The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1894-09-14
BONDS SOLD.
The City Realizes the Handsome
Sum of $4,I27 as Premium
on It's Reminding
Bids.
The Bonds Sell at Over 100 Per Cent.
Reducing the Interest to Al
Per Cent.

The council on Saturday night &C
cepted the splendid offer of Farson,
Leach & Co., of Chicago and New
York, for the $4,000 of refunding
bonds. All of the aldermen were
present at the special meeting held to
consider the report of the finance
committee, except Aid. Pitcher, and
Mayor Weaver presided.
Aid. Higgs, chairman of the finance
committee, reported the bids receiv-
ed, as published. Saturday, and recon-
mended that the bid most favorable
for the city was that of Farson, Leach
& Co., for twenty year bonds bearing
five per cent. bonds was S4,126 prem
ium, and on the thirty year, four and
a half per cent. bonds was $37. The
saving interest would be 1886 year
for twenty years with the Al per cent.
bonds, or $1,000, but to set off this
would be the difference OF premium
received now, S4,O9O which sum at
five per cent would be doubled at the
end of twenty years. Then, again,
the bonds ought to sell at four per
cent. at the end of twenty years,
which would make saving in inter-
est during the next ten years of
1880, making total difference in
favor of the city at the end Of the
thirty years of S4,S3O, if it took the
five-twenty bonds.
The report of the finance committee
was accepted, and the council voted
unanimously to instruct the mayor
and recorder to make a written con-
tract with Farson, Leach & Co. for
the sale of the bonds. The contract
was prepared and signed in duplicate
at once.
The company offers to make the eX-
change of the old bonds for the new at
some place hereafter to be designated,
without cost to the city, and this
will probably be accepted. The $751;
900 of old bonds are scattered over the
country, and the exchange will be
advertised. They bear seven per
cent. interest and mature Oct. 31st.
The new bonds will bear date Nov.
1st, and commence bearing interest
that day. The redemption of 1000
of the bonds, and the lowering of the
rate Of interest on the others by two
per cent. will reduce the annual in
terest charge from $3.50 to $3.50, a
saving of S2,32O.
The unexpectedly large premium
received really reduces the rate of in
terest received by the purchasers to
about Al per cent. That Mankato
should be able to dispose of it's bonds
at over LOG per cent. of their face value
is matter for self congratulation
and shows that the city's financial
standing is excellent. There is moth
ing in the contract specifying that
gold is to be preferred in the payment
of either principal or interest. The
sale is to take place subject to the
city making the usual showing of it's
legal ability to issue the bonds.
The S4,127 premium can be turned
into the current fund, which will
benefit that fund, already overdrawn
$4,000. We understand that it is the
intention of the council to place it
there rather than in the sinking fund.
The next bonds to fall due are S15,-
900 due in five years. The placing of
only $4,000 year in the sinking fund
will redeem these bonds.
The agents who were in the city
Saturday stated that the refunding
bonds would have brought $1,000
more if they could have been sold to
Eastern savings banks. Those banks
are not permitted to purchase bonds
of cities of less than 10000 population,
and Mankato cannot officially show
that population, although actually it
has more than that.
A nECnDn