The evening light. [volume] (San Antonio, Tex.) 1881-1883, 1882-05-16
A LITTLE BOND GOUGE NIPPED IN THE
BUD.

A LITTLE BOND aoUGE NIPPED IN THE
BUD.
1t seems that certain bondholders of the
Peirce Bexar county subsidy bonds tried,
through their agent, Mr.. Geo. Caldwell, to
play the gouge game, which has become so.
popular with the State Treasurer in getting
rio of the cash balance, to-wit, selling back
the bonds at big premium. The following
letter is published in the Express Austin cor
respondence: - .---.-- ..
SAN ANTONIO, May IL, 1852.
Hon W. M. Brown, Comptroller:
DEAR SIR:-I have fifty thousand dollars of
Bexar county PIERCE railroad bonds which I
propose to sell to the county at SI.3s, or as
per cent premium. The county commission
ers refer me to you for information as to
whether you deem it advisable to purchase the
whole or part of them.
l would not sell less than thirty thousand at
this price.
Very respectfully,
GEO. w. CALDWELL.
To this the comptroller made the following
reply:
Your letter of the 18th inst. received. You
state that you hold $4,000 of subsidy bonds
issued by the county of Bexar to the Calves
ton, Harrisburg and San Antonio railroad
company, and you offer the same for sale to
the comptroller at thirty-fve cents premium
or $I35 for a one hundred dollar bond, said
amount to be paid from the sinking fund now
on hand in the treasury to be applied on the
subsidy bonds.
l have heretofore fully stated to the author
tiles of Bexar county that under the law order
ing the issuance of these subsidy bonds, the
contract, as plainly stated in the law, was that
the holders of the bonds were entitled to an
annual payment on each bond of ten per cent.
The holders of the bonds were entitled to the
annual payment, and the county Of Bexar
was equally entitled to make a payment of
two per cent. annually on each bond, thereby
decreasing the value Of the face of the bond
| and lowering the value of the coupons cores
ponding to the decreased value of the face of
| the bond.
In practice it was found more convenient to
purchase number of bonds at par value with
the sinking fund that might accumulate, in
stead of making fractional payments on each
bond. Complications were avoided by pur-
chasing the entire bonds and the extinguish-
ment OF the bonds in whole, instead OF in
partial payments on all the bonds, and chang
ing the value of the coupons. This practice,
| found, had been adopted prior to my con-
nection with this Office, and found no reason
to depart from the rule, unless complaint had
been made by the holders of bonds who de-
sire the annual sinking fund to be applied to
| their bonds specially. have now to reply to
your offer that, under the law and contract
with the citizens of Bexar county, there was
no stipulation to raise taxes nor any authority
| to do more than to pay the two per cent annual
sinking fund on these bonds, and the purchase
of such bonds as may now be offered for sale,
the payment to be made from the sink
ing fund in the treasury. Under no circum-
stances will this department pay more
than face value for She subsidy
bonds with such interest as may have accrued
at the time of purchase. have further to say
that if bonds be not presented for purchase to
the amount of the sinking fund now in the
treasury, for the benefit Of the bondholders,
this department will proceed to make applica-
,ion of the said sinking fund on the register of
bonds, and the two per cent. sinking fund will
be registered as applied to the bonds.
The registration will decrease the value of
each bond outstanding by its .proportionate
is payable on next installment day, will not be
paid at its face value, but will decrease in pro-
portion as the sinking fund is applied.
If you will tender bonds at par, with accrued
interest, your proposition will be accepted to
the extent Of the sinking fund now in the treas
ury. have deemed it proper to make this
explanation full in order that you may be adj
vised of the position taken in the matter of the
subsidy bonds. will state further that the
same rule applied to the Bexar county bonds
applies tc all the subsidy bonds issued under
the act of 1871.
[Signed. w. M. BROWN,
Comptroller