FINANCING THE CAPITAL REQUIREMENTS 271 
long way toward preventing the state from having an 
accumulated deficiency of any size in the future. In out- 
lining such a plan, it should be recognized that over a period 
of time, a certain per capita expenditure for penal, eleemosy- 
nary, and other institutions will be necessary. Although 
there will be variations in annual capital expenditures for 
these purposes, the development of such a plan should lessen 
the possibility of having to finance an excessive outlay in any 
one year or during a short period, since the plan should 
provide for sufficient income to meet the ordinary needs of 
the state for these purposes. 
It should not be assumed that a bond issue would neces- 
sarily involve a definite departure from the pay-as-you- 
go principle in financing capital needs other than for 
highways. On the contrary, the pay-as-you-go policy may 
be desirable in the long run, though it may not be ap- 
plicable to a situation such as that under consideration. 
Also, regardless of whether the state desires to continue on 
a pay-as-you-go basis or to return to it as soon as the 
present bond financing is completed, it does not follow that 
the capital needs of the state can always be met satis- 
factorily in the future without resort to borrowing. Rapid 
changes of a social and economic nature often cause an in- 
crease in institutional needs that cannot be foreseen. When 
such is the case and it is recognized that the need is a real 
one, strict adherence to a non-borrowing policy may only 
mean a postponement of the capital outlays until conditions 
have become almost intolerable. 
The present instance is a good example of the inade- 
quacies of financing capital improvements out of current 
revenues, to the exclusion of receipts from borrowing. It 
has been shown that on a per capita basis Missouri’s ex- 
penditures for institutional needs have been exceedingly low. 
The constitutional limitations make it impossible to borrow 
considerable sums for such needs, the assumption being that 
they will be cared for out of current revenues. The con- 
struction of a new governor’s mansion, which has been 
needed for many years, and of a needed administrative office 
building has also been deferred because of such limitations. 
There is a sharp contrast between the rapid development