COST OF GOVERNMENT IN MASS. 



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shifts of towns from one group to another, the rate of increase has been much 

 greater for the towns than for the cities. 



Municipal indebtedness has been increasing at an average rate of nearly 

 $4,000,000 each year since 1910. Most of this increase has been in general pur- 

 pose loans for cities and towns. The State debt, both general and contingent, 

 was less in 1926 than in 1910. 



Table 49.— Net Municipal and State Indebtedness, 1910-1926. 

 (Thousands of dollars) 



Causes of the Increase in Public Indebtedness 



The war caused a temporary increase in State debt and a temporary drop 

 in municipal debt. Since 1919 the net direct State debt has been reduced by 

 more than one-half, while the municipal debt has increased about 50 per cent. 

 Before the war the annual average increase in net municipal debt was about 

 $5,000,000; since 1920 it has been more than $13,000,000; while during the war 

 there was a decline. The increase has been due to the same factors that 

 caused the increase in all public expenditures. 



Considering the rise in prices, the total increase in indebtedness has not 

 been excessive. In terms of 1913 dollars, or in purchasing power, the average 

 annual increase in public debt since 1915 has been less than from 1910 to 1915. 

 On the same basis the large loans from 1920 to 1925 did not make up for the 

 preceding five-year period when few new loans were made. 



One method of measuring indebtedness is the ratio of net debt to assessed 

 valuation, provided assessed valuation is comparable to real valuation. From 

 1910 to 1926 the ratio of net municipal debt to valuation dropped from 4.31 

 per cent to 3.88 per cent. From 1920 to 1924 the ratio increased, but apparently 



