The weekly tribune. [volume] (Great Falls, Mont.) 1891-1894, 1894-08-17
SCHOOL BONDS RECOVERED
The Chicago Bank Gives Them IN
History Of the Trouble About
the Bonds.
Construction Work on the New High
School Building Will Be Com
menced Soon.

~SotSSO - Va SAoo oOuoE
which have been lying in the vaults oil
Of the American Exchange bank for the
past year have been at last recovered, and
will once more be in the possession OF
school authorities. just what settle.
ment has been made at Chicago between
Mr.. Pomeroy, representing the school
board, aud the American Exchange
bank whose claims against them have SO
long kept them locked up does not ap.
pear in the brief dispatch received yes
terday from Mr.. Pomeroy to the secre.
tary Of Of the school board, A. E. Caul.
field. The telegram stated that the
bonds would be surrendered by the bank,
and would be here August IS. A special
meeting Of the school board was called
yesterday on receipt of the telegram.
There were present at the meeting, Mes
srs, Holmes, Gockstetter, EARL and En-.
erton. One question discussed was
whether it would be wiser to leave the
bonds in some safe depository IN Chi
cago or bring them on to Great Falls.
MIR. Gockstetter moved to have them
left in Chicago and Emerton seconded
his motion, but on vote cast his voice
against the motion with EARL, 30 it was
lost and the bonds will be brought here.
1t was voted to advertise the bonds for
sale at Once and the motion carried.
The meeting then adjourned. 1t will be
seen by the advertisement of sale
which appears in this mornings TRIB-
UNE. that the board do not propose to
let the bonds out Of their possession
again, and the bids are to be for cash.
payable in Great Falls.
1t is so long since the bond trouble
arose that many have forgotten the de-
tails and will be interested in q brief
resume Of the facts in the case. The
$4,000 in bonds were voted by the peo-
pie in March, 1893, and sold a few
months later to Hayes Il Sons of Cleve-
land, o., for a premium Of over $1,000.
The panic came on about this time and
cash was exceedingly close in the east.
As Hayes Bros. did not come to the front
very promptly the county treasurer
drew on them for the amount and sent
the draft with the bonds attached for
collection through the Merchants Ma
tional bank. This institution al the
time was in a critical condition and had
been notified by it's Chicago correspond
ent, the American Exchange bank, that
no more ~overdrafts would be honored.
On receiving the $4,000 draft for col
lection the Merchants bank sent it with
the accompanying bonds to the Chicago
bank at the same time telegraphing
them that they had sent $4,000 for
credit. The Chicago bank accordingly
when the draft came back from Cleve
land, where they had sent it, refused by
Hayes Bros. on the ground that there
was some technical flaw in the title of
the bonds, simply held these bonds
as collateral for sums amounting
to about 5000 which they had
paid out in. the meantime on account OF
the Merchants National bank on the
strength, as they claimed, OF the draft
RENTED for credit by the Merchants.
The whole trouble arose through the
misapprehension caused by the use of
the word credit, instead of collection by
the Merchants bank in their telegram.
1t has been generally admitted by all
business men and lawyers who are fami.
liar with the case that the Chi
cago bank had no legal claim against the
bonds, which were deposited with the
Merchants bank only for collection by
the city treasurer, but the American
Exchange had possession, and it was a
matter of some difficulty to convince
them that they should give up this point,
which was about the only n they had.
However, it appears this has been &C.
complished. The school board have
advertised the bonds for sale on the Goth
instant. There is no doubt Of their re-
satisfactory bids, as the board
have already received several inquiries
and offers Of more than par and accrued
interest in spot cash. A member of the
board assured a TRIBUNE representative
that it was the purpose Of the board as
as the bonds were sold to proceed
at once with the construction of the
high school building, according to the
plans already adopted, and that they
hoped to be able to let a contract within
thirty days, and have the building en-
closed by the time severe weather comes,
30 that work could proceed during the
The need of another school
house is urgent and no time will be lost
in getting the new high school building
under way.