Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1876-07-28

drawings, paying four per cent. interes
on the bonds drawn, using not leas thai
Sl4O,OOO yearly for the first ten years
S15O,OOO foI the second ten years, aDC
Sl6O,OOO for tbs last ten years. In ex
pianstioD, for the first year draw IOOC
from the 333 333, the whole number o
bonds. Pay them. To do this will tax
SlOOO0O. Pay the interest on them al
! four per cent. To DO this it will take
$4,000. Then S104, 900 will have been ex.
| pended in the payment OF the lOOC
bonus and the four per cent. interest on
the same. By deducting this Sl04 0OC
| rom Sl4O,OOO, the sum intended to be
used annually for the first ten yearR
| l! leaves S36, 600 unexpendeds
With this amount as sink
ing fund, go into the
market and purchase 679 at So cent?.
Oar bonds are now worth about 40 cents
on the dollar, 6ut, having scaled them
One-third, IL cents have been added to
their marketable value. This price is, of
course, cOnjectural, but believed to be
apprOximately accurate Then, having
drawn 1000 bonds, and bought 679 bonds,
the two added together make 1879 bonds
retired, the value of which is $167, 800.
Add to this $4,000 interest paid on the
IOOO tonds drawn, make $l7l 900 OF the
city's debt retired the first year with
SAC, 600. Now, the operations of the
plan may be illu)trated again. For in
stance, on the second year draw $50
bonds; but there are two years. interest
on these, that is s per cent. Multiply $50
by per cent, and it gives $1,000 as the
Interest on these bonds. Add this
to $95 600, the value of the bonds,
and we have the sum Of $lO2, ,6C0
Deduct this amount from $40 900. the
sum to be annually expended the first
ten yeas, and we have $37, 400 as q
sinking fund, with which we buy at SEC
667 bonds. Add the 667 to the $50
Drawn, and We retire 1917 the second year.
AS there are about two million of the
city's bonds which run inward oftwentv
years, il is believed that this scheme will
be OF mutual benefit to the holder and
the city. In the first place, the bond is
getting lower every year under the pres
ent inability OF the city to pay out, and
selling for 4Oc on the market. This DIsn
holds out inducements to the bond
holder, because, by its terms, his bond
drawn would be secured to the value of
665ci with per cent. interest added, the
payment OF the face value OfWhich may
De anticipated by as many years as
the present bonds now have to run.
AT ali events, as to the payment of the
present bonds, which have twenty years
to Iun and upward, if placed in this
scheme the probability is that they are
twenty times as likely to be paid bsfore
their maturity. Now they cannot pos.
slbly be paid until they mature, but un-
der this plan they may ba paid the first
year, or any succeeding year prior TO
their maturity. This scheme, while in.
voJvirg to certain extent chance,
does not involve any lottery within the
prohibition of law. The principle is this:
You owe twelve men 800 each with the
interest on their respective claims. You
say to them, 81 can only pay six of YOU
in full at present." hut which six, YOU
may designate by placing their numbers
IN hat, and the first six drawn out are
paid, pOstpOning the other six to some
future time. These parties get simply
what they are entitled to, nothing more
or less. This, of course, is done by pre-
Vious agreement OF the par
ties who are creditors. A lot
terry implies the risk of a
small sum for the chance Of obtaining a
greater one. But here the parties get
nothing more than their dues. OF course
1t is necessary for the legislature to pass
q bill granting authority to the city to
enter into this cheme. 1t is proposed
that the act Of the legislature eOnferring
this authority will so limit the city so as
not to exceed a certain taxation, the OBJ
ject being to prevent municipal extrav-
agance; and, e1 before stated, it is pro-
posed that these bonds, when drawn,
shall be receivable for all city dues and
taxes, and that sufficient tax shall be
annually levied and collected to raise
the anoun'3 indicated, to be applied to
the retirement Of the city's Gebt, and
that the strongest guarantees are to be
given that such will be applied to the
objects proposed. Moreover, that these
provisions shall be made part OF the
contract with the holders Of these bonds,
unaffected by any subsequent legisla-
ton; and that in the meantime, and
until after the session of the next Iegis-
lature, the creditors who go into this
scheme will suspend the collection of
their claims.