Voters in the six newly-formed Golden Gate Bridge and Highway District counties went to the polls on Nov 4, 1930 to approve a major bond issue during the depths of the Depression to fund construction of the Golden Gate Bridge. Promises made during the campaign were amusing. This 1930 campaign brochure promised that tolls on the proposed bridge would drop to 25 cents a car by 1960, and transit across the span would be free by 1970. The “yes” vote was 145,697, and 47,005 voted “no.” The bridge also replaced the profitable Sausalito ferry, but the District, later, raised tolls to support an expensive, and unprofitable, bus and ferry system.

The bridge will pay for itself out of tolls. These tolls will redeem the bond issue, pay all interest, pay for maintenance of the bridge and accumulate a vast profit--not less than $17,242,800, within the 40 year period.

It is the consensus of opinion of all who have studied the subject that the construction of this span will increase property values not only in the territory tributary to the bridge, but throughout the entire metropolitan bay area.

The Golden Gate Bridge will eliminate dependence on a ferry system which has reached its saturation point.

The Hyde Street-Sausalito ferry can maintain a headway of about one boat every three minutes, but this requires that additional floating equipment be diverted from other bay ferry lines. The average capacity of the boats is 73.6 vehicles, closely packed. The congestion at the Marin shore due to inadequate transportation across the bay has caused thousands of motorists great delay and inconvenience on Sundays and holidays. The ferry schedules cannot be increased without immense cost and even then the inadequacy of ferries as compared with a Golden Gate bridge is apparent to all.

The Golden Gate Bridge with its six traffic lanes will have the capacity to pass without congestion all traffic that its north and south approaches will deliver.

This will act as an effectual safeguard against any possible overrun in the estimated cost of the bridge, silencing the objection that after the bonds once have been voted, the cost of the bridge will run many millions of dollars above the engineers' estimates.

The financing plan employed by the Golden Gate Bridge and Highway District is the issuance of forty year 5% bonds covering the cost of building the bridge and placing it in operation and redeemed from the earnings of the bridge at five year intervals. The cost above referred to includes the carrying charges during construction.

This plan of financing has been established as the safest and the best. It not only protects the District, but the bondholder is protected as well, because the District guarantees the payment of interest and redemption of the bond. This makes the bond salable at the highest premium and at the lowest possible interest rate. This method is the only method approved by financiers and the only method in use for toll bridges.

Earnings have redemption possible during the twenty-first year of operation, but for better salability the bonds will run forty years. At the end of forty years, the bridge becomes a free bridge and reverts for operation to the State, at the option of the State.

Under this plan of financing, the taxpayers carry no burden. The toll pays for the bridge and also refund the preliminary expense tax. The plan presents a thoroughly tested method of bridge financing, established as standard practice by leading cities and States. It substitutes a users’ tax for a direct tax, and thus not only eliminates bridge taxation but produces revenues applicable for the lessening of general taxation.

The Golden Gate Bridge District as finally formed includes the counties of San Francisco, Marin, Sonoma, Del Norte and parts of Mendocino and Napa.

As the result of a careful investigation the Board of Directors fixed the total amount of bonds to be authorized at $35,000,000. Of this amount $32,000,000 may be issued and $3,000,000 retained as a reserve. The estimated cost of completing the structure is $32,815,000. Thirty-two million dollars face value of bonds with a coupon rate of five per cent will with the expected premium produce an amount in excess of the construction “cost” sufficient to provide a further contingency item.

The policy of the directors will be to award contracts in open competition to the lowest qualified and responsible bidders. The successful contractors will be bonded to insure faithful performance. Under this procedures, unless bids come within the estimates of the engineers, no contracts will be awarded, hence the completion of the bridge within its estimated cost is automatically guaranteed.

This policy, and the reserve of approximately $3,000,000 in bonds safeguards the enterprise against the possibility is often suggested that the bridge may be started and not finished for lack of money, and that additional financing might become necessary.

The foregoing was the procedure followed in the building of the Hudson River bridge in New York, the engineers of which are also the engineers for the Golden Gate Bridge, the contract awards in the case of the Hudson River bridge under-ran the engineers' estimates.

The power to fix tolls rests with the Board of Directors, but the rate of toll is governed by economic considerations as the charges of any public or private service are governed. The toll schedule proposed in the beginning will produce a revenue of 84.3 cents per average vehicle, which is approximately the average toll in effect at the Carquinez bridge and lower by approximately fifteen percent than the present average San Francisco-Sausalito ferry rate.

Tolls will be progressively decreased as earnings warrant to a minimum of 25 cents during the last ten years.

Under the system of financing adopted, the bridge district lends its credit only, and reliance is placed on the demonstrated ability of the toll bridge to redeem the bonds issued to cover their cost. The schedule of redemption set up assumes that retirements will not begin until the tenth year, and then at the rate of only 200 bonds per year, but that this rate is to be gradually increased at five-year intervals until the last five-year period of the term, the rate of redemption will be 2800 bonds annually. At the fortieth year, the bridge having retired its bonds, and accumulated a substantial surplus of seventeen million odd dollars besides, can become free.

The Golden Gate Bridge is based on the most rational of all methods of taxation, namely, the user’s tax. This tax falls only on those who use the bridge. The toll system of payment for the building of the Golden Gate Bridge is not only logical but the most favorable plan of financing from the standpoint of tax immunity and tax relief that it is possible to devise.

Roads, schools and like public improvements are liabilities—public charges. A public toll bridge, on the other hand, is an asset, an income-bearing property, a profit-sharing public corporation, in which each taxpayer in the district is a stockholder and receives annual dividends.

Bridging the Famed Golden Gate [1930]