Constitutional Provisions Governing State Borrowing

The power to incur public debts is one which may have a vital influence on all governmental services. Since borrowing is often the easy way out of a difficult financial situation, the state's credit must be jealously guarded against abuse by the unscrupulous, the inefficient, and the over-ambitious. As a result of their experiences during the nineteenth century, most of the states in this country placed constitutional restrictions upon the use of the state's credit. But despite limitations many states have contracted large debts during the past twenty years, and several of them have been embarrassed by debt problems.