The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1890-12-04
STREET GRADE SCRIP.
Mr.. Jacob Furth's Plan for Re-
deeming 1t.
BANKERS BEGIN TO oRUMBLE.
President Adair, OF the Board Of Trade,
Considers the Matter Serious
Other Interviews.

The amount of scrip issued by the city
as temporary payment on street improve
ments Is beginning to be felt by the bank
ers and other business men OF the city.
There is said TO be $404. 900 uncollected
from owners OF property assessed Tor I'M
vfovements. Scrip TO that amount IS being
used as security by contractors and others
who have been paid with 1t. or has oeen
sold at discount. The situation is stated
by Mr. George b. Adair, president oil the
Board of Trade, in an interview with
Posr-TNTELueEScER reporter.
Owing 10 the lack of present and pros
pective means of redeening the severai
hundred thousand dollars OF grade scrip
issued, its value has deprecated TO 70 or ~
cents on the dollar. / could buy $75.oOo
worth at that price. some OF 1t only TWO
weeks old. There is not bank IN this city
which has not $4,000 to $4,000 worth OF
this scrip. and they will take no more OF
it. There are fully twenty firms which
carry accounts OF $4,000 to $4,000
because they cannot get paid. The con-
tractors have hypothecated II with them.
and they have sold or hypothecsted
il to the banks. Now the banks have all
the scrip they can carry, and will lend no
more money to those whose scrip they
hold. The result is that the scrip is de-
stroying the contractors credit, because
the merchants say: That man is perfectly
good, but can't get maid. The merchants
credit is injured at the banks, because they
have already given them loans on their
scrip. The workmen get paid in scrip and
cannot sell il.
There must be several thousand dollars
worth IF scrip. six or seven years old. held
by the banks. In 1883 and 1884 much
work was done at time of depreciation in
the value CT real estate. when the people
were unable to pay their assessments. Ii
the city had sold the property, II would not
have secured the amount of the assessment
for it. The city, therefore. extended the
time again and again, until the debt was
outlawed and it has only been able TO col
lect what the property-owners have paid
voluntarily.
ION some jobs where work has been
stopped by injunction by the property
owners. scrip has been issued. but the
grade tax cannot be collected and the city
will have to pay it. The taxpayers may
object to paying q tax for the principal and
ibtciCSt Va q QCOi lbSuilCu OAAy tOt WIG
benefit of people in a certain locality.
Thus the value of this scrip is deprecated.
Another great objection to the scrip
system is that contractors, knowing that
they will be paid in scrip 1t discount OF
20 to rs per cent. bid much higher than if
they we're paid cash, and in consequences
improvements cost so much more"
How would you get rid of this old
debt2''
We'll. the new charter provides that
bonds can only be issued for future or cur
rent work. and this makes no provision for
this old debt. Some provision has got to
be made, and several persons are figuring
on it in the endeavor to find way. We
can't 60 TO the council with demand I'M
less We suggest way of complying with
IL. 1t would hardly be advisable to issue
bonds during the present depression in the
money market, for We already have nearly
q million dollars OF bonds out and not one
tenth of them are sold. If we issue half or
three-quarters of q million more before the
first issue is all sold we should hurt
the sale OF both issues. Nevertheless il
would involve a great saving TO issue
bonds to take up this scrip as soon as that
can SAFELY be done, for the scrip is drawing
10 per cent, and even il the bonds were is
sued a, per cent interest there would be
a saving OF per cent. This on over $780,
COO, including $24s. 1870 for the Yesier
and Rifiehart corners, would be quite a
saving"
L. II. Griffith said: "Scrip. is drug on
the market. grade scrip especially. and is
offered at SOC and being cut Water and
sewer fund scrip is at par. The bulk OF it
is held by Seattle banks. l propose that
bonds be issued, if it can be done, and
sold. though the present is very poor
time.
THE whole plan of grading and paving
should be changed from the old forms The
plan should be that the property-owner rs
along any street which they desire to have
improved should make q guarantee fund
sufficient TO cover the cost of the work.
The work can be done for 25 per cent. less
on a cash basis. Bankers would be willing
to purchase the scrip at par if they were
certain OF payment on completion of the
work. Complete plans and specifications
of every piece of street work should be
prepared and the work let in a lump sum
TO a responsible contractor"
SNGSc Oio1sc SaCOuS, tue corporation
counsel. said: "Of the $4,000 of out
standing scrip for local improvements.
over half will have to be paid by the city.
Most of these Improvements have been
made for the benefit of corporations, which
have induced individuals TO sign petitions
for the grading OF streets. When the grad
ing has been done these same individuals
have protested against the assessments.
The officials whose duty il was to collect
these assessments have neglected 10 per
form II, and thus the city has to make the
amount good. About the middle OF the
week we shall commence over $50 suits
against delinquents.
An ordinance is already before the couu-
eli which will partially dispose of the dill
Guilty mentioned. 1t proposes the issue of
Q per cent. bonds on February /, 1891. to
the amount of sSil, LOO, that amount be-
ing made up thus: Outstanding warrants
on the road fund. sSSs, 674.50; outstanding
warrants on the IRE fund. sI24, 900. 90; in
terest on road and fire fund warrants 70
February /. 1891, So. Coo; for funding the
city debt created by the widening of Com
merciaI, Second, South Second, South
Third and Front streets, and creating g
public square. s2ss 81 %; interest to Feb
rnary l. 1891, S57 so1. An addition will
have TO be made for judgments for grading
assessments. which cannot be recovered, oil
aoous $1,000. and other additions will
bring the total 10 aoou; 81. 100000"
he only remedy can suggest for 8
temporary relief from the accumulation OF
grade scrip is one l proposed four years
so said Mr.. jacob Furth. That is the
issue by the city of redemption scrip bear
ing per cent. interest coupons, redeemable
m three or i've years. The credit of the
city with such good interest," wonld nrnh