The fiscal problem in Missouri

Bibliographic data

Monograph

Identifikator:: 1833271335

URN:: urn:nbn:de:zbw-retromon-230042

Document type:: Monograph

Title:: The fiscal problem in Missouri

Place of publication:: New York

Publisher:: National Industrial Conference Board, Inc.

Year of publication:: 1930

Scope:: xvi, 359 S.

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter IX. Financing the capital requirements of the State

Collection:: Economics Books

FINANCING THE CAPITAL REQUIREMENTS 275 there should be difficulties in obtaining satisfactory con- tracts for the construction work involved. Table 84 is an answer to a hypothetical question that may be stated as follows: What annual sum will Missouri have to raise by means of taxation in order to pay the interest on and to retire $40 million of bonds issued on the same date, bearing interest at an annual rate of 424% on the average, and maturing serially so that the total required in any year for interest payments and redemption will be uniform with all other years during the twenty-year period over which the bonds are spread? The annual sum required would be $3,075,046. Obviously, the amount required for interest would tend to decline, and the amount needed for redemption would remain constant, if the retirements were evenly spread over a period of years. In Table 84, however, the decrease in interest payments and the increase in the amount available for redemption offset each other, with the result that the total available for debt service remains uni- form for each year throughout the period. The result is that the amount of bonds which can be retired at the outset is relatively small, and, therefore, the total required for debt service on an annual basis is greater than the average that would be required if the retirements are spread evenly over a period of years, the interest being regarded as a separate factor. Table 85 has been constructed on the assumption that forty years would represent the maximum maturity for any part of the issue. Otherwise, the assumptions are identical with those underlying Table 84. Obviously the annual amount required for debt service is much less in this case, although it is more than one half as much because of the interest factor. On the forty-year basis, the annual amount needed is found to be $2,173,726. Manifestly, it would not be desirable to issue odd amounts of bonds as shown in Tables 84 and 85. These tables were compiled on the theory that the annual amount needed could best be shown on the basis of a constant requirement for debt service. The amounts shown in the second columns in each table could easily be adjusted to some conveniently rounded number so that the bonds would be issued in multiples of

Access restriction

Copyright

fullscreen: The fiscal problem in Missouri

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation