270 THE FISCAL PROBLEM IN MISSOURI

and public school buildings. Of this amount, the $2.1
million for public school buildings could be excluded from
the program of capital financing if it were decided to
provide for this form of aid, along with other forms of
state aid to consolidated districts, out of current revenue.
An important phase of the problem of capital financing
grows out of the need for certain vital adjustments that
seem necessary in the revenue system of the state! An
attempt to finance a large amount of capital needs out of
current revenues, before or during the time when important
changes in the revenue system, particularly in the administrative
 machinery, are put into effect, might readily bring
about an increase in rates of taxation out of proportion to
the actual requirements. A greater degree of equity can
be obtained if the capital needs are financed by means of a
bond issue, since it will be possible to make the adjustments
in the revenue system before a large part of the funds necessary
 for debt service are raised.
The conclusion that a bond issue represents the most
logical solution of the problem of financing capital expenditures
 that are in the nature of an accumulated deficiency
has not been reached without considering all angles of the
problem. The excessive use of credit is not commendable,
and Missouri has been conservative in using its credit resources
 to provide capital facilities. A credit position has
been maintained which would enable the state to borrow at
favorable rates should the exigency arise. At the present
time the only outstanding indebtedness of any consequence
 is that incurred for highways and the payment of the
soldiers’ bonus, and ample provision has been made to
service this indebtedness.
If the bond issue plan of financing the present capital
requirements were adopted, it would be desirable to develop
a workable plan of financing the capital needs that may
develop later. It is obviously difficult to determine in
advance just what capital requirements will be in evidence
a number of years hence. In formulating such a plan, not
all factors could be taken into account, but it should go a

1 The adjustments in the revenue system referred to are considered in detail in
Chapter XI.