Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1889-01-22
THE CITY TREASURER.
What He Has to Say About the Bond
Business.

Der
SACRAMENTO, CAL January q, 1889.
To the Honorable Board Of Trustees o. the City Of
Sacramento, CdL-GENTLEMEN Several articles
signed by one of the members OF the Funded
Debt Commission have recently been published
in one OF our city papers, in which my conduct
as Treasurer was criticised to some extent. In
SO far as the statements relate to the money
withheld by me for the purpose OF paying past
due coupons, beg to refer you to the accom-
panying opinion of my attorney which clearly
when demanded, of all those coupons which
formed the basis of the recent litigation against
the city, and which cover all but about Sl3, GOO
Of the amount now in the sinking and interest
fund.
The intimation that l an Withholding any
portion of this money for the purpose of provid.
ing for the payment of the missing coupons OF
1851 is utterly unfounded. have no reason tn
presume that any OF these missing coupons will
ever be presented, and if they were they GER
tainly would not De paid.
am, and always have been. entirely willing
| to disburse any money in my hands as City
Treasurer, when it appears to me that it can be
done with safety to myself and bondsmen.
The sensational statements made in relation
to the improper cancellation OF coupons, after
payment. are without any foundation whatever
| have carefully examined the coupon books
and am unable to discover single uncancelled
coupon.
In my judgment, the assertion that a large
number of coupons have probably been paid
more than once, is entirely unreasonable, aud
even If this were possible, no good reason ex-
lists for giving it publicity at this time. With
the safeguards which have been in operation
during the past ten or twelve years. such an &C.
currence would have been impossible without
early detection, and the city is fully protected
| from any danger of such an occurrence in the
| future.
| 1t is unfortunate for our city that such wide
| publication should have been given to state
oinjure her credit abroad. During several years
past our citizens have been untiring in their eff
forts to properly present to the world the advan-
| tages we have to offer. both as a field for the
safe investment of capital and as desirable
place for residence. is it not probable that all
the good which has been accomplished by the
efforts of the pat year has been more than offset
by tins nnwise and unwarranted parading OF
local difficulties?
Would it not be more judicious and for the
best interest of the community that the various
officers, whose duty it is TO execute the pro-
visions OF law relating to our city Indebtedness
should consult with each other and endeayor to
agree upon some course of action, rather than
rush into print in an attempt to ascribe un-
worthy motives to those whose views NAV differ
from our own?
In the light of the very able opinion recently
rendered by the Hon. Judge Hunt, some doubt
might be entertained as to the financial wis
dom of the policy pursued by the Funded Debt
Commissioners from the fact that under their
spirited and nervous bidding for bonds and cou.
pons, the market value thereof has been very
materially increased. The policy of making
been publicly questioned, and it has doubtless
been mainly delegated to the venerable member
OF the Commission, who is the author of the
articles herein referred to, and in whose intep.
rity and honesty have the utmost Confidence
but who is, in my opinion, badly handicapped
when negotiating with such financ al experts as
those with whom his dealings are made
The effect of the decision above referred to
Will naturally be such as to materially reduce
the value of our outstanding bonds and COUPONS.
and should enable the Commissioners to obtain
more favorable terms in their purchases in the
future. Further comments in relation to this
matter seem to be entirely unnecessary
To one who is familiar with the past history OF
OF our city affairs 1t is apparent that an undg
n1ned motive exists, which prompts the publ.
cation OF such attacks as have recently beer
made, and it is fortunate that this biennial
agitation will undoubtedly be suspended fol
another term of two years, after the coming
selection, by your honorable Board, of a City
Treasurer has been made.
As have no desire to engage in protracted
controversy of this nature / shall deem it un
necessary to reply to any further comments OF
this character. Yours, respectfully,
W. e. GERBER, City Treasurer
HoLL & TAYLoR's OPINION.
Mr.. Gerber also submitted the following
written opinion, which was also read tc
the Board:
". Z. Gerber Esq, Treasurer Of the City of Sac
rdmento-DEAR SIR: Your communication dated
the 18th inst, in reference to the payment O.
the interest on the funded debt of the city. in
closing a statement of the present condition O.
the interest and sinking fund, and asking oul
opinion as 10 your duty in the premises, ha.
been received.
The facts necessary to q clear understandings
in this matter are, as we gather from your com
munication, substantially as follows: That 81
the interest which matured on the city's
bonded Indebtedness on the frt day of January
1865 about 1924 remain unpaid: that OF the in
teIest which matured on the first of January in
subsequent years, up to and including January
], 1879, small sums remain unpaid. aggregatine
the sum of SID ,9lS; that of the interest which
matured January LIST, of the four years succeeding
1915, the following sums remain unpaid: 1876
$3.50; lSI1-s3 s22; 1S7S-s27, 1S0; 1S79-s34 no
aggregating SOL .es2 that ali the interest which
1889, is still wholly unpaid.
We are also advised by your communication
that there is now in the interest and sinking
fund, applicable to the foregoing indebtedness
the sum OF 900: and that persons holding
coupons which matured on the 1st of January
1880, have presented them and requested pay
ment.
The question is Whether you can safely nay
the last named coupons without keeping in the
Treasury FUNDS sufficient to pay the coupons
which matured prior to 1880? BY referring to
the ACT OF 1885 Statutes of 1855, page 267,we find
that the interest on the city's bonds snail be
| paid at the Office of the City Treasurer on the
LIST day of January each year. section 40 Of
said Act provides that sit shall be the duty O.
tue lItdsuIeT W pay the Interest on san bonds
| when the same falls due, out of said Interest
! funds, as provided in this Act" There is nc
provision in this Act for registering the coupons
and paying them in the order of taeir registra-
| ton; we think, however, that it is perfectly
| clear that the coupons which mature on the Isl
| OF January of any given year, must all be paid
| beore you are authorized to pay any that ma
| tured on the succeeding OF subsequent wears
| This is right which the holder OF the oldest
! coupons enjoys and it cannot be defeated by
the voluntary act of the Treasurer 1t would
| be no defense for the Treasurer to say to the
holder o. the older coupons when he presents
| them that there is no money in the Treasury
| for him because IL was paid in liquidation Of
coupons OF a later date.
This rule, however as all general rules is
| subject TO limitations and exceptions No mat.
| ter now clear and perfect a persons right NAV
| be, he may forfeit il by his conduct The
Statute of Limitation is an illustration of this
| principle person who sleeps on his rights fol
| two years cannot collect a debt due on an &C.
| count, and one who remains inactive for five
years may lose his entire estate in real property
| These are statutory regulations but Courts
refused relief to stale demands, even in cases
| where no Statute of Limitation exists In
| such cases. however. Courts have established nc
exact time, g to an hour, minute, or a year y
| within which party claim to relief is barred
| by lapse OF time. They take into consideration
the circumstances Of the case. the conditions Ia
which parties have placed themselves, and the
extent 10 which the element of laches has en-.
| tered into the transaction.
While under the foregoing rule no exact time
| can be said to be established, when the holder,
of the Oldest coupons lose their right TO be paid
! in preference to those OF latter date we think
nevertheless. tnat you are justified in treating
| as stale, even il not barred by the Statute Of
| Limitation. all the coupons which matured
prior to January J, 1876, amounting to sl2,9lS.
| But we do not think you are justified in dis.
| regarding the rights of those holding coupon.
that matured in ls76-7-s-9. aggregating Si0i $50
because, as we understand, nearly, IL not quite
! all, these coupons have been presented to yor
! and payment demanded within the last year ol
two; that you offered to pay their face value tc
| the extent of the money in the Treasury; thai
! the money was refused by the holder because
| you declined to pay interest on them after ma
turity. This. in my judgment. by no mean.
| renders the coupons stale. The holders of them
ing themselves TO the utmost, not only to get the
money admitted TO be due, but also interest Oh
| the same.
| There is due upon coupons that matured in
| January, 1876, SS6.5l0 The law REQUIRES You Il
| pay this interest when il fails due, out of the
Interest fund. If the money is not in the fund
at the time the holders, of curse, cannot get IL
but they are entitled 20 the frs. money tina,
comes lpto the Treasury, and you cannot, in
purpose. The tender of money and the
refusal of the payee to receive the S. ne does
not extinguish the debt unless the sum is in-
mediately deposited in the name OF the creditor
in some bank of COCO reprte, and notice Thereof
| given to the creditor Civil Code Section 1901
If not SO deposited, but the tender is kept good
II viii stop the interest on the debt: that is
| however, we believe. the only penalty which
attaches TO the refusal TO take the money.
Our opinion. therefore, is that you are bound
| to keep IN the Treasury money sufficient To pay
MI In