The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1879-06-26

City Finances.
We published last week communication
signed sc. o. D., in relation to the sale {
city b onds, and alleging that $1,000 six pc
cent. bonds had been placed, privately, a
IS cents on the dollar to pay for the old W
+. Institute building and renodeling TIT
Grange Hall. Our correspondent based MI
remarks upon what was currently beiieset
to be a fact. 1t was opportune that the COM
| municatioH appeared, as it affords occasion
for removing Misrepresentation as to the ma
turc OF the transaction in the purchase OF the
building in question:, land also gives an excuse
for presenting the entire city indebtedness,
and the manner aud conditions of its crea-
ton. The fact is, as to the purchase OF the
school building, it was stipulated to be paid
in bonds at par and payment was so made
Ii these bonds were sold at less than par ii
was not the work of the city authorities, as
they had 10 part. in placing them on the
mar et. The market value of the bonds, as
indicated in sales effected by parties hold
| ing city securities, has not been under the
control Of the city, and could not be regulat-
ed by her representatives. The bonds we're
issued under contract, in most instances, and
discharged obligations equal to their face value
and If those coming in possession of parties
them deemed it advisable, either from choice
or necessity, to dispose OF them at dis
count, the city had no power TO prevent it.
Below will be found statement of the
debt, for what it was created, and how ap-
piled:
Bonds Paid out at par By Contract Of Coun-
cH:.
B. Crawford land and water right. $4,000 90
Old certificates Town of Staunton 1900 90
Stock in Valley Railroad ........,... 100000 90
Hushour house and lot................ 1900 90
Dof1aghe purchase for water, &c.. IL, 1000 90
Il. G. Bickle land and water right 2,70O 90
Adjustment;of int't'of V. r. r.. 4,966 10
Purchase of W. F. Inst. building. $500 90
10 fund old debt of Staunton...... 800 90
Street improvements. .................. 1890 90
New water works...................... SO,OOo w
Witt & Holt lot-........................ 5000 90
Aggregating ..........."............S25O 1866 10
which have been issued, under CONTRACT, at
par to meet the obligations assumed in the
cases men toned.
There have been issued $4,000 per cent.
bonds, to improve and pay for City Hall,
1000 of which were sold by the Finance
Committee to the Sinking Fund at SO cents,
giving the city the benefit Of the pur-
chase, instead Of purchasing from parties
who held some of the bonds issued to the
Valley Railroad. and were Offering them at
so Ecents. The remaining $4,000 of the
$4,000 above mentioned was turned over
to the Committee on Public Grounds and
Buildings, some Of which have been sold at
so and s. cents, at a time when city bonds
of equal dignity, held by parties who had
gotten them from the railroad company,
were offering them at the same price. The
price. Others holding bonds which had
been issued at par and were anxious to dis
pose OF them, fixed the rate, and in order to
realize needed money, the authorities had
to be governed by the market so regulated.
SIS 500 s per cent. bonds were issued to
pay for the land donated to the Chesapeake
and Ohio Railroad, land were sold at 90 cents,
and $4,000 s per cent. bonds were issued
for general city purposes. and sold at95 cents,
making only $3.50, 900 in bonds of the entire
indebtedness of the city which have been sold
at less than par. The difficulty which had
to be encountered in disposing of the city
bonds was the fact that parties he lding bonds
issued at par, were offering them at IS and
80 cents last year, when money was scarce,
and the wants of the holders of the bonds |
pressing. The city authorities had to meet
this kind of competition and it was utterly
impossible to regulate the market under such
circumstances.
1t is proper to state that in the matter Of
creating the debt for the construction Of the
water works, proposals were invited, by |
public advertisement, STIMULATING to pay for |
the work in city bonds. The lowest respon-
sible bid at the time was from a Baltimore
firm at 100000. Before the contract was
awarded dissatisfaction was manifested by
our citizens, believing that the price was
exorbitant. The late Col. NJ. G.. Hartman
was particularly active in defeating the con-
SUNNI alton Of that proposition, and finally
the work was let to Menefee & Parkins at
$50, 000 Mr.. VIM. Jordan afterwards TAX
ing Mr.. Parkins' place in the contract. This
was saving to the city of $4,000 in s per
cert. bonds, and the work was completed
according to Specifications.
When most OF the city bonds We're issued
capital was not disposed to invest in city Sc
curties. 1t sought more active employment.
or located in non-taxable United States
bonds The per cent, bonds of Staunton
in the hands OF citizen OF the city, would
yield very little more net interest than
United States per cent. bond. The for
mer are taxable by the State so cents on the
hundred dollars, and by the city 81 10 on
the hundred dollars, making SLIGO on the
500, while the latter are entirely exempt |
from tdXaLIDI. nc lAlteE, TGdully CO1is
vertible into currency at par, and some times |
at premium, while with the city bonds it |
would be rare instance, indeed, when cur
rencJ could be gotten at par, even if they had
been placed on the market at par originally. |
The per cent water bonds are bringing a
premium OF Or per cent, it is true, which
is owing, doubtless, to the security they car
ry with them and the rate Of interest they |
bear. This could not be expected OF the |
per cent bonds, resting solely upon the faith |
Of the city, and subject, as other personal !
to state and city taxation. It is |
probable as business revives and money cir |
culates more freely, that corporation securi-
ties will be more in demand and with the |
Of the national government in |
placing its 4 per cent bonds at par, our per |
cents may reach par. AS it is, we have no
doubt the authorities have done the b,st they !
could, and have been animated by consci-
ent ious purpose to discharge their duty.
In glancing over the items which consti-
= T..