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FOREST TAXATION IN THE UNITED STATES 335 
term for which bonds may be issued, limit the purposes for which 
indebtedness may be incurred, prevent borrowing in excess of immedi- 
ate needs, provide.for maintenance of sinking funds already estab- 
lished, and compel local units to bear from current revenues a part of 
the cost of capital improvements. ‘The effect of this rigid supervision 
has been to improve the credit standing of Massachusetts municipali- 
ties and other local subdivisions, as evidenced in the low rate of interest 
at which they may borrow money (114, pp. 17-18). Administrative 
supervision in Massachusetts dates back to 1910, but not until 1921 
were all special acts relating to particular jurisdictions (except those 
relating to the city of Boston) repealed and the general statutes made 
of universal application. 
In New Jersey the commissioner of municipal accounts has the 
power to compel local units to maintain adequate sinking funds and 
meet debt maturities with promptness. This official also may 
exercise discretionary authority over temporary loans in anticipation 
of taxes (114, p. 18). 
Discretionary supervision over local bond issues is exercised by 
State administrative agencies in Indiana, Iowa, Michigan, and 
North Carolina. In Indiana and Iowa a small number of citizens 
may petition for State review of a proposed bond issue in the same 
manner as they petition for review of a budget. The decision of the 
State agency is final, both as to the expediency of the bond issue and 
its amount and terms. 
In Michigan the procedure and limitations under which counties, 
townships, cities, villages, andl school districts may issue bonds is 
outlined in great detail by statute. Before any such subdivision may 
issue bonds, the officer having charge of its financial records must 
transmit to the State treasurer a sworn statement showing the dates 
of issuance, purposes, amounts, and maturities of all bonds or other 
indebtedness outstanding, the assessed valuation of all taxable 
property, the total amount of general taxes and special assessments 
falling due during the preceding fiscal year, and the amount of such 
taxes and assessments delinquent at the time of making such state- 
ment, the condition of all sinking funds, and such other information 
as the State treasurer may require. If the treasurer finds that the 
issuance of the bonds will not violate the provisions of the State 
laws or cause the debt to exceed any constitutional or statutory limit, 
he so certifies to the local subdivision. No bonds may be issued until 
such certification has been made.? 
Even more drastic than the Michigan law is the one enacted by the 
North Carolina Legislature in 1931.* It creates a local government 
finance commission consisting of six members appointed by the 
Governor, with the State auditor, the State treasurer, and the com- 
missioner of revenue as ex-officio members. One of the appointed 
members is designated by the Governor as director of local govern- 
ment. He acts as secretary of the commission and has many inde- 
pendent functions and powers. 
Under the provisions of the act no bond or note of a municipality, 
county, or other political subdivision shall be valid unless approved 
by the commission. Neither shall the commission approve any bond 
or note until it is satisfied that the issue is necessary or expedient and 
3 Michigan, Public Acts, 1925, act 273, amended 1931, act 142. 
4 North Carolina, Public Laws, 1931, ch. 60. 
