The Wolukau-Wanvec goes on: “When the commission increased government borrowing by converting from centralized borrowing to decentralized borrowing, it also authorized municipalities to set up a Debt Service Fund in which to collect their tax levy for bond principal and interest. The shift from internal financing to independent borrowing meant that one possible fund-raising option open to the municipalities was payment of interest and principal.
Municipals met in plenary assembly annually and any tax proposals of a local character required unanimous consent of those towns present. When a nation competed in the auction, the funds were placed in three national banks, one each in Santiago, Concepción, and Coquimbo, and paid over to the local administration for use in the municipality’s jurisdiction. The interest and sinking fund were kept in separate accounts. From the sinking fund, one twentieth of the entire mortgage was annually applied to canceling the original bonds. To facilitate this fund, a tax on tobacco was established, a consumption tax, and all tobacco tax collections in the country were assigned for this purpose. Collection was placed in the hands of the customs, and municipalities were given the right to their distribution in proportion to their taxes that funded the interest payments.
Llemos added: “No one, unless blind, can ignore the disastrous consequences in which our national development finds ourselves involved today, due in part to our complete desistance from development programs, better efforts, and countless purposes, and due to the