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VALEDICTORY ADDRESS.

ized but not issued on the theory that money must be borrowed for work begun during the period in question, it is necessary, of course, to omit all loans intended to pay for work which has not yet been ordered, and which may therefore not be undertaken, and to deduct all moneys borrowed during the period to complete works begun before it. If such a calculation were made at the present time, we should begin with an actual increase in the net debt of $5,410,367.44; add to it the amount of loans not yet negotiated needed to defray the cost of work to which the city is actually committed through the acts of this administration, namely, $7,440,000, and deduct the $9,140,000 borrowed on account of work previously ordered. This calculation would result in an apparent increase in the net, delt of $3,740,367.44.

A still more complicated calculation might be made by taking into account the cash on hand derived from loans at the beginning and end of the period in question.

But these calculations are unending, and, to a great extent, misleading. The important point is the actual increase or decrease in the net debt is it appears upon the Auditor's books; and if further considerations are to be taken into account, it would appear to be sufficient to scrutinize the purposes for which bonds have been issued during the period

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new to refrain from borrowing money as soon as authorized. This, however, is not the case, as probably no date could be picked out for many years on whiclı the city did not have the right to borrow a large amount of money on account of loans not then negotiated. Thus, the amount of loans authorized but not issued, on December 31, 1872, was $4,077,000, without counting the loan of $20,000,000 to rebuildl the bunt district, which was subsequently declared void by the courts; $4,086000 on December 31, 1877; $3,298,500 on December 31, 1882 ; $789,000 on December 31, 1890 ; and so on. 1 North End park

$150,000 Hospital

300,000 Bridge

740,000 Subway

4,950,000 Columbus avenue, etc.

1,300,000

$7,440,000 2 The cash on hand derived from loans December 31, 1890, was $3,480,401.38, and on December 31, 1894, $2,029,084.52.

in question, and to consider the character of those unexecuted projects to which the city has been committed by the acts of the administration in question.

SECTION 5. Loans issued since January 1, 1891. The use made of the city's credit during these four years is shown in the following table, which gives the purposes for which bonds were issued between December 31, 1890, and December 31, 1894:

LOANS ISSUED BY THE CITY OF BOSTON BETWEEN JAN

UARY 1, 1891, AND DECEMBER 31, 1894.

(Exclusive of temporary loans in anticipation of taxes repaid during the

fiscal year.)

Cochituate Water-Works
Sewers..
Improved Sewerage .
Stony Brook
Paving, Street Construction, etc..
Street Widenings, Extensions, and Changes of Grade.
“Laying Out and Construction of Highways
Bridges and Tunnels ...
Rapid Transit and Charlestown Bridge
Parks..
Public Grounds.

$1,575,000 SECTION 6. Means of keeping the Debt down. In view of the steady increase in the city debt, it should be the aim of every administration to keep it from expansion except for absolutely necessary purposes, and to adopt every proper method of reducing it.

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457,860 300,000

68,000 1,957,910

SS2,500 1,500,000 343,300

60,000 4,775,000

100,000

Public Buildings and Sites:

Suffolk County Court House.
School-houses and Sites..
Fire Department
Police Department.
Public Institutions.
City Hospital...
Board of Health
Public Libraries.

$521,000
1,773,025
175,000

25,000 804,500 778,500

50,000
1,041,000

Ferries
Quincy Market.
Department Deficiencies of the fiscal year 1890-1.
Tug-boat for Sewer Division

5,171,025

53,000

10,000 340,000 25,000

.

Total...

$17,618,625 1 $894,163.77. See Appendix, Table 24.

A vigorous and fearless use of the veto power is necessary. During the past four years 241 loans or items in loan bills, involving an aggregate expenditure of $2,683,375, have met with executive disapproval.

Applications to borrow money outside of the debt limit, whether emanating from the City Council or members of the Legislature, have been consistently and successfully resisted, if the effect of granting them would have been to increase the real burden of indebtedness; except in the case of the Park, Library, and Court House Loans. The loans for these purposes had from the beginning almost been authorized outside of the debt limit. The street construction law of 1891 also authorized the issue of bonds outside of the debt limit; but as that act was originally drawn, no increase in the net debt could arise from its operations. Whatever increase has taken placel in the net debt due to the issue of loans for the "laying out and construction of highways” is the result of the action of subsequent Legislatures in amending, against my protest, the financial provisions of the original law. These provisions ought to be restored, and no more suburban streets should be built at public expense. A large loan outside of the debt limit has also been authorized for the construction of the subway; but if this project is properly carried out, it should not result in a permanent increase in the city debt or in any permanent burden upon the taxpayers. It ought to be a self-supporting investment. Water loans have also been issued outside the debt limit; but the water-works are now upon a self-supporting basis, and the net water debt is less than four years ago.

I see no reason for requesting or authorizing any further loans outside the debt limit.

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No loans have been issued for current expenses during the last four fiscal years.

The use of the city's credit for trivial or perishable objects has been discouraged; the object consistently kept in view in the exercise of the borrowing power of the municipality having been to restrict its use to objects of permanent, admitted, and general utility.

The net delt of the water-works (Cochituate and Mystic) has been reduced by $967,988.06;2 and if the present theory of management is adhered to, there is no reason why there should not be it very material reduction in the water debt during the next ten years, notwithstanding the necessary construction of expensive storage

basins on the Sudbury water-shed.

All proceeds of sales of land should be turned into the sinking-funds, or devoted to purposes for which otherwise money would be borrowed. Since 1890, $430,022.21 has been realized from the sales of land, of which $110,833.88 was paid to the ('ommissioners of Sinking-Funds;$144,977.97

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I LOANS FOR CURRENT EXPENSES

Such loans have beca frequent in the history of the city. Sce Mayors' inaugurals in 1835 and 1855. The ageregate amount of the department deficiency loans since 1822 is $3,281,133.53, besides wliich a large part of the loans entered simply as "miscellaneous," amounting to $3,763,353.97, were probably issued for the running expenses of the government. Of the deficiency department loans, $1,628,439.30 was issued between the limitation of the tax rate in 1885 and the commencement of the fiscal year 1891–2. It should be noted, however, that these last-mentioned loans were not all for strictly current expenses, and it is quite likely that the loans entered in the earlier reports as miscellaneous or deficiency loans were partly for permanent improvements. Since the limitation of the tax rate in 1885, out of the total amount of money borrowed to make up department deficiencies, - namely, $1,628,489.30, — only $1,344,632.10 was really for the current expenses of the government, the rest having been used to make good transfers from department appropriations for buildings and other permanent improvements.

The law of 1891 (chap. 206), prohibiting tlie borrowing of money for current expenses without the certificate of the Mayor that the loan is in his opinion necessary, has been a great help in preventing the City Government from issuing such loans. No occasion has arisen since the passage of this law which, in the opinion of the Executive, calleci for a certificate that a loau of this character was necessary.

Dec. 31, 1890. Dec. 31, 1894. ? Net Cochituate debt.

$10,391,743 77 $9,113,032 90 Mystic

19,277 19

$10,+11,020 96

$9,143,032 90

Total * See chapter 18, $$ 3 and 4.

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VALEDICTORY ADDRESS.

was used for school-house sites, buildings, and furniture; and $144,210.36 was treated as general revenue. Since early in 1893, all proceeds of sales of land have gone into the sinkingfunds. Down to 1870 it was provided by ordinance that all such moneys should be used to pay the debt; but from that year to 1893 they were subject to the order of the City Council. In 1893-4 and 1894-5 the general appropriation order provided that such receipts should be credited to general revenue or paid over to the sinking-funds, as the Mayor and Auditor should determine in the last two months of the fiscal year. In these two years they have in fact been covered into the sinking-funds.

Besides the act prohibiting loans for current expenses, the Legislature has contributed to a sounder administration in respect to the use of borrowed money by authorizing the Treasurer to keep a general loan account, and by prohibiting the City Council from making transfers from one department to another, except upon the recommendation of the Executive.3

SECTION 7. Loans to be authorized in 1895. Besides the special loans already authorized but not issued, the city has a general borrowing capacity of $2,509,074,4 of which use can be made during the coming year to provide reasonable additions to the school accommodations of the city, to furnish a few more buildings for the Department of Public Institutions, to enable the City Hospital to procure the rest of the land between Massachusetts avenue and the building for out-patients, and to complete certain features of the park system.

A further loan of $747,162.91 can also be authorized for street improvements and sewers, under St. 1891, chap. 323, and amendments.

SECTION 8. Analysis of City Loans. The loans issued by the city of Boston have been analyzed and tabulated, with the following result:

1 St. 1891, chap. 206. 2 St. 1893, chap. 192.

s St. 1893, chap. 261. 4 As of January 1, 1895; reduced to $2,337,074 by the loan order approved January 5, 1895.

Sce Appendix, Table 24.

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