The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1899-07-22

eide TO Ftcfund the CITY DeDt-Ctty
Receiver Forgey Answers Some
Structures on the Proposed Refund
Made by Another Cincinnati Firm
orBankers-Thc Compromise Loan
Yesterday the representative of a well
known Cincinnati Arm Of bankers was
in Wheeling, called here by the circular
letter recently Issued by Mayor Sweeney
ana Receiver Forgey. asking for views
on the proposed refund Of Wheellng's
bonded Indebtedness at three or three
and one-half per cent. The friends Of
the refund were greatly encouraged
when the Cincinnati man made the as
sertlon, after looking over the field here
thoroughly. that his firm would agree
to take the entire issue of bonds at
three and one-half per cent. AS the
present average rate OF interests about
5 per cent, the annual lnteres: saving
would be nearly $4,000.
The special council committee on the
refund Will likely be called TO meet In
u few days, Receiver FOrgey having
already received large number OF an
swers TO his circular letter.
In this connection, It Is timely to note
that there appears to be mlsappre-
hensIon in the financial world regard
ing she Wheeling Compromise loan
bonds, issued In 1860. Among the an
swers to the refund circular was one
from Rudolph Kleybolte, bankers, Of
New York and Cincinnati. Inthe course
OF their letter to Receiver F'orgey they
say:
CINCINNATI. O., July Is, 1899.
A. H. Forgey, Esq, City Receiver,
Wheeling, w. Va.
Dear Strive are in receipt of your
circular and take pleasure In answering
your queries to the best OF our ability.
Taking the various points in the order
they occur. we would fIrst quote from
u communication received from the
highest legal authority ION municipal
securItles) in the country, bearing on a
matter Of this same character, as tal-
lows:
I'VE would say. generally speaking.
that II the city has found any difficulty
In meeting Its obligations, 1t might very
well Increase It's tax levy, getting au-
thority from the Legislature III such
authority be necessary for that pur-
pose. II should also be possible for
the city to make retrenchments In Its
expenses In various ways without Grip
plIng or in1urlng the public service. In
the financial world, even n doubt or
suspicion OF the city's credit is enough
to produce great injury. whatever may
be the facts Cities that issue bonds
bearing 4 lower rate OF interest, are
able to do so only by keeping their cred
II unimpaired and having their reputa-
ton for prompt payment beyond any
suspicion"
Wheeling has already Issued Compro-
mise bonds, and the fact that by Its en-
deaVor to pay Its outstanding indebted
ness by refundIng before 1t Is due, Is
also in the nature Of compromise. We
realize that your city Is paying too
great a rate of interest; still, you have
contracted with the holders OF your
bonds to pay them the interest up to a
certain time, and there Is only one way
to keep your credit unlmpnIred (nhd
this would undoubtedly increase your
debit, and THAI is by buying In these
old bonds In the general market. To
get them in any other way, you would
be forced 10 default and "bear" the
value OF your own obligations.
We do not understand how, from your
statement OF maturities. you can con-
slider the debt as being paid too rapid
ly. The dates we note are 1900, 1901,
1907, 1911. 1915 and 1924, which do not
appear to be unreasonable, us each time
a bond Is due It can be refunded to ad-
vantage at a lower rate OF interest.
Respectfully,
RUDOLPH KEYBOLTE & co.
In explanation OF the foregoing and
In REPUTATION of It's unfounded as
sumption, Receiver FOrgey makes the
following statement. directed to the
Messrs. Kleybolte & Co.:
Nothing within the memory of the
present generation or. may say, OF Its
Oldest iuhRbltant, Is connected with the
financial history Of our city calculated
to reflect upon Its Sredit. The COmpro-
mise Bonds to which you refer are u
proud legacy, n token Of the sterling
honesty and integrity OF our Clty's leg
islators OF over forty years ago.
In the year 1859 and earlier very lib
eral subscriptions were made by the
city, in n spirit Of enterprise, to the
Marietta & Cincinnati. the Cleveland &
Pittsburgh and to the Hcmpheld rail-
roads, and issued bonds to cover the
amounts subscribed In each instance,
which bonds were paid over to the re-
spectlVe roads,
Before many OF these bonds mntured,
certainly before the roads were COM
pletCd sufficiently to benefit the city In
any way, the panic OF 1857 occurred.
Fortunes we're lost rapidly. established
hunkg
and bankers ruined, states and cities,
towns OF much greater pretensc than
Wheeling compromised with their cred
itors and In some instances repudIated
their bonds in entirety.
This state OF affairs continued for
over four years. In the meantime the
civil war broke out, adding to the dis
tress OF the country and more espe-
clally did those OF US living in this part
OF Virginia close on the borders OF Ohio
and Pennsylvania feel the effect OF the
combined horrors OF panic and war. on
the 18th OF March, 1850, one year before
the beginning Of the war, upon petition
Of our city council the general assem-
bly, OF Virginia passed an act to enable
the city OF Wheeling to compromise
with the holders OF the railroad bonds
aforementioned. From the wording OF
the act, some doubt existed MS TO the
legality OF the railroad bonds. The
legislature hnd legalized the subscrIp-
ton but had not authorized the Issuance
OF bonds. The compromise act was
necessary to legally or, you may say,
heal the Issuance and by II the city of
Wheeling agreed to pay dollar for dollar
the bonds issued 10 the railroads.
Presumably II the bonds had not been
issued ana gotten into the hands OF In
nocent purchasers the city would have
been Justified In repudinting It's sub
acrIntton to one OF the rOnds ut ienst. as