The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1884-03-20
$4,000.
HOW THE $4,000 IN CITY BONDS
WERE DISPOSED OF. WHAT
WAS DONE WITH THE GOLD.
The City Paying interest on S40.-
900 and Gets the Benefit
of SIS, 900 Only.
Strange Financial SituatlOn-Inter.
views on the Subject. A Nut
for COunciliffen to Crack.

| 1OI OUullClllltch ~ NJ dChs
Great excitement prevailed in the
city Yesterday over the fact that the
$4,000 city bonds had been hypothe-
Gated to SWenson & Sons for $685. Ok
and no prospect of their negotiation
was in sight after so long delay; that
the note given by the city would fall
due the 26th of April and IL the $685.
600 was rot paid the $4,000 in bonOs
might be sacrificed. To get at the ex.
act situation STATESMAN represen-
tativ9 interviewed several of the alder
men and the members of the finance
committee IN regard to the matter.
CHAIRMAN OF THE FINANCE
committee, Odp1, was the first gentle
man interviewed. He said the situa-
ton was simply this: Mayor Saylor
gave the note of the city to SwensOn
& Sons of New York for $4,000
and pledged as security $4,000
in the bonds of the city, This note is
due the Goth of April the transact
ton having occurred the 26th of Feb
ruary. The mayor made this negotia-
ton through Mr.. NeWniDg, and these
bonds were shipped to New York by
the First National bank. Ii the note
| is not paid when due the binds may
| be thrown upon the market and sold
at less than par. This noe draws =.
SIX PER CENT. INTEREST.
The $4,000 advanced was to pay
$4,000 of bonds due the LIST of Janua-
ry last, and six per cent. interest
bearing warrants to the amount of
$4,000 including interest due. These
latter had not been paid and the city
was paying interest on $4,000, when
only $4,000 had been used. He did
not think there would be any trouble
about the matter for with the $4,000
still on hand from the loan and with
the amount that would be in the gen.
eral fund at the time the note would
come due the note could be easily met
THE COUNCIL,
he thought, would take no steps until
the return of the mayor which would
probably be the latter part OF the
week. Alderman w. B. Brush was
next seen. There was, in his opinion
no cause fer alarm. The facts were;
| The mayor on behalf of the city gave
a note for $4,000 and hypothecated
$4,000 as security. If this note is
not paid when due an understanding
with SWenson s. Sons for future in
debtedness can be made, or Major
Breckenridge will advance the money
TO TAKE IT UP.
In his opinion there was no
cause for alarm. The council
would provide for the payment
| Aid Hancock who is member OF
the finance committee was the next
party interviewed. He was asked to
give his understanding of the situa-
ton. He said he had talke1 with Mr..
Newning and others and the situation
was this: The $4,000 bonds had not
been sold as expected. These bonds
had been hypothetical to Swenson &
Sons, bankers, New York, to secure a
loan to the city of $28,OO0. The loan
would become due in sixty days from
| the last of February. Just what the
contract of hypothecation is the
| finance committee
DID NOT KNOW,
| but it was the rule of all banks in New
| York, if the debt was not paid when
due the collaterals might be thrown
upon the market and sold for what
they would bring, and this no doubt
was the contract with Swenson &
Sons. He did not think Mr.. Swenson
would do such a thing unless he were
in a financial position where he would
| be forced to do it. The markets OF
| New York are so changeable that any
man, no matter how well disposed
might be put in position where he
could not afford to hold the security
and it might be done. AS he under
stood
THE FACTS
Mayor Saylor gave a note in behalf
OF the city to this banking house and
deposited the bonds with the under
standing they were to be sold by
the house, but they had not been sold.
though he understood par had been
offered. The ordinance required them
to net par to the city. The money re-
ceiI ed from this loan he understood
had been disposed of, first, by meeting
the S14,4OO on all ten per cent bonds
due last January. These had been
paid and with exchange and expenses
made perhaps $14,50O. The balance Of
the money was deposited to the
CREDIT OF THE CITY.
He was asked if the city was moi
then paying interest on the $2S,0OO tt
SWenson 81 Sons, and also interest or
the outstanding warrants of the city
while the money was lying idle? 7 es
he replied, but the reason of that IS
1t was somewhat doubtful if thu
bonds could be sold, and in case thu
CITY should be obliged to meet the not
to Swenson 81 Sons, when due, thl
money would be needed for that pur
pose. With this, and the balance il
the general fund, the loan
COULD BE MET,
, the credit of the city saved, and fnan
cial loss on a forced sale Of the bond
ayerted. The matter arose under tn
old council. and the present board hat
nothing to do with it. He was fire
to saw he did not approve of it as
business transaction. He did no
question that everything was in tn
strictest good faith on the part OF tn
MAYOR. but il was unfortunate tina
the bonds could not be taken froI
, SWenson & Sons and negotiated else
where until the hypothecation wa
released. He did not think by the
: TERMS OF THE CONTRACT
: this loan could he paid before du
except with the consent OF the bani
! ers. AS to the future action of th
l council, speaking for himself, he wa
t in favor of placing the matter in tn
$ control of the city council. The o.
d dinance required the bonds to net tn
}, city par, but he thought a broke
J, might be employed to sell them IL
d the city and be paid out of the gene
\ al fund, if supplementary ordinant
t were passed, if it were found tt
J, bonds would not sell for sufficieI
e above par to pay expenses. -.
Alderman Platt was next int
viewed. He said he was IN the daI
. about the matter. He was not on tt
y finance committee, and he really
3 DID NOT KNOW
lust the situation. The old counG
o passed two ordinances; one fl
4 the funding of the ten p
cent bonds and the other to get mon'
to pay the floating Indebtedness;
# get $1,000 for a new market house al
the rest to repair the streets. The
ordinances provided the bonds shou
n not be sold for less than par witho'
expense to the city. They were Sc
ar to New York for sale, when in b
+ Judgment they ought to have be
- cold in Austin. He had no doubt tn