The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1891-03-21

Inc duHOuHcen iuteHtiOH Oh tuS EoVefu-
ment of Seattle to issue bonds to fund the
floating indebtedness of the city has
aroused an objection which will require
serions consideration. On August 10th
last, the old City Council entered into a
contract with Harris & Co., financial
agents. of Chicago and New York, by
which that firm purchased the entire
series of water and sewer bonds, amount
ing 10 $4,000 then just issued. Those
bonds, bearing 5 per cent. interest, were
taken at par. subject 10 commission OF
per cent. Tie bonds were to be placed in
delivery amounted TO $3.50 900; another OF
$4,000 was to be made October LIST, 1890;
$4,000 more on November 1st, and the re-
manning $5o5,0o0 after January 1st, 1891, in
instalmcnts Of not less than $40 900 or more
than $50, 900. as funds were needed in con-
struction; fifteen days notice to he given
of each call
These conditions were observed until
January when the trouble with Benezctte
Williams gave occasion for delay. Mean
time, the city authorities began prepara-
tons for the issue Of another series of
bonds amounting to $s6i. 600, to bear per
cent. interest, for the purpose of funding
the floating Indebtedness. simultaneously,
the city newspapers began discussion of
the increase in the city's expenses.
The attention of Harris & Co. was drawn
to these facts. md they despatched an
agent to Seattle to confer with the authori-
ties. They represented that it would be
unjust to them and impolitic, SO far as the
city's interests were concerned, to run out
. 8 per cent. bond until the 5 per cents.
had all been sold. They urged that they
had not, at the time they bid for these
bonds, contemplated, nor did they
suppose the city contemplated so soon,
the issue Of second series. Among
other reasons they gave for this view was
that in August, 1880, Mayor Moran pub
lished message which included state
ment of the city's Indebtedness. This was
followed by an official statement by the
City Clerk, dated June II, 1880, and pub
lished for the benefit Of bidders for the
bonds, wherein it was set forth that the
floating Indebtedness Of the city approx
mated $300, 900. No mention was made of
any other liability, although the Mayors
statement showed the amount outstanding
for local improvements payable by proper
ty-owners to be $2o8,535. Messrs. Harris
Il Co. say they accepted those statements
as presenting the actual condition of the
city at that time, and they cannot under
stand why, within eight months of that
time, the city should find it necessary to
issue bonds to the amount of 1851 900, and
the Mayor warn the taxpayers that the
amount of unpaid grade taxes be over
$500, 900, or, with interest, soc, 900.
They declare that publication Of these
facts has hampered them in disposing of
the water bonds, and that the proposed
issue, if made independently of them,
will very seriously jeopardize the farther
sale of the five per cents.
The mayor. recognizing the gravity of
the situation, invited the Clearing House
Association and few citizens to advise
with him as to the best course to take,
with view TO submitting a statement to
the city council, upon which body devolves
the task of taking action.
Messrs. Harris e. Co. submitted propo-
sition containing several provisions, to
some of which the citizens took exception.
As finally agreed upon at consultation
on Thursday night, a plan of mutual in
terest was formulated. and will be sub
mistcd to the council.
1t provides that the city shall enter into
q contract with n. w. Harris & Co. in
which each agrees to do certain things.
The city will. if the plan is assented to,
Immediately ascertain the exact amount
Of its Indebtedness in the street and fire
funds on August 10, 1890, the date on
which the water bonds were issued. This
is to be accumulated in one issue of bonds,
the limit being that at which there is no
question of validity. Further indebted
ness is to be classed into another series of
bonds, before the issue of which friendly
suit is TO be instituted in the supreme
court for the purpose of determining the
validity of Indebtedness beyond the per
cent. limit. Whether either of these ser
les is to be a 5 or a per cent. bond is to be
at the option Of Harris e. Co., to be de-
ciared Immediately prior to their issue. If
they determine that per cent. bond is
the most marketable at that time they
agree to pay los for all they take; if
per cent. bond, then ''the price at which
the same or any thereof shall be so sold and
delivered 70 said n. w. Harris & Co. shall
be such as shall make the same
equivalent, as an investment for the term
that the bonds are 10 run, to the above
specified price for six per cent bond"
Harris & Co. agree to take 500, 600 of these
bonds absolutely, and are to have thirty
days. option on each of the remaining
blocks of 100000 so long as they choose
to exercise that option.
The city further agrees that it will not
prior 20 November 1, 1891, take any steps
to issue other bonds based upon popular
vote, beyond those men toned, except an
addition not to exceed SIS. 900 for enlarge
ment OF the water-works: and not before
October 1. 1891. take steps toward author
izing issue of bonds for the payment of
the Yesler, Rinehart and other corners.
Still another condition is that the city
vii not during the period between the
date of this agreement and November,
1891, in any manner increase the present
indebtedness of all kinds other than upon
its bonds by greater sum in the aggre-
gate than the sum of S160, COO"