272 THE FISCAL PROBLEM IN MISSOURI
of the highway system, which has been financed very largely
by means of bond issues, and the failure of the state to
provide for its institutional requirements. Perhaps the
difference is attributable to the fact that in the latter case
financing by means of a bond issue has not been considered.
It is easy to postpone the construction of institutional
buildings on the ground that the revenues are inadequate,
and strict adherence to a non-borrowing policy under such
conditions must in time result in circumstances that will
make it necessary to consider borrowing as a way out of the
difficulty. While it is not always easy to obtain sufficient
current revenues to meet capital needs, there can be no
question that after a bond issue had been floated a state
enjoying a credit position as excellent as that of Missouri
would meet the necessary payments required for debt ser-
vice. In other words, strict adherence to a pay-as-you-
go policy may result in a considerable degree of pro-
crastination, while payments for debt service may be pro-
vided without great difficulty. That such is the case in
Missouri is indicated by the rather sharp contrast between
capital provision for highways and that for penal and
eleemosynary institutions.
Revenue NeepeD UNDER Pran or Bonp Financing
The discussion in this section is based on the assumption
that Missouri will seriously consider the issuance of bonds
in the amount necessary to finance the present deficiency in
institutional and other capital needs. The computations
which comprise Tables 84 and 85 are based upon the amount
of $40 million.! These computations, however, are just as
applicable to any other sum as they are to $40 million. For
example, if it is decided to issue $20 million or $30 million
of bonds, all that is necessary to obtain a picture of the
amounts required is a proportionate reduction of the
amounts shown in Tables 84 and 85.
If bonds are issued, the period of maximum maturity will
probably not be less than twenty years nor more than
forty years, and Tables 84 and 85 have been compiled on the
1 See Appendix B.
