The Jersey City news., 1899-11-16
MUNICIPAL BONDS
Finance Board Considers
Correspondence Relative
to Their Protection.
Mr.. GEORGE ". YOUHG'S LETTER
Corporation Counsel McDer-
mott Explains the System
of U. S. Mortgage and
Trust Company.
mr.. GEORGE ". YOUHG'S LETTER

The Finance Board, yesterday after-
noon. took up the suggestion OF Corpofa-
ton Counsel Allan L. McDermott III
reference to the more adequate protection
Of municipal bonds and laid it over lor
further action. The suggestion was con
tanned in the following letter 20 the
Board
~ +ba Honorable. the Board of Finance
zenflem en-AIy attention having peen
called in examining the ponoS q alotuS. tie,s
municipality to the system 81 eeFSlalI Martgage age
and Trust Company OF New lorA, ,,v to
uuested the president Of that company os ~
submit an offer for the certineafflont i ~ this Gs
civ and particularly of the proposes
issue for the erection OF ne" Is 81
School I enclose his answer ana earnss. ss.,
" recommend that the elements OF salesy
assaTSsd nv the plans of this company De
sac,,red IN. all future issues OF Jersey
Tsitv bonds. Tt has been adopted IN tae the
iss,iing Of bonds by Essex County, ey tns
lSt+,y of Passaic. by Franklin and Spring
Iai,a ,roNnships. in this State, and very
paneraIiy BY municipalities IN otnei
States. ...f,,,,,-
ALLAN l.. McDERMolI'
The answer of Mr.. George W. foune ~
brief said that the system had peen nlsn.s
successful in other cities and their oohos
had sold for a higher price. II nad peen
said that if certification were gooo II
sbo,,ls he done by new Jersey CITY
Trust Company, but said Mr.. Young $ re-
ply
..rha value of this company's system
1;es nat only in the certifcation itself. put
IN tha steel engraved plates which are Oh
fered for the use of the municipality ana
for which this company has paid the
a, large
srm Of money. enabling it to offer not
only its certificate, but the use OF the ni.e
engraving at the cost of good lithographic
work which other trust companies are not
able to do. To our knowledge we are tae
only company in this business, although
Others have attempted to make similar ar
rangements with the Bank Note company
without success.
eve venture to say that instead OF
new and needless expense, our ponos can
be furnished the city of Jersey CITY, IN
gliding certidcation, engraving ana an
charges, at less than they are paying at
the present time for a different class OF
work. The credit of the Trust Company
Is no way involved in the matter OF per-
forming the service of certifieatioh as
nothing is guaranteed, except that the
bond Is a genuine bond and that It mas
been signed by the proper officers. Corpor-
alton Counsel Mum, counsel to the Chos-
en- Freeholders of Essex county, has seen
1T 10 employ this company to certify four
issues. aggregating So. 500, oOO."
Mr.. McDermott in explaining the system
said that it was highly important that the
city's bonds could be certified by COM
pany of national reputation, for that
meant financiers would at once have all
doubts removed as to the legality of the
issue. The system proposed by the United
States Mortgage and Trust Company
meant that Jersey City's bonds could be
accepted with perfect confidence by in
vestors because each bond bore the certifi-
cate Of genuineness from a company OF
national reputation. Under such sys-
TEN, dealers were always willing to bid
higher for bonds. Furthermore experience
had abundantly proved that the cost OF
engraving and certifcation had been over
balanced by the increase in the premiums.
personally" added Mr.. McDermett, i
have no interest in the matter except that
for the city's good. II 1t came to giving
the certifcation to local concern would
naturally advocate giving It to one with
which I was Interested. 1t is simply a
question Of expense. The United States
Mortgage and Trust Company charges less
than we are paying today for the engrav-
ing of the bonds"
The Finance Board VIII at a future
meeting arrive at some decision.