The news in this publi-
THE UNIVERSITY OF NORTH CAROLINA
SSH SESfiA Sr2S9 ysisasaxrm tsOBoanssi gsgsaiyfu
Pubiished Weekly by the
cation is released for the
University of North Caro-
press on receipt.
Am & » MiKi A 1
Una for the University Ex-
tension Division.
FEBUARY 13,1924
CHAPEL HILL, N. C.
THE UNIVERSITY OF NORTH CAROLINA PRESS
VOL. X, NO. 13
« 3.->aras B. G. Bcanjon. S. H. H-)bb3, Jr.. L, R. '.Vilson. E.jSV. Knight. D; D. Carroll. J. B.BallItt, H. W. Odam.
Entered aa aocond-claaa matter November 14. 1914, at the PostofBceat Chapel Hill. N. C., under the act of August 24. 1911
OUE BONDED DEBT
A WELL-BALANCED STATE
I am sure that all of us whose busi
ness takes them now and then out of
North Carolina have had of late the
experience of being asked a good many
questions about the progress that North
Carolina is making. I have been asked,
as I am sure you have, to describe it,
and to try to account for it, many
times. But the other day I was asked
a new question, that I want to pass on
to you. It was this: “What are you
people in North Carolina aiming to
ward? What sort of a state are you
trying to make?” The question inter
ested me, and I. told him, after due
consideration, that it seemed to me
that what we were trying to do in
North Carolina was to work out the
problem of making a well-balanced
state.
It is a splendid thing for a state to
rank high in this or that line of endeav
or, to be first in this or that item. We
all have a feeling of pride when we
read of the enterprises in which North
Carolina excels. But, after all, it
seems to me that an even sounder test
of the fundamental health of a state,
a clearer answer to the question of its
future destiny, is whether its devel
opment is a well-proportioned develop
ment, whether a balance is. preserved
and a symmetrical development as
sured among the various phases of its
life as a commonwealth. The healthy
man is not necessarily the man with
the biggest biceps «r the strongest
legs. He is likely to be the man of
symmetrical development. And the
healthy state—that, too, isn’t the state
that develops one phase of its life at
the expense of others: it Is the sym-'"
metrical, the well-balanced state. Let
us look at a few facts about North
Carolina with this point in mind.
Agriculture and Industry
In the first place, a healthy’state
ought to have a proper balance between
the great fundamental factors of agri
culture and industry. A state suffers
if it is either without industry or if it
is over industrialized. As a boy, I lived
in a little Massachusetts town that
seems to me, as I look back at it, to
have been a well-balanced community.
There was a good deal of farming,
there were some small industries in the
town and more in the near-by city,
there was no great wealth and no deep
poverty, there, was an old American
stock that had built up the town and
was proud of it. .^side from some
superficial differences, the people were
the same sort of people leading the
same sort of lives ahd adhering to the
same ideals that characterize the old
American stock whether you find it in
Massachusetts or in North Carolina.
But to go back to that village now ^s
for me a painful experience. It has
become a bed-room for a growing in
dustrial city. An alien population from
Southern Europe has overflowed’it and
submerged its life and traditions. The
life that I knew there as a boy becomes
yearly more and more a" thing of the
past. And in hundreds of communities
all over industrial New England that
same process is going on. Industrial
eminence has been won, but a healthy
and well-balanced community life has
been destroyed.
And, on the other hand, in these mod
ern days wherever the work of the
world is so specialized that no man can
possibly live to himself alone, a state
cannot be a symmetrical state if it is
too exclusively rural. One of the most
thought provoking things that I have
read in a long time is an article by a
South Carolina farmer, Mr. Alfred G.
Smith, in the World’s Work for Janu
ary.' He calls his article “Our Over-
Populated Southern Farms.” I do not
know whether all of his cwiclusions
would stand up under cross-examina
tion, but there is certainly good com
mon-sense in the statement that the
rural states of the South suffer heavy
losses because of the immense sums
sent to other parts of the country to
pay for manufactured goods, and th^t
the people of the South suffer because
the payrolls of the factories that make
the goods they consume go to support
Northern wage-earners, not to increase
the opportunities of employment in the
South.
In the’census year the value added
to raw materials by manufacturing
processes was, for the United States
as a whole, $236 per inhabitant. For
the principal southern states, on the
other hand, it was $96 per inhabitant,
or only about a third as much—figures
which show in'graphic form the handi
cap under which the South is; laboring
in this respect.
Now in North Carolina in thlTt year
the value added to raw materials by
manufacturing was$160 per inhabitant,
or $417,000,000 altogether. This is a
little less than twice as much as the
average for the South. North;] Caro
lina leads the South in this field. In
1921, which was an unusually bad year,
the value of its_manufactured products
was $665,000,000, and I have no doubt
that this year it is a billion dollars.
That is the position that North Caro
lina occupies in industry in the South.
Now how does that compare, how does
it balance up, with its position in agri
culture? Well, it is a significant fact,
and one that shows the balance and
proportion of North Carolina life, that,
except for Texas—which has ^so much
land that it cannot well help itself—
North Carolina leads the South also in
this respect. This last year its crops
were valued at 415 millions of dollars,
while those of our nearest competitor
in the South—except for Texas -j-were
valued at 264 millions. We have devel
oped both industry and agriculture to a
high point as compared with our .neigh-
bors—that is what I mean by saying
that the state is developing in a sym
metrical way those two great funda
mentals.
Balanced Urban Growth
Now there is another way in which
our lifejs better balanced than that of
the majority of states, and that is in
the fact that our urban development is
not concentrated in one or two large
cities, but that it. is distributed over
the state in a group of cities large e-
nough to be effective as municipalities
and small enough to be cities of homes
and friends and neighbors. It is a for
tunate thing, I believe, that'there is no
outstanding, dominating, city in ♦North
Carolina, but a group of cities and
towns that merge gradually and nat
urally into their surrounding country
areas, so that we preserve here in an
unusual, and, I believe, highly valuable
way, a balance between urban life and
rural life in.the stale.
this work, with all that it means for
those of shadowed life and narrowed
opportunity. And along with this we
must put what the state is doing for
its institutions for the unfortunate and
defective, for the enlargement of which
the last legislature appropriated two
and three'-quarters million dollars for
the two-year period.
Balanced School Growth
When we turn to the field of educa
tion we find the same development to
ward, a balanced program. The state
has not neglected any phase of its edu
cational life, has not advanced any part
'of it at the expense of the rest. What
the state has done for its institutions
of higher education in the pa^ few
years has attracted wide attention, but
their growth has been not one bit more
rapid than the development of the
state's public school system.-
It is a significant fact that \yhile in
1910 the state was spending $3,000,000
on its public schools, in 192'3 it spent
approximately $23,000,000, or almost
eight times as much. If we take 1900
as a basis, the state is spending 23
times as much in its public schools as it
spent then. The average value of its
schoolhouses has increased in 23 years i
from $160 to $4,500 and the number of
children in the elementary schools has
nearly doubled, while illiteracy has been
cut in two.
The number of high schools has in
creased from approximately 30 in 1900 j debts. Such debts are carried by as-
to 476 in 1923, aird the enrollment in I sessments against property, which is
these schools from 2,000 to 48,831. nPt true of the state debt as the state
There are twenty-four times as many levies no property tax. The property
boys and girls enrolled in the high tax payer, then^carries the local debt
schools of the state today as in 1900. but he bears no part of the cost of
carrying tbe state debt.
lars per inhabitant.
The debt for North Carolina was [dis
tributed as follows: state $34,713,000,
counties $67,012,000, municipal and
special districts $80,986,000.
County and Municipal
It is necessary to divide this total
debt into two classes,-(1) the state debt,
and (2) the debt of our one hundred
counties, ouf fifty-seven cities and four
hundred and fourteen or mo'i’e small
towns, and our innumerable school,
bridge, drainage, hospital, and road
districts. -The debt which falls under
this second division amounted to $147,-
998,000 in 1922. It is made up of
thousands of bond issues voted by the
people on themselves in the various
county, municipal, and. special district
elections over a period of many years.
It represents the sum total of obliga
tions voluntarily assume'd by voters in
the various elections. The money has
been spent locally for the benefit of
the communities which incurred the
debt. The bulk of it has been voted
for the construction of road's, schools,
and city and county buildings.
The interest on such debts, and the
sinking fund necessary’to retire thqm,
are paid by special assessments against
property in the respective counties and
communities. Such debts are local ob
ligations, voluntarily assumed by the
voters concerned and the state govern
ment is in no way involveif in such
cent of our present state debt is car
ried by a tax on property. More than
half of the total state debt represents
the sale of bonds and notes for the con
struction of highways. , This debt is'
carried by the automobile owners of
the state and of other states who use
our roads. The license and gasoline
taxes are more than sufficient to pay
the interest and to provide for a sink
ing fund. Our highway system is self-
supporting,
' The remainder of the • state debt,
which at present amounts to about 3S
million dollars, must be carried by
those who pay taxes into the state
treasury. North Carolina is one of
three states that levy no properly tak
for state purposes, or so in 1922. Car
rying the bonded debt of the state is
a part of the cost of operating the
state government. The cost is borne,
not by taxes on property, but % in
come tax payers, inheritance, license,
and corporation taxes, earnings of the
state departments and so on. In other
words the cost of operating the state
government is borne by those who can
afford it and by individuals and agencies
receiving direct benefits from the state
government, while the cost of local
government is borne almost entirely by
property taxes. •' Carrying the bonded
debt is becoming a large part of the
cost of government, state and local. It
is important to understand upon whom,
in each case, the cost falls.
In conclusion it seems to us that thp
following are the important facts con
cerning our bonded debt:
(1) The real debt of North Carolina
is the debt, not of the state govern
ment alone, but of the state and all of
its subdivisions, county, municipal, and
local. In 1922 the total debt amounted
to $182,711,045, or $69.08 per inhabitant,
and on this basis our rank was 27th in
the United States.
(2) The debt Tails into twu classes,
state and local. The local debt is voted
locally, the money spent locally,- and
the cost defrayed by local property tax
; payers.
I (3) The state debt is voted by the
I Legislature. The money has been spent
for two purposes mainly, roads and in-
Our total state debt in 1922 amounted stitutional enlargement. The road debt
to $34,713,000. At the time the state debt and it
, IS earned exclusively by the automo-
The State Debt
These are amazing figures. North Ca
rolina has built its educational system
logically and wisely—it started at the
bottom and developed its elementary
schools. Then it set itself the task of
ieveloping a atate-wfde system of high ' began its great construction program i bil« owners. The cost "of carryinglhe
schools ' ^ anrinl" l-nroa nnn +Kr. .. ' r .tit.i i
I about three years ago the state debt a- ■ institutional enlargement debt falls c..
And now the great increase in the ' mounted to about 12 million dollars. By • income tax payers, corporations and
System in Our Highways
I turn now to another phase of our
life. We are all proud of the fact that
•North Carolina is doing so much ’ in
building go^ roads. But after all the
significant'fact is that not merely are
we building.,a given mileage of roads,
and spending a given amount of money
to do it, but that we are building in
North Carolina a road system that is
designed to develop in a symmetrical
way the life of all sections of the state.
We have a balanced program in road
building.
Developing Human Resources
I have tried to give you a few illus
trations of what seems to me the well-
balanced way in which our material re
sources are being developed. A state
cannot afford to neglect its human re
sources for the sake of its material de
velopment. This is the most short
sighted of all policies. To develop men
and women—that, after-all, is the great
task of any institution and of any com
monwealth. How does North Carolina
meet that test?
It certainly meets it in the great fun
damental work that it is doing for the
health of its people. The North Caro
lina State Board of Health is known all
over the country as an example of
what a board of health ought to be. Its
work has been of literally incalculable
value to the welfare, the efficiency,
the happiness, of the people of North
Carolina.
Then, again, the work which the
state is doing in the field of charities
and public welfare is by common con
sent the best in the South. The State
Departmen,t under which the work goes
on is generally recognized as the best
organized and the most effective in this
field anywhere in this section. North
Carolina was a pioneer in the South in
number of graduates from these high
schools has made necessary the system
atic development of its institutions for
■higher education~a development not
for one moment at the expense of, but
along with, and as a necessary and in
evitable result of, the development of
its public schools. Here, again, the
the state hasjialanced up its program;
it is developing its educational system
in a symmetrical way.
Coordinate Development
The state, then, is developing its hu
man resources as it is developing its
materiaf resources—it is going steadily
forward in both of these great fields at
the same time, and going forward in a
balanced way.
This, I believe, is after all the thing
that characterizes North Carolina. It
is the coordinated way in which all
phases of its life are advancing—the
Tecognition of the fact that all of
these phases of its life are members of
one great body— a body that is groW'
ing as a human body grows, into a
more and more perfect stature with the
passing years.
And I believe it to be a task of this
body, as of bodies of thoughtful citi
zens all over the state, to see to it that
as North Carolina develops, her devel
opment is not along any one line at the
expense of other phases of her'life, but
that the balance and symmetry which
are evident in her life today shall be
maintained and increased. —President
H. "W. Chase in address before the
Raleigh Chamber of Commerce.
1922, due to large expenditures on payer is not
state-wide system of ,cod scads and i f tSl
for the enlargement of her various in-, form of the State Equalization Fund,
stitutions, the state debt had increased | for instance.
to $34,713,000. At'the present writinc: * increasing very
the total state debt, including bonds-i-/.‘^'^oA^c^nltrtrCd^rsS:
and notes, amounts to approximately j tional enlargement. The counties have
75 million dollars, not all of- which has ; been practically relieved of the neces-
been spent as yet. The debt is (jis-i\?!‘^y°* J,““"“8,'*®btforroadconstruc-
tributed as follows: 12 million dollars ; l‘Tpay?r“Ls'Len ^^ht^^fd!’
of old debt, 18 million dollars of (6) In 1922 the entire bonded debt of
our state, her one hundred counties,
her nearly six hundred towns, and her
innumerable local tax districts was only
bonds and notes for the enlargement
of our state institutions of all kinds,
and 46 million dollars of bonds and notes
for highway construction.
The state debt differs from our coun
ty, municipal, and local debt in that
the former levies no charge against the
general property taxpayer. Not one
slightly more than the property actual
ly on the tax books in Forsyth county*
The real wealth of either Forsyth,
Mecklenburg, or Guilford would almost
be adequate security for the present
net debt of our state and all its sub
divisions.—S. H. H., Jr.
OUR BONDED DEBT
In this issue of the News Letter we
are presenting a table showing the en
tire net debt of each state in the Unit
ed States and all subdivisions of each
state—county, city, town, school,
bridge, drainage, hospital, a:oad dis
tricts, and .so on—per inhabitant for the
year 1922.
The netbonded andother indebtedness
for the state of North Carolina and all
subdivisions of the state capable of in-
,curring debt was $182,711,046 and it a-
mounted to $69.03 for each inhabitant
in the state. The net debt per inhabit
ant was larger in 26 states than in
North Carolina. Oregon led with a
total net debt of $168.36 per inhabitant
while Kentucky came last with a total
debt of only $20.60 per inhabitant. The
average for all the states and their
subdivisions was about ninety-six dol-
BONDED DEBT PER INHABITANT IN 1922
State, County, City, Town, and Local District
Based on recent Census Bureau sheets showing the net ind^tedness per in
habitant of each state and all its subdivisions—county,. city, town, and special
districts. Sinking fund assets are credited against the-total indebtedness.
The totahnet debt for the state of North Carolina and all subdivisions of
the state was $182,711,046.* It amounted to $69.03 per inhabitant and on this
basis twenty-five states ranked ahead of ours. Due to our state expenditures
for roads and buildings our state debt materially increased during 1923. The
counties have been practically relieved of road construction, consequently our
county debt has not materially increased. Our rank in total indebtedness per
inhabitant, state, county, urban and local, has not materially changed since
1922 as there have been large bond issues in practically every state.
S. H. Hob^i Jr.
Department of Rural Social Economics, University of North Carolina
Rank
State
• Net Debt
Per Inhab.
Rank
State
Net Debt
Per Inhab.
1
Oregon
.... $168.36
25
Louisiana
.... $69.18
2
New York
.... 158,16
26 .
Kansas
.... 69.16
3
California
.... 142.62
27
North Carolina
.... 69.03
4
Idaho
.... 135.15
28
New Mexico
.... 67.86
6
Arizona
.... 124.61
29
Mississippi
.... 62.27
6
Washington
.. . 1'20.21
30
Iowa
62.23
7-
New Jersey
.... 116.34
31
Dkfehoma
.... ■ 61.75
8
Ohio
.... 112.40
32
Pennsylvania
... 61.27
9
Montana
... 110.20 •
33
North Dakota
... . 60.89
10
Minnesota
.... 109.99
34 -
Tennessee
.... 60.00
11
Utah
.... 106.85
36'
Maine
.... - 54.90
12
Colorado
... 102.24
36
Illinois
... 64.66
13
Nevada
:... 101.66
37
Indiana
61.23
14
Delaware
.... 98.34
38
Arkansas
. .. 61.03
16 '
Florida
.... 95.94
39
Virginia
.. . 60.90
16
Michigan
... 94.09
40
West Virginia
.... 46.68
17
Wyoming
... 93.02
41 --
Wisconsin
.... 38.81
18
Massachusetts..'...
.... 82.11
42
South Carolina ....
.... 38.22
19“
IVLaryland .
81.43
43
New Hampshire...
.... 37.24
20
Rhode Island
.... 80.43
44 '
Missouri
.... 34.46
21
South Dakota
... 78.09
45
Vermont
.... 34.03
22
Nebraska
.... 73.98
46
Alabama.'.
.... 31.31
23
Texas T
.... 73.72
47
.Georgia
.... 21.57
24
Connecticut
.... 70.33
48
Kentucky
.... 20.60