FINANCING THE CAPITAL REQUIREMENTS 263 
always available, and the banking system was not properly 
organized. The finances of certain states were not admin- 
istered 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no longer applicable, for it has been recognized that to con- 
struct 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-as- 
you-go principle to a policy that has led to the financing of a 
large proportion of the capital needs of the state out of bor- 
rowed funds. It should be recalled, however, that the con- 
stitutional 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 govern- 
mental 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