The record-union., 1895-05-24
CONCERNING THE old CITY DEBT.
The Trustees Are All in Favor of Re-
funding 1t.
Mayor Steinman Says 1t Would Reduce
the Tax Rate to Less Than
One Dollar.

sums that have been paid by the people,
has kept Sacramento i'll the rear of the
procession of progressive cities, will soon
be practically wiped out. The city still
owes nearly one-half the amount Of her
original debt, but it now looks as if the
remaining portion will soon be refunded
on a forty-year term, and If that is done
we will hear no more about "our city
debt" that has bobbed up SO serenely and
put quietus on nearly every effort made
for municipal improvement that has been
projected for many years past.
Matters have been progressing in that
direction for some time, but the first real
step toward definite results was taken at
o special meeting of the City Trustees
called yesterday by Mayor Steinman for
that purpose. All the Trustees were
present except Bragg, and they voted
unanimously in favor of the refundlng OF
the debt at the earliest possible moment.
BoNDHoLDERs STANDING PAT.
Mayor Steinman, in response to the
Chairman's request, stated briefly the
object of the meeting, which was to con-
slider certain correspondence on the sub
ject of refunding the city debt that had
passed between himself and three of the
leading bondholders.
Clerk + llQL LQ6u I6au l6tt6T lTOu tQo
Mayor to Messrs. Daniel Meyer, Sam
Davis and George 4. Bates asking their
views as to the possibility OF refunding
the debt at per cent, the bonds to run
forty years.
In his response Meyer stated that he
had sold all of his 1898 and 1903 bonds.
but still had $4,000 of 1913 bonds and q
few coupons. He would be willing to
exchange them for new 4 per cent. bonds
if the city would pay interest on the
past due bonds.
Bondholder Davis replied that he had
none of the 1898 nor 1908 bonds for which
he would be willing to accept new ones.
He referred to an Interview he had had
with the City Trustees some time ago and
said he had no new proposition to make.
II the city had any, 1t might commune
cate with him and he would confer with
other bondholders.
''Tne sum and substance of it is" said
Mayor Steinman, after the Clerk had
concluded the reading of the letters.
that they want US to pay them back IN
terest on overdue bonds"
CONDITION OF THE DEBT.
The Mayor then read brief statement
of the present condition of the city's
debt. The original bonded Indebtedness.
he said, was 81, 535, 800. and the interest
that accrued on the same was about
$1,000,0 900, making a total Of S2.600.000.
In nine years the Funded Debt Com
missioners received by direct taxation
100000 worth of bonds. In the past
three years the Funded Debt Commits
sioners have saved the city $50, 900.
There are outstanding in unpaid in
terest coupons Sl2l, 600. The city owes,
all told, to-day about S796,445, against
which 1t has $l0S,000 due 10 its credit
with the Treasurer, leaving an actual
ha alapca 0u9 of SfiSS- 445
Recently the Funded Debt Commits
sioners had redeemed $4,000 in bonds OF
1888 at par.
He said he was in favor of refunding
the debt, but was opposed to paying any
bonus (in the way of interest on overdue
bonds) to the bondhoders. However, it
was for the Trustees to determine what
they would do in the premises. On his
part, he was willing to have q further
conference with the bondholders.
MR.. DEvLIN EXPLAINS.
Corporation Counsel r. T. Devlin, be-
ing asked to give his ideas as to the con-
dition of the debt and the prospect of re-
funding the same, made the following
statement:
There are, he said, past due bonds of
1898 in the hands of bondholders other
than the City's Commissioners to the
amount of S210, 100, and of 1898 bonds,
$l99, 100, making total of past due bonds
amounting to $409, Of past due
coupons there are $121, ,30S so.
OF the bonds not yet due (aiso held by
outsiders) there are: Of 1898, $I24, 300; of
1903. $4,000, total of 500, 200.
This makes total of $734, ,70S So to
which may be added new street and levee
bonds of 800, making the total out
standing bonds S765. .209 50.
To offset this sum there is now cash on
hand in the interest and sinking fund to
fbo nf hal
of S657 POS 80.
AS to the prospect of refunding, Mr..
Devlin said there are S204. 200 bonds of
1S9S-1903 which the city cannot now pay
nor refund unless the bond bolders
should be willing to accept. On the past
due bonds we claim only their face value,
while the bondholders claim they are en-
titled to interest thereon amounting to
S136, ,6S6. This sum is in dispute. Judge
Johnson of the Superior Court recently
decided the city doesn't owe any interest
thereon, and the case is now before the
Supreme Court on appeal. It would be
reached In the usual course at the No.
vember term, but an effort will be made
to have the court settle the matter in
July. The amount involved is as fol-
lows:
Interest on 1888 bonds, at As per cent.
Sl00,84S interest on 1893 bonds, at Is per
cent, $50, S3S. Total, Sl36,6S6.
d z
held as club over the city to enable the
bondholders to get interest on their past
due bonds. He believed they would be
willing to compromise on two-thirds of
their claim. or say $4,000. If we could
propose to them to refund the S409, 200 of
1S9S-l903 bonds at per cent, and leave
the other matter to be settled by the
courts, it would be good proposition. 1t
we do nothing to get in or refund these
bonds not yet due, we would still have to
levy the same tax as at present-o5 per
cent. of the city's revenues.
BUSINESS WAY
To get at the matter, continued Mr.. Dew
ln would be to see If we can refund
without having to pay interest on past
due bonds. There are two ways to do it.
One is to come to an understanding with
the bondholders, and the other is to
leave the question of interest al open
one. Possibly the bondholders might be
willing to refund and leave the back in
terest matter 10 be settled by the courts.
If so, it would be good thing for US. If
we can get decision we could get rid Of
all but the S204, 200 of bonds not yet due.
TRUSTEE ToZER.
"Either we can. or we cannot refund"
said Trustee Tozer. "If we cannot we
must go on taxing ourselves as we have
been doing and are now doing, and it will
take about four years to extinguish the
debt. If we issue new per cent. bonds
the city's present creditors will probably
accept them. If the back interest is
legally due them, it should be paid; if
not, there should be no compromise. The
bondholders have no hope of getting it
unless the city backs down aud sur
renders"
Mr.. Tozer then read some figures he
had prepared, put they did not materially
differ from those given by the Mayor