Birmingham age-herald., 1895-03-27
OUR CITY CREDIT AGAIN.


 It is known to most of.our citizens that, at the request of Mayor Van Hoose, the Legislature in February passed an act au- thorizing the Mayor and Aldermen Of Bir- mingham to issue per cent longtime bonds for the purpose of refunding out standing bonds bearing higher rate of in- terest. Of course it is we'll understood by all reasonable men that there is no way to force the holders of Birmingham bonds to give up these securities unless they carry a right of redemption clause. Mayor Van Hoose is wei aware of this fact.
 The Mayors visit to the Eastern market was simply to present to the bondholders the plan suggested and authorized by the Legislature. But the bare mention of the matter to the oond houses seems to have kicked up feeling of unrest and aroused suspicion, as is evidenced by the following letter just received by banker of this city from prominent house which has dealt in our securities. The letter came yesterday, aud reads as follows:
 NEW YoRK, March 22, 1895.
 DEAR SIR: We have to acknowledge receipt of your1ett of March IA introducing Hon. James A. VanHoose, Mayor of your city.
 Mir. VanHoose has called to see ns in refer
 
 debt and reducing the interest on the various issues 10 per cent per annum.
 Ne are very much surprised that he should come here such mission. We have sold city of Birmingham bonds to various people, who took them in good faith on the credit Of the people of the city and the resources Of Birmingham. The outstanding bonds bear fixed rate of interest to maturity, and the acts under which they are Issued specify that their payment shall take precedence over future is- sues. and the coupons could be turned in as taxes.
 We have read tho act for refunding, which the Mayor handed us. It was evidently in- tended an instrument under which the city could refund bonds which they had the right 10 call in, and any others that they might be able to buy on the market. Itdoes not seem possible that the State of Alabama could have any idea WI en it passed the act that they were in any way suggesting any kind of repudia- tion of contracts which were made by the city with the bondholders, and we think that any such proposition would ruin the standing Of that part of the country with the people here and abroad where tho bonds held We tn ink what the eope should do is to call a m ass meeting of the citizens and ask them to meet the situation and not the bondholders. Then, when. the affairs of the city improve, their credit would stand much better than per haps it has ever before.
 We also tuld your Mayor that we had no proposition to make, that the bonds were en- iirely out of our hands and in the possession of bona fide purchasers, who paid their good money for them.
 Now if the writer of the above letter did really "read the act for refunding' he surely understood that it did not even sug- gest the idea of repudiation. The act simply proposes an exchange Of per cent bonds with no security other than pledge of the faith and credit of the city for a lower interest rate bond secured by not only the faith and credit of the city, but by the property thereof, the taxes, incomes and credits, and to run for a longer term of years. It is hard to discover anything wrong in such a proposition if 1t is pre-. sented in the right light. Nor does 1t ap- pear that creditors commit an offense or crime in rejecting the proposition.
 It must be insisted upon that rejection does not me an loss to the bondholder. Birmingham will protect her credit, even though it cost her serious inconvenience, till she pulls through the season of re- cuperation and rises to the high ground just ahead of her. "Then," as the letter writer says, "when the affairs of the city improve, our credit will stand much better than perhaps it has ever before.'