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cause of the cost to them and have elected
in lieu thereof to go the route of their own
25-year bond issues where their amortiza-
tion costs were lower?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: There have been
some counties and there will be some
counties if 25-year bonds are authorized
that will not be able to afford the 25-year
limit. Where do you stop, sir?
THE CHAIRMAN: Delegate Willis.
DELEGATE WILLIS: Delegate Stern,
could you name any counties that are now
selling' school bonds for a term longer
than 25 years?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: No, I do not have
the figures.
THE CHAIRMAN: Delegate Willis.
DELEGATE WILLIS: I do not believe
there are any.
THE CHAIRMAN: Are there any fur-
ther questions?
Delegate Armor.
DELEGATE ARMOR: Just one ques-
tion of Delegate Stern.
Several bankers appeared before the
State Finance Committee. Did one of those
bankers say his bank was not interested
in buying 15-year bonds?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: I believe there
was one banker who said that and I don't
think that was the same banker I quoted
that said they had no trouble selling 15-
year bonds.
THE CHAIRMAN: Are there any fur-
ther questions?
Delegate Weidemeyer.
DELEGATE WEIDEMEYER: Delegate
Stern, we have been hearing about county
bond issues. These provisions here, as I
see them, apply only to state bond issues?
THE CHAIRMAN: Delegate Stern.
DELEGATE STERN: That is correct,
sir. I found that letter and I wish to quote
from this letter from the Legislative Coun-
cil signed by 14 members. The last para-
graph reads: "It was the unanimous opin-
ion of this Committee that there should be
no change in the present arrangement of a
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15-year term for bond issues. The Commit-
tee wished to go on record with your Com-
mittee in that regard. Sincerely yours",
signed by the 14 members.
THE CHAIRMAN: Delegate Bennett.
DELEGATE BENNETT: If you have a
moment, Delegate Stern, perhaps you
would elaborate a little on that philosophy
as to why there should be no bond more
than 15 years. In that connection perhaps
you would tell me why this generation per-
haps that authorizes these bonds should
have to pay off for an asset which our
posterity will enjoy.
THE CHAIRMAN: The Chair will per-
mit the question but cannot refrain from
pointing out the question period is for
purposes of clarification and not debate.
There will be a debate period.
Delegate Stern, can you answer the ques-
tion briefly?
DELEGATE STERN: No, sir. The last
generation paid for what we are using and
we are paying for it by maintenance costs.
The current generation will use it and pay
for it while they are using it and the next
generation if they want to use the asset
will have to maintain the assets. It is well
known that the asset wears over the years.
The tile wears out on the floors, windows
get scratched badly and have to be re-
placed, air-conditioning, if it is not put in
as it was not put in many buildings, if we
want to use it must be put in. Heating
units go. These are vastly far more costly
than the costs of the buildings themselves.
Not also included in this general construc-
tion are movable partitions, room sizes
change, if you are not satisfied with the
small cubicle you have when government
changes and the office changes the walls
must be torn down, rebuilt, reshaped to
make room for larger ones. As the years
go on these maintenance costs increase and
they are paying for it. Why should we pay
for their use now when if you do it that
way they will get benefit of both?
In a 25-year bond of $1 million at the
15th year less than half the principal has
been paid off so that from the 15th year
to the 25th year those people in that last
10 years are paying $535,000 in principal
off. They are paying double for it. This
is what you are throwing upon your chil-
dren and your grandchildren.
Mr. Chairman, one more. Knowing your
interest in preserving the record I have
had a color photograph and black and
white photograph taken of my chart which
I will give to the journal clerk.
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