITY OF DITBITQUE.
;ELuci 5 1863, PURSUANT TO A RESOLUTION OF FEBRUARY 5, 1863.
DUBUQUE :
HERALD POWER PRESS PRINTING ESTABLISHMENT.
1863.
REPORT.
TO THE MAYOR AND ALDERMEN OF THE CITY OF DUBUQUE :
The Finance Committee, in obedience to your order of the
5th ultimo., to report a statement showing the financial condition
of the City, beg leave to report : That they have carefully exam-
ined the records for the past seven years, with the view to ascertain,
accurately if possible, the rise, progress and data of the present in-
debtedness of the City. The result of this examination we respect-
fully submit, as follows :
INDEBTEDNESS IN MARCH, 1856.
E. W. Clark, Dodge & Co. bond, dated Aug. 1, 1852,.. $ 10,000
M. Ahern, bond dated 1st Nov., 1852 2,000
Jesup & Co., 6 bonds; dated July 1,1853, due at different times,.... 20,000
Dubuque & Pacific R. R. bonds, dated July 1, 1855, .... 200,000
Floating scrip, out March 1, 1856, 5,000
Total city debt on March 1, 1856 .$237,000
If we deduct the railroad bonds from this sum ($200,000) we
have, as the city debt proper, on March 1, 1856, $ 37,000
About this time it appears that a spirit of wild extravagance took
possession of the City Council, almost unparalled in the history of
City Governments, of our population, so that in the next three years,
to wit: from the first of March, 1856, to the first of March, 1859,
the debt of the City increased from $237,000 to $900,847, including
railroad bonds, making an annual increase of debt over receipts, of
$221,282. But as we have said that the railroad bonds which are
included iu the above sums, should not in our opinion, be charged as
a city debt, and as the interest had been then paid, we therefore de-
duct the principal of the railroad bonds, $450,000 from the total
debt as reported March 1st, 1859, as follows:
2
Total debt March 1, 1859, ..$900,847
Deduct Dubuque & Pacific bonds, $200,000.
u " & Western " $250,000. 450,000
Total debt proper of city March 1, 1859, ..$450,000
Deduct city debt proper on March 1, 1856, .. 37,000
Tins we have a debt of ..$413,847
created over the receipts in three years, exclusive of the railroad
bonds, and to know the amount expended during those three years,
we have to add the receipts of those threeyears, which were also
expended, and we have the amount of disbursements, including re-
ceipts, as follows :
City debt March 1, 1859 over the receipts, ...$413;847
Received for revenue for the year 1856, .. 90,232
CC CC Cf 1857, ... 186,623
Recipts, " " 1858, .. 111,250
Total disbursements in three years,........ $801,952
averaging $267,317 00 a year, and allowing three hundred working
days to the year, would show an expenditure of $891 00 per day for
the term of three years, which would almost be incredible if the
records did not show it.
We have now showed the rise and progress of the present indebt-
edness of the City, and we proceed to give the data of our future
hopes and conclusions.
DEBT, INCLUDING RAILROAD BONDS, MARCH 1, 1860.
On the 3d of March, 1860, the Finance Committee reported the
total debt of the City to be $888,779 29, made up as follows, to wit:
Outstanding bonds with coupons of various dates and different
times of payment, ..$682,000.00
Short bonds without coupons, but bearing interest, 97,030.89
Interest then due and unpaid, 76,253.36
City currency and scrip outstanding 25,168.91
Other debts due, 8,326.13
Total debt on March 1, 1860, .. . $888,779.29
DEBT ON MARCH 1, 1863, INCLUDING RAILROAD BONDS.
Outstanding bonds with coupons as in 1860, .$ 682,000.00
Interest due on March 1, 1860, 76,253.36
3 years interest, to March 1, 1863, on above coupon bonds, 204,600.00
Average interest on $97,000 short bonds, 22,050.00
Outstanding short bonds March 1, 1863, ... 48,800.00
City currency and scrip outstanding,. 16,047.30
3,500.00
3,950.61
7,250.00
Due James Rowan for Central Market,.
Due Harbor Co. for repairing wharf, about
Other debts and judgments,
$1,064,351.27
Total brought forward, $1,064,351.27
Deduct interest coupons redeemed and special int. paid 81,813.00
Total debt, including R. R. debt, on March 1, 1863, $982,538.27
It will be observed that notwithstanding we have redeemed and
cancelled $48,230 of short bonds, and $9,121 of city scrip and cur-
cency, thus lessening the debt by $57,352, and also redeemed cou-
pons and paid interest to the amount of 881,813, making a total sum
of $139,165, yet the debt has increased in three years $93,758 en-
tirely owing to the interest accumulating much faster than it can by any
possibility be paid; and unless the policy adopted by the resolution
of March, 1860, be adhered to and carried out, the city must inevit-
aby sink under this load of debt.
If we deduct from the city debt of $888,779, as reported by the
Finance Committee, March 3d, 1860, the railroad bonds and about
$50,000 interest then due and included in that report, we would have
a balance of city debt on the 1st of March, 1860, of $388,779 00
CITY DEBT MARCH 1, 1863, EXCLUDING RAILROAD BONDS.
E. W. Clarke, Dodge & Co., $ 10,000
M. Ahern, 2,000
F. S. Jesup & Co, 20,000.
W. W. Corcoran, 100,000
Loan of 1857 (voted), 100,000
Amount of short bonds out, 48,800
Amount of city currency and scrip 16,047
Amount due James Rowan,. 3,500
Amount due Harbor Co., about 3,950
Judgments and other debts 7,250
Interest due and unpaid, about 8,000
Total city debt proper March 1, 1863,
$319,547.00
Reduction of deist in three years,... ,.... ,. $69,232.00
STATEMENT SHOWING THE YEARLY RECEIPTS AND DISBURSE-
MENTS FROM 1856 TO 1862, INCLUSIVE.
Receipts (including about $;89,000 of the loan of 1856), $179,232
Disbursements for 1856, ending March 1, 1857,.... . 162,373
Excess of receipts. $16,859
Disbursements for the year 1857, ending March 1, 1858, $285,416
Receipts, 186,623
Excess of disbursements for the year 1857, ... $98,793
Disbursements for the year 1858, ending March 1,.1859,........ ....$163,908
Receipts " "c cs. u " 111.250
Excess of disbursements for the year 1858,..... .. $51,658
Receipts for the year 1859, ending March, I, 1860,. ...... ,......... $67,258
Disbursements " cc" " 35,041
Excess of receipts for the year 18;59,....... $32,217
4
Receipts for the year 1860, ending March 1, 1864............... $55,239
Disbursements " cc ° " •.. • ..• • • • • 36,484
Excess of receipts for the year 1860, $18,765
Receipts for the year 1861, ending March 1, 1862$23,543
Disbursements c` " ` " • • • • • • • 9,607
Excess of receipts for the year 1861,... $13,936
Receipts for the year 1862, ending March 1, 1863,.... $46,087,16
Disbursements " " " " .. . • • . • • • •• • • 10,786,71
Excess of receipts, $35,306,45
STATEMENT SHOWING THE CITY INDEBTEDNESS
FOR EACH YEAR FROM THE 1ST OF MARCH, 1856, TO THE 1ST OF MARCH 1860, INCLU-
DING THE RAILROAD BONDS AND INTEREST.
City debt on March 1,1857, $487,009
Deduct debt on March 1, 1856, .. 237,000
Increase of debt during the year 1856................$250,009
City debt on March 1, 1858,
" 1857,
$693,463
487,009
Increase of debt during the year 1857, $206,454
City debt on March 1, 1859, $900,847
c 1858, .... 693,463
Increase of debt during the year 1858, $207,384
City debt on March 1, 1859, $900,817
cc c 1860, .. 888,779
Decrease of debt during the year 1859, .. $12,068
At this time the Council determined not to take the Railroad Bonds
into any future account of the City indebtedness. The debt of the
City proper would then stand as follows:
City debt on March 1,1860, $388,779
" cc 1861 364,186
Decrease of debt for the year 1860,.... $24,593
Citydebt on March 1, 1861, . $364,186
" 1862,... ... 344,295
Decrease of debt for the year 1861, .. $19,891
City debt on March 1,1862, .. $344,295
cc `c 1853, 319,547
Decrease of debt for the year 1862. $24,748
04004.
5
RECAPITULATION.
Increase of debt during the year 1856, ...$250,009
" " " " 1857, 206,454
" 1858, 207,384
Increase of debt for three years, $663,847
Add to this the debt prior to March 1, 1856,..
237,000
Amount of debt as reported by Auditor March 1,1859, $900,847
Decrease of debt during the year 1859, $12,068
(t 11 l( " 1860, 24,593
" " " 1861, .. 19,891
" cc 1862 24,748
Decrease of debt in four years, $81,300
TABLE SHOWING THE ASSESSMENT VALUE
of REAL AND PERSONAL PROPERTY OF THE CITY OF DUBUQUE FOR THE YEARS 1867
TO 1862, INCLUSIVE, TOGETHER WITH THE TAX -LEVY, THE AMOUNT COLLECTED,
AND THE AMOUNT UNPAID ON MARCH 1, 1863,
YEAR. ASSESSMENT TAX AMOUNT AMOUNT
VALUATION. LEVY. COLLECTED. Now DUE.
Dollars, Dollars. Dollars. Dol. et.
1857, .11,892,663 118,925 110,497 8 428.22
1858, 7,733,257 112,132 90,524 21,608,81
1859 .... 4,854,002 58,248 ,10,831.99
1860,... 2,618,961 15 47
713 I2 398414 3,315.38
1861 2,648,577 15,891 11 888 4 003.31
1862,. 2,468,860 14,813 10,436 4,377.20
Prior to the year 1860, but a very small percentage of the taxes were collect-
ed in the year for which the tax was levied. In the year 1860, the City Council
passed an Ordinance, allowing 10 per cent reduction on all taxes paid prior to
the 1st of January, next succeeding the assessment in each year; and at the
same time, reduced the rate of interest on delinquent taxes, from 25 per cent
per annum, to 12 per cent, which measure, was thought by many, would rather
encourage the non-payment of taxes; but time and experience has proved the
error of this opinion; and the good effect this measure has had upon the collec-
tion of taxes, will be seen by the following table, which we exhibit for that pur-
pose. We begin with the year 1859, being the year previous to the reduction
system, and it may be taken as a fair average of all previous years.
YEAR. Amount Tax levied. Amount Collected. Percentage Co11.
1859, 58,248 597,00 prior to Jan. 1, 1860, 1 per cent.
1860, 15,713 6,164,00 c` a 40 cc
1861, 15,891 7,190,00 " 1' 45 c`
1862,... 14,813 9,003,00 " ec 60 "
By this exhibit, we see at a glance, the wisdom and propriety of this measure;
the benefits derivedfrom it are not alone to the City government, but the tax
payers generally are relieved, and their burthens lightened; the taxes are paid
more punctually and also much more cheerfully; the burthens of City govern-
ment are more equally destributed, because there is less delinqueney, and the in-
justice of taxing those who pay, for those who do not pay, is avoided.
Your committee take this opportunity to eXpre;>s their opinion, that the same
or a similar system should be adopted by the State and County governments;
the good effects as experienced by the City, could not be less beneficial in these
other departments of government; indeed we can see no good reason why it
would not be equally beneficial ; nor do we see any reason, why, such onerous
and exorbitant taxes should be levied upon the people.
It is our firm belief, that the taxes of both State and County, might be re-
duced to at least one-half of the present rates, and then have a sufficiency for all
the wants of an economical and efficient government; there can be no doubt but,
if the taxes were brought down to a reasonable and just standard, a much larger
percentage of the taxes would be collected without becoming delinquent.
Your committee in thus referring to the State and County matters are not, in
our opinion, stepping out of our sphere. The citizens of Dubuque are also citi-
zens of the State and County, and are as deeply interested in an economical ad-
mintstration of the finances of the County and State as they are in that of
the City.
It should cost the State but little more to govern a million than to govern
two hundred thousand people, and as the State increases in population and in
wealth, the taxes should proportionally decrease; but in this State and County,
it has been we are sorry to say, for the past five or six years the very reverse
of this sound principle.
The State of Georgia with a white population, about equal to that of Iowa,
in the beginning of the year 1860, reported a surplus in her treasury of over
half a million of dollars, and the tax levy for State purposes for several years
did not exceed but one sixteenth of one per cent or six and a fourth cents upon
the hundred dollars; and in our own State. it has been often over and never less
than one-fourth of one per cent or twenty-five cents on the hundred dollars. Now
how is this, that, in two states with nearly equal white population, the people of
one State, are taxed four times more heavily to support its govern ment than the
other.
But to return to City affairs, from this apparent digression. We have be-
fore remarked, that if the policy adopted by the council in 1860 should fail,
and the creditors insist upon the full letter of the bond, it would take nearly one-
half of the property of all the citizens, at the assessment value to pay the pres-
ent debt, and in a few years the accumulation of interest would absorb the whole.
The policy referred to above, was first,. to get released from the payment of
$450,000 Railroad bonds and the interest amounting to $45,000 a year by legal
means if we possibly could. Second, to pay the interest coupons on all other
debts, at one-half the face, or in other words, to reduce the interest from ten per
c ent to five per cent per annum. To this proposition, most of the holders of
coupons assented, and indeed, some of them remarked that we never should have
promised more than five per cent. During the past year, all the coupons have
been promptly paid upon this basis, as they were presented to the Treasurer.
The Railroad bonds never having been considered, by a large majority of the
citizens of Dubuque as a legitimate debt due by the city; they were anxious to
free themselves, by all legal means within their reach, of an incubus which press-
ed heavily upon their interests and prosperity. The City council therefore, in
1860, refused to provide for the future payment of interest upon those Railroad
debts; the City was then sued by the bond -holders, and the action of the City,
has been sustained by the decision of the United States District Court, and also
by a late decision of the Supreme Court of Iowa, in another, but similar case.
7
If the Supreme Court of the United States, where those cases are now pend-
ing shall confirm the decision of the lower court, then our debt though still
large would not be beyond the ability of the city to liquidate, in a reasonable
time, without resorting to heavy taxation, which would be satisfactory to all
concerned. During the past four years the debt of the City has been reduced
say $85,000 principally by economy and the collection of delinquent taxes, and
by proper economy, judicious taxation, and an energetic collection of the reve-
nue, there is no good reason why we should not be able to lessen the debt from
ten to twenty -thousand dollars a year in the future.
Your committee would beg leave to direct the attention of the Council, to a
sum of money which has been for some time in the hands of Mr. Babbage,
hanker, amounting to $1108,20, deposited with him by the late Treasurer, Mr.
R. G. Herron. This money has been garnisheed by Mr. John Blake, and resisted
by Mr. Babbage, on the ground, that he holds bonds of the City and interest
coupons, to cover the amount in his hands.
In the opinion of your committee, neither Mr. Babbage nor Mr. Blake, has
any legal right to withhold this money from the City Treasurer; it is not, an
ordinary, unappropriated sum of money, which might be paid to the first person
having a claim against the city; but, it was collected as special interest tax, and
appropriated for the payment of special interest, and therefore, cannot be right-
fully devoted to the payment of any other debt. Any coupons which Mr.Babbage
held prior to the passage of the resolution of March 3d, 1860, we suppose,
would be liable to be paid to their full amount out of the money in Mr. Babbages
hands, but forany he received since that time, he should be paid as all other
holders of coupons; but in our view in no case can this money be held for the
payment of principal of bonds, nor for any debt, other, than that for which it
was collected and appropriated. The money has never been paid over by Mr.
Herron to his successor, in that ease we suppose the sureties of Mr. Herron are
still liable for the deficiency.
The following statement shows the amount of Orders on the different funds
of the City, together with the bonds and other evidences of the City debt; exa.
mined, cancelled and, destroyed by the Finance committee, from the lst of Jan-
uary 1860, to the 1st of March 1863:
AMOUNT OF ORDERS ON THE DIFFERENT FUNDS.
*City Currency and Scrip General fund. *$157,288 78
Bonds and endorsements on bonds 43,189 41
Orders on Special Interest fund ... 48,679 99
" " Jones Street Wharfage fund 6,080 13
" " Central Market fund ... 6,646 61
cc ccCity Court fund 4,747 04
" " School fund. .. ... 16,612 25
" ccKeutgen fund 16,791 90
" ccCemetery fund 302 03
City Expense fund 18,235 01
Coupons redeemed.... 76,485 00
$395,058 15 •
*Of the General Fund, there were about $90,000 received in 1858 in exchange
for short bonds, and which had remained in possession of the Auditor.
8
The following is a list of property as far as we know,
108 Acres of Island property in front of the City,
22 Lots in Dubuque Harbor Improvement Company,
Interest of City in Center Island,
Central Market and Ground,
First Ward 'Market,
First Ward School House,
Third " " "
Fifth " " "
House of Refuge,
Washington Square,
Jackson Square,
Public Cemetery,
ESTIMATE OF CITY DISBURSEMENTS FOR THE
MARCH 1ST 1864.
Salaries of Officers
Printing and Stationary
Fuel and Incidental Expenses
Interest
Repairs of Streets
Judgment debts say
Total
belonging to the City:
YEAR 1863, ENDING
4,600 00
150 00
250 00
11,500 00
2,500 00
18,800 00
................ 3,000 00
21,800 00
ESTIMATE OF RESOURCES FOR 1863.
Tam for the year 1863 $12,000 00
Revenue from all other sources. 5,000 00
From delinquent Taxes ................... 10,000 00
From Special Assessments 3,000 00
Total
$30,000 00
All of which is respectfully submitted.
P. QUIGLEY,
T. MASON, COMMITTEE,
G. L. MATHEWS,