The Jersey City news. (Jersey City [N.J.]) 1889-1906, 1891-04-06
SAGE F|NANC|ER|NC,
The Real Benefits the City
Derives From the Last
Bond Sale.
A REMARKABLE CONTRAST
How the Public Interests We're Sacri-
feed in a Former Transaction
Charles W. Aliens Good
Work.

The more citizens generally consider
the late refunding transactions OF the
Board Of Finance the more they are con-
vinced that the Board displayed consider
able wisdom and conducted those trans
actions In manner which Is Of great
benefit to the city. The amount Of bonds
which tell due this year and which the
Board provided for was to s. 455, 0o0.
OF this amount 100000 was paid OF by
the Sinking Fund Commissioners, leav-
ing 81, ,055, 600 to be refunded. The s400, 900
which was paid of bore interest at the
rate Of seven per cent. year, all of which
amounting to $4,000 per annum will be
saved to the city.
In addition to this large amount of
money there will will be saved annually
the success the Board had inre-
funding the debt at lower rate Of inter-
est than the old honds paid. OF the
amount refunded $3.50. 900 OF water bonds
paid six per cent. while the new bonds
will piy i've per cent, thus saving the
refunded 1885, GOO paid seven per cent,
and on this lot the city will save each
year through the Boards refunding
scheme q, ,720. There was also refunded
81, 769, 900 OF seven per cent. bonds, which
saves the city in Interest annually $685.
$50. make total of s72, 800. In addition
TO this they sold each boud at premium
Of .007 on 81, making a gain to the city OF
$l,43S.
A BIT OF HISTORY.
In strong contrast TO this brilliant piece
OF nnanciering was the last pond selling
transaction in which the city INDUCED.
In 1879 the city sold 81 1858, 600 worth OF
bonds under the most disastrous clrcum-
stances. The bonds we're dated February
1, fact which should be borne in mind
in considering what follows, and they are
payable within thirty years from date.
The first actual sale took place on June
IS, 1879, and the city allowed the pur-
chaser commission of five per cent. and
three months interest. That is, they
compelled the purchaser to pay back only
one months accrued interest instead Of
the four months which had elapsed be-
tween the day the bonds bore date and
the day ON which they were sold.
In all sales 1t is generally stipulated
that the accrued interest shall be refunded
TO the city by being added TO the price
paid for bonds. This is the case in the
transaction just arranged. But In 1879
the city continued TO sell the bonds at
: private sale from June oH allowing differ
cot commissions at different times rang
ing from per cent. to 1-2 per cent. until
Dnally in January OF the following year
they sold S430. 900 worth of bonds, allow
ing commission of 5 per cent and the
interest for an entire year. In this man
ner the city lost s64.025, besides about
$50 600 which it had 10 pay In interest on
money it never had the use of.
A MARKED CONTRAST.
In speaking OF these two financial trans
actions of such different benefit to the
city, prominent citizen said this morn
ines-
when the circumstances surrounding
4Nf4c fot int
consideration. the good work done by the
present Finance Board stands out the
more prominent. In 1879, when the last
large sale OF bonds occurred, things were
booming. The financial world was re-
covering from the depression through
which 1t had been struggling for the pre-
vious five or six years, and the money
market was comparatively easy.
Money was moro plentiful than 1t had
been In several years. and was seeking
every rywhere for an investment. Sucn an
investment as the bonds of Jersey City
offered should have been considered
gilt-edged, and the bonds should have
been snapped up eagerly at a premium.
Instead OF that the authorities appear 10
have had considerable difficulty IN dis
over year disposing Of them.
and even then 1t appears that
they could not sell them there except at
high premiums in the shape of commits
sions and accrued interest. Why, of the
entire 81, $4,000 which the city sold,
then only 100000 went at par without
commissions or accrued interest, and they
were taken by a charitable institution in
New York, which does no appear to have
been up to the uss ges of the times.
Now look at the transaction recently
consummated by the present efficient FL
nancial Board. The money market at
the present day Is in much more strin-
gent condition than it was in 1879. The
recent heavy failures both at home and
abroad have tied up the market. and
placed such high premium on call and
short time loans, that capitalists have
been very reluctant TO tie up their money
in long time loans when it commanded
such a premium for short time loans
Notwithstanding this the Board of
Finance succeeded In disposing of s., ,055, :
600 worth Of per cent. bonds at a
premium.
Another fact which adds to the value
OF this transaction is that the bonds re-
Gently sold are subject to municipal tax
which really brings the interest down to 4
per cent, or less. inasmuch as the city
receives back in taxes some of the money
1t pays out in interest The citizens and
taxpayers of this city have every reason
to congratulate themselves upon the fact
that the financial affairs are In the hands
OF such an efficient Board, and that one of
that Board Is Charles w. Allen, who
have every reason to understand, was
mainly instrumental In bringing about
this beneficial result