and as those final assessments are paid the bonds are retired. We issue ten-year bonds, payable one-tenth each year with interest, in the same way as Mr. Warren suggested, and we have so far had no trouble whatever. The interest which is to be charged on the assessments is usually about 2 per cent greater than the interest which the bonds carry. So far we have sold these bonds, which are assessment bonds, but are issued by the city at a good premium. They do not count as part of the bonded indebtedness of the city in connection with constitutional limit of bonded indebtedness, as they are paid by assessments on the property. We have not carried very many of them through yet, but we expect to have in each case some balance on the interest with which we can pay a dividend to the property owners if at the end of the term we find we have enough money left in the fund to make it worth while.

A MEMBER: What rate of interest do you carry?

SECRETARY BROWN: The interest required by the legislature was 8 per cent on the assessments, and the issue of these bonds is at 52 to 6 per cent; 51⁄2 per cent when the bond market was good, and about 4 per cent premium when they sold them.

A MEMBER: The situation at St. Paul is handled in such a way that the contractor is paid in cash. There is a permanent revolving fund created and bonds sold against this fund to 5 per cent of the assessed valuation, which is the limit of the amount of the revolving bonds that can be sold. The assessments against the property are spread over anywhere from 3 to 10 years at 6 per cent interest, and the bonds are generally sold for around 4 per cent, so the difference of around 2 per cent pays the cost of administration of the revolving fund and delay in the collection of assessments. The contractor is paid in cash on the estimate of the engineer as soon as the estimate is completed.

MR. VAIL: In Denver we are practically on the same basis as Portland. We issue improvement bonds which carry 5% interest. The contractor is paid immediately on the completion of the work, without delay. Improvement bonds are issued on the basis of the engineer's estimate, and the final payments are not made to the contractor until ten days after publication of the completion of the work.

SECRETARY BROWN: There is only a question technically of the responsibility for the bonds. In your case the city would. be responsible.

MR. VAIL: Yes; the city assumes responsibility.

SECRETARY BROWN: In our case the property is responsible. MR. BENSON: I want to indorse the statement made by the gentleman from St. Paul. I am from Minnesota myself. We are a city 200 miles north of St. Paul. I am very glad to see the St. Paul man here.

W. W. DE BERARD: In our little town of 10,000 near Chicago (Wilmette) our people want to pay their bills promptly; they do not want a dribbling proposition running over ten years. But our bonds run ten years, and we can not get more than two or three per cent interest on the money paid in by the taxpayer. Our bonds carry interest of 6 per cent, and when we come to the end of the ten-year period we are shy some 31⁄2 or 4 per cent.

MR. WARREN: Mr. President, as I intended to point out in the paper, I feel that always the abuttor should have the privilege, whether he exercises it before the contract is let or while the contract is in process, or after the paving is completed, he should have the privilege of a period of a 30 days' optional payment in cash, or have his property bonded. In my judgment his decision at that time should be final and binding from that period, and unless some scheme is worked out such as has been referred to here I think that the plan of the City of Portland not to determine the amount of its bond issue until the property-owners or abuttors have determined how much of their assessment they are going to have deferred, and then make your final bond the payment of which is guaranteed by the city coincident with the period of the assessment.

MR. SIMPSON: In Columbus we issue general bonds for the city's portion of the improvement. Then for the portion to be assessed we borrow money on short-time notes. This year the interest on those notes will average about 44 per cent. Then when the improvement is finished and the assessment is made the interest on the notes, of course, is added to the assessment. The property-owner has an opportunity to pay the assessment

in full if he wishes to, and quite a number of them do; then for the balance unpaid bonds are issued in anticipation of the collection of those assessments, that is, the portion not paid in full. By this method the contractor is paid in money, of course, and the property-owner has an opportunity to pay in full if he desires to avoid interest charges.

MR. GEO. W. CRAIG: Aside from the financial discussion of Mr. Warren's paper, he brought out one point and that was with reference to improvements of subdivisions, saying that in order to sell the land, or the lots, that it was now necessary in some of the larger cities to improve the streets by the ordinary utilities, such as paving, sewerage, gas and water. My observation is this: That in some localities an imposition is imposed upon the purchaser of the property in the first instance and the city in the latter. These subdivisions have a so-called pavement, whether hard or soft surface, bituminous type or otherwise, which are merely make-shifts. There are certain subdivisions in Chicago and about Chicago where this is practiced to a very great extent, and later on these pavements become very expensive to the property-holder. I have in mind another instance in Cleveland, where a subdivision was laid out some years ago and it became very popular, and the lands were readily sold and the people were readily sold, as far as the pavement was concerned. Today the maintenance charges on these streets are all out of reason. I believe that if the municipality could control the situation requiring these subdividers to construct pavements that are suitable for their needs that it would be a great assistance to the property-holder who pays well for these improvements.

MR. J. C. MCVEA: Mr. President, I might add that the City of Houston's policy is to supervise the construction of all improvements and additions within the city limits in the same. manner that improvements financed by the city on the assessment plan are inspected. We furnish city inspectors who are on the construction continuously. We have all materials inspected in the same manner that the city work is inspected. In that way the purchaser in a new addition is assured of the same class of improvement that he would get if it had been carried out under the city's regular plan of improvement.

MR. CRAIG: I believe that to be true, Mr. Chairman, of many cities, but our city's limits are limited as far as that is concerned, and quite often these subdivisions spring up just outside of the city limits, and a development takes place over which the city has no control. I think you get my point. I really did not refer so much to that being within the city limits.

MR. W. W. HORNER: Before you close this discussion I would like to point out that there is a very radical difference in financing between the plan stated as being under discussion in St. Louis and the one Mr. Tillson says is in use in New York, or that in St. Paul, or the plan Mr. Brown pointed out, similar to the Oregon plan. In all special assessment matters the city is in the position of a corporation doing business on borrowed money, generally doing that on short-time loans, for which they are paying extravagant commissions. In Mr. Brown's, and in the Oregon case they are arranging to borrow that money to better advantage. In the New York case they are practically going back to their stockholders and issuing to them new stock in order to acquire money without borrowing. When they do that they have the funds and the finances are practically in their own hands.

PRESIDENT DALTON: In Dallas we control subdivisions outside of the city limits because they want to connect to our water and sewer system, and unless they comply with the city street paving specifications we don't allow them to connect with the sewer and water.

Chapter X
MISCELLANEOUS

DAY LABOR CONSTRUCTION IN PUBLIC WORKS By J. H. Ellison, Vice-President Associate General Contractors of America, Minneapolis, Minn.

Following the time-honored custom of the preacher, it has seemed to the writer, advisable to begin with a "text." The text is multiple in character and appears to afford a reasonable foundation for what he has to offer.

Extract From the "Platform of the Republican Party," Adopt

ed by the National Republican Convention-Cleveland, 1924. "The prosperity of the American Nation rests on the vigor of private initiative which has bred a spirit of independence and self-reliance. The Republican Party stands now, as always, against all attempts to put the Government into business. American industry should not be compelled to struggle against Government competition."

Extract From the "Democratic Platform" Adopted by the Democratic National Convention-New York, 1924.

"We oppose the extension of bureaucracy, the creation of unnecessary bureaus and federal agencies and the multiplication of offices and officeholders.'

Extract From President Coolidge's Address of AcceptanceAugust, 1924.

"I favor the American system of individual enterprise, and I am opposed to any general extension of government ownership and control."

Extract From President Coolidge's Address at Exercises Commemorating 150th Anniversary of First Continental Congress-Philadelphia, Pa., Sept. 1924.

"If the people lose control of the arteries of trade and the natural sources of mechanical power the nationalization of all