FINANCING THE CAPITAL REQUIREMENTS 263

always available, and the banking system was not properly
organized. The finances of certain states were not administered
 in a wholly satisfactory manner, and as a result public
borrowing came into disrepute. This was particularly true
after the close of the Civil War, when industry and regard
for the future were at a low ebb. Immediately after the Civil
War, Missouri, like many other states, put into effect a plan
for liquidating the indebtedness of the state. The results
accomplished under this plan have been described in a
previous chapter. From the close of the Civil War period
until approximately 1920, the incurring of indebtedness by
the State of Missouri was narrowly circumscribed.
Since 1920 Missouri has resorted largely to borrowing, for
+he purpose of constructing a highway system comparable
with that of other states. The pay-as-you-go principle is
no longer applicable, for it has been recognized that to construct
 an adequate highway system out of current revenues
would impose a tremendous tax burden and would also defer
the attainment of the goal. There was thus a rather sudden
transition from an almost rigorous adherence to the pay-asyou-go
 principle to a policy that has led to the financing of a
large proportion of the capital needs of the state out of borrowed
 funds. It should be recalled, however, that the constitutional
 amendments that have been approved, other than
those which authorized the issuance of soldiers’ bonus bonds,
gave the state authority to borrow only for highway purposes.
On the whole, the restrictions concerning indebtedness still
in force are drastic, and any recommendation involving the
financing of capital needs in connection with other governmental
 functions out of borrowed funds must be predicated
on the understanding that a constitutional amendment would
be necessary before bonds could be issued.

EsTiMATED PRESENT NEEDS FOR CAPITAL ADDITIONS AND
FXTRAORDINARY REPAIRS

Table 82 shows the capital needs of the state as estimated
by the recent State Survey Commission. A comprehensive
survey was made of the various state institutions by the
experts employed by the Commission, and it was found that