Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-12-24
A BAD MESS.
THE CITY LIABLE TO TWICE PAY
IT'S DEBTS.
Over $4,000 in Coupons Purchased
by the City are Missing and
not Cancelled.

| for the second time by the city, and how
many more, no one can tell. It would hardly
seem that the city finances could have been so
poorly managed in the past as to permit hun
dreds of thousands OF dollars being purchased
of its Indebtedness without due and prompt
cancellation but.that is just what has been
done. The only wonder is that, with such
| financial management in the past, the city has
any commercial standing whatever. The fol-
/ lowing interview with Judge H. o. Beatty, of
the Funded Debt Commission, by representa-
tive of the REcoRD-UNIoN, will give an idea of
the loose manner in which the city's payments
have been guarded and the present liability to
largely twice pay for indebtedness once settled
| What is there Judge, about this matter of the
| abstraction or disappearance OF coupons which
! the city has paid
! Judge B-0f the early coupons, from 1860 to
1864, inclusive, nearly ali Of them are now
| pasted in the coupon books, except the coupons
of 1861. will state that what | mean by the
coupon books, is set of books of six or seven
volumes, which are so ruled as to leave oblong
spaces Just the size of a coupon. There are sew
eral OF these spaces ON each page, and each
| space is numbered when the books are made,
| giving in due order place for each coupon of
every bond held as part of the city debt. The
plan is that as fast as these coupons are paid
they shall be pasted over the space represented
/ by its number
|
sive, or nearly all, pasted in this book, with
| the exception of the coupons OF 1861. To be
more exact all the coupons of 1860, except one,
are in the book; all of 1862, except twelve are
| pasted in the book: all the coupons of 1863 ex-
| cept one, and of 1864 every one of the coupons
| are pasted in the book in their prop-r place
| There are about 900 coupons that fe1 due at
| that time annually. Now, of 1861 l have not
| counted the coupons which were paid, and
| those not paid, but have counted the dollars
represented by the paid coupons. The whole
I nm 1fgr ut l1orG In
| whole number apparently paid and pasted in
as the book now appears, is 1882 leaving So
! 1S6 unaceounted for. You will see. therefore,
| that during the years 1860, 1862, 1868 and 1864
there were only fourteen coupons missing rep
resenting only 1891, whereas in 1861 there is
Loo bonds missing, and the coupons represent
| ing 81, 1s6.
Rep.-Can there be any doubt as to the fact
of these having been paid?
| Judge B.-There can be no possible doubt
that nearly every one of the coupons OF 1861
were paid at, or very shortly after the time they
| fell due, for these reasons: First, the bonds
were bnt recently issued the money FOR the
payment OF interest was raised in advance. or
| the year before II became payable. On the first
| day of January, 1861 there was more money in
| the treasury belonging to that fund than would
have paid every dollar of the interest if the cou
| pons had been presented. A conclusive tact
| that these coupons were paid, is that the Trus-
| tees Immediately commenced purchasing bonds
with the surplus in hand after paying these in
| terest coupons They commenced purchasing
| on the 29th day of February 1861. The law re-
| quired them to purchase bonds with the surplus
after al coupons due had been paid. The records
show that on January 90 1861 81 800 worth of
| bonds were paid from such surplus and of
| course that is conclusive as to the coupons for
| 1861 having been paid
Rep.-Can you account for the disappearance
| of these coupons?
Judge B.-Well, should suppose from the
| great number that disappeared, that are not
now on hand, that they must have all disap-
peared at one time. When there is only stray
| coupon disappears here and there. one at time
| l imagine it is the result of carelessness upon
| the part of the City Treasurer in not very care
fully handling them. They are printed on very
| light tissue paper, and a slight breeze might
blow them from desk or whenever they were
being handled. But no such large amount as
| 5 1000 could disappear in that way. Ny opinion
| is that the whole of the coupons of ls65-the
ISSo,OOO-disappeared at one time. How they
disappeared of course l cannot say, but being
| satisfied that they were all paid when due or
virtually all, am satisfied that all disappeared
| at one time and the $4,000 of coupons which
| are now on the books. have probably been pre-
sented again at different times, in small
amounts, and paid. This of course is double
payment of that much of the debt That is
1 they were first paid in January, 1861, and have
| been again presented and paid at later date
| there being no indication of payment ON their
| lace. II some steps are not taken Immediately
| by the Trustees TO prevent continuance OF
such payment, it is quite possible the city may
| have TO repay the entire $4,000 now outstand-
ing OF these old, once already paid coupons.
Reps 1t possible that the coupons aud
| oonds redeemed by the city are not cancelled
| as soon as paid by the Treasurer?
| Judge B-So far as l know the coupons pur-
chased by the city have not generally been can
celled / nave examined into he city debt
matter the condition of the coupons etc dur
| ing the past six weeks, and have had access to
the coupon book whenever I required it, /
| think that nine tenths of the redeemed coupons
| which are pasted in the coupon books are not
| cancelled, nor marked in any way
whatever to indicate that they have
been paid; They are simply. pasted
into the book. This FASTING OF them thus into a
book might render it somewhat difficult to get
the coupon off to present it for a second pay
ment, but there are no marks upon it 10 indi-
cate that 1t has been paid. or to prevent its be-
ing again paid if removed from the book and
presented to the Treasurer or Bond Commission
ers. n few of the coupons more recently paid
have Mr.. Gerbers stamp upon them. / think
his stamp contains his name and the date of
transaction, but not the word cancelled" or
| paid"
Rep-How about those purchased by the
Judge BAH coupons and bonds purchased
by the Commissioners are stamped as soon as
a purchase is made The law provides that
when bonds and coupons purchased by the
Commissioners are SO stamped they shall not
thereafter be negotiable, and hence those which
have come into the possession of the Bond Com
missioners are safe against repayment.
Rep.-Is not this g most astonishing fact
| when the people of Sacramento are hardened
| with their city debt and devising every posi-
bic way to get rid of it. that such loose methods
should be permitted concerning the purchase of
large amounts of coupons and bonds, without
having been cancelled, but leaving them for
abstraction by whoever is dishonest enough to
do so?
Judge BAH l can say is, that the practice
has been very loose one and should be
promptly cancelled.
Rep-How is it about the coupons from 1866
to 1875?
Judge B.-These coupons should be divided
into groups, by which could express my views
regarding them. The coupons from 1865 to
1871, inclusive, are all in about the same situa-
ton. During seven years there are coupons
to the amount OF 1905, which are not pasted
into the coupon books, but from an examina-
tion which ! have made of the BONDS and
coupons, tracing them from 1865 to 1885, am
thoroughly satisfied that coupons to the amount
of STA have never been presented, These cou-
pons belong to three bonds, and no coupons
from either of the three had ever been pre-
sented since 1864. II is to be presumed the
bonds were lost in about that year. In regard to
the balance OF the amount or g, 49,, probably
every one has been paid. The coupons of 1871
% are probably in much the same condition
only there are none of them outstanding.
| Rep.-What in your judgment should be
done to protect the city from double payment
on these coupons which have disappeared, and
from those which have probably been lost by
City Treasures in hsndhng2
Judge B.-The Trustees should make an or
der upon the Treasurer at once to pay no cou-
pons that Tell dne on or prior to January l. 1873
Tor the reason that nine-tenths of those out
standing and not on the coupon books have
PROFESSIONALLY, been once paid by the city; sec
ondly, the small number not paid have long
since been barred by the statute of limitations
The Trustees should therefore make positive
order at orce not to pay any OF these coupons
nor To retsin money in the Treasury
for the purpose of paying them. l might
state as furtneneyidence of the fact that couI-
pons have been lost by the City Treasury after
being paid, and that the earliest coupons which
the Bond Commissioners ever sold to the city
were coupons of 1878. At that time but a verv
few coupons we're being sold by the Commits
slouers, but of the few we had disposed Of to
the City Treasury find that six are not in the
coupon book, although we received the
money IF m the Treasury for them. We
have the documentary evidence of the
fact. Now from the number as missing
of the few we sold to the city, ii is easy to see
what has become of those missing from the
coupon book, from the large mum Der purchased
from other souFcss CT course those which the
city has purchased from the Fund Commission
has the stamp of the Commission upon them
and could not be purchased second time: but
it is different with those that have been pur-
chased by the city and have no mark Of can
collation. upon them.
Rep.-Were these coupon bonds in use in
1851?
Judge B.-As I understand ii, they were not.
] am informed that Peter Hickman got up these
books under direction of the Trustees. some ten
| or twelve years ago, and that he took ali the old
! coupons on heEd at the Treasury st the time
! and picked them out and pasted them in the
| proper place since that time each treasurer
I has pasted his coupons in the book as they
/ We're redeemed.