Worcester morning daily spy. (Worcester, Mass.) 1888-1898, 1898-03-16
THE CITYS BONDS.
Adverse Comment on Rejection
of Boston Bid.
The Advancing Rate for Money Makes
the Rejected Offer Look Large-The
Bidders Said to Be Glad to Be Out
of the Deal.

The Boston News Bureau daily pa
per published in the interest of bankers
and investors. had the following para
graph Monday evening: "a week age
the city treasurer of Worcester opened
proposals for 100000 A per cent regis
tered sewer bonds, due Jan. l, 1927, the
highest being ia IS, an income basis of
8 234 per cent, by Adams & Co. The
treasurer rejected all the bids, thinking
that his bonds were worth more. This
action has caused adverse comment
among local bond houses. He has now
sold the bonds to the Worcester city
sinking fund"
The same paper Tuesday evening said.
1.-THE municipal bond market is Excess
sively quiet. Most of the bond houses
are not attempting to do much bust
ness at this juncture. Buying orders
for all classes of municipals have been
largely withdrawn"
There is certainly a difference of opin-
ion as to the wisdom Of the mayor Qor
1t was the mayor, and not the treasurer,
who rejected the Boston bid in reject
ing a bid of So for a 30-year per
cent bond. Since that time there has
DGVil q hCu leIlA4IS OlL LliN
for all kinds of bonds for investment
purposes, on account of the growing
timidity of capitalists due to the fear of
war. The rate for money on the best
class of financial paper has gone up
with a rush, and if the city were to at
tempt now to feat bonds it could not
get so high price as was bid last
week. Report comes from Boston that
Adams & Co. are exceedingly glad that
the mayor rejected their bid.
The mayor sold the bonds to the com
missioners of the sinking funds at lis, 50,
which, in view of the present condition
Of the money market, is exceptionally
high. The mayor took advice from some
of the financial men of the city before
rejecting the Boston bid and was
advised by some to accept it, and by
others to reject it. He acted on his own
judgment in the matter and says that
the day after he received a better offer
than that he rejected He evidently
does not look for war, and expects that
before the city has to borrow more
money the market will be easier. The
last loan floated by the city was 100000
for the fire department headquarters
1t was a per cent loan due in 1906. 1t
was sold in January, at los. 056, and will
net its purchaser about 3 .25 per cent, A
100000 30-year water loan was sold last
year at 115.O78, netting its purchaser
only about 800 per cent.
The premium for the bonds sold to the
sinking fund goes into the city treas
ury, and may be disposed of by appro-
priation. 1t may be appropriated to the
sinking fund or it may be used for other
purposes. 1t is all the same in the long
run. The city must keep up its pay
ments to the sinking fund, and if it
spends the bond premiums for current
expenses, it must make up the sum TAX
en- in some other manner.
If the present comparative stringency
in the money market continues, the city
will have to pay rather more than 1t did
last year in the way Of interest on the
money that must be borrowed to meet
current expenses in anticipation Of the
payment of taxes next fall. 1t has a
right to borrow from the sinking fund.
but the raising of 1921 900 to pay for
bonds purchased last week diminishes
the ready money in the hands Of the
commissioners. There is one thing about
it, however, Worcester's credit is gilt
edged, and the city will be able to bor-
row as low as any other city of her
class in the country