The record-union., 1899-01-15
CHAMBER OF COMMERCE.
REPORT FROM COMMITTEE ON
BONDED INDEBTEDNESS.
&esolutions Indorsing the Testing
Of the Filtration Of
River Water.

49,
"A special meeting of the Directors OF
fhe Sacramento Chamber of Commerce
= was held yesterday, ten of the members
being present.
PRESIDENT Lindley stated that the OBJ
1ect of the meeting was to consider a
report from the Committee on Bonded
Indebtedness, which was as follows:
Sacramento, Jan. 13. 1899.
To the Board of Directors, Sacra-
niento Chamber of Commerce-Gentle-
men: Your Committee on Bonded In
debtedness, appointed last February,
pursuant to a request from Mayor
Land, for the purpose of looking into
the status of the old city debt and the
proposition to refund same (hen under
consideration by the Mayor and the
Honorable' Board of Trustees). beg
leave to submit the following report:
The entire situation was carefully
considered by this committee, and much
aid was rendered it by various attor-
Eeys of this city. The propositions con-
sidered, with our conclusions, recon-
me ndations and reasons therefor, can
be enumerated as follows:
II
debt was considered first. and opposed
for the following. reasons:
(a) The city was, under the decisions
rendered, paying interest only on the
face value of the bonds, as the accumu-
lated interest on the bonds of 1889,
amounting to over 5000 on each 1,0OO
bond, bore no interest. To refund un-
der these circumstances would require
the issuance of new interest-bearlng
bonds, covering not only the face value
of the old bands, but also the accumu-
lated interest.
tb) I'm view of the fact that one more
taXsslevy would practically extingulsh
this entire debt, it was deemed unWise
to postpone it's payment for an add1-
tional forty years by refunding.
(c) To have refunded the entire debt
would have prevented the attorneys
engaged, in the cases pending from
prosecuting the same under their con-
tingent contract.
Second "A large amount of money
had been permitted to accumulate in
the City Treasury, applicable to the
payment of the bonds in question,
awaiting the decision of the, Supreme
Court, in the case of Kendall VS.. Por-
ter, Treasurer, as to whether these
bands bore interest after maturity.
IhirdAThe vast sum of money in
volved warranted the city in resisting
the claim of the plaintiff, by presenting
the case in the best possible form.
Fourth-In addition to the able local
counsel engaged in the case, the officers
of the city entered into a contract with
Messrs. Bishop & Wheeler whereby said
firm was to be paid a fee of 2o,oOo,
contingent upon the case being decided
III favor of the city.
Fifth-The case was in the Supreme
Court upon demurrer regarding inter-
est, and the court had decided upon the
first hearing that the bonds bore inter-
est A rehearing was subsequently
granted, and the case was second
time decided against the city by a ma
jority of the court in bank.
Sixth-The sentiment prevailed that it
would be unwise to longer carry the
large sum of idle money in the Treas
ury. in the face of the decisions rem
dered
Sayenth-We therefore advised that
the idle money in the Treasury be used
in the purchase of the bonds of 1893,
for the reason that the accumulated in
terest thereon amounted to only one
half as much as was involved in the
bonds of 1883, and because any statute
o. limitations would be more applicable
to the latter series. Upon learning that
the purchase of the bonds of 1893 had
been consummated we gave the action
our approval
Eiehth-After the decision by Judge
Hughes that the Statute of Limitations
did not run against the bonds of 1883
we advised that the bondholders be Of
fered for the bonds of 1888 the face Of
the bonds and one-half of the disputed
interest. This offer, we learn, was made
by the Funded Debt Commissioners,
ard was rejected by the bondholders.
Ninth-We were recently informed
that the Funded Debt Commissioners
had purchased nearly all of the bonds
of 1888. but we were not advised of the
price paid, and are not familiar with
the terms and conditions of this trans
action.
Tenth-The status of the debt at this
time Is as follows. The city owes on
account of this old debt the following:
OF the bonds of 1888. ......... .$45, coo
OF the bonds of 1893. ........... 4,OCO
Or the bondS OF 1S3o- o,ooO
OF the bonds of 1903. .......... I9,4OO
Eleventh-The holders of the bonds
due in 1908, amounting to $40, 400, re-
fuse to accept payment thereof until
the bonds mature.
Twelfth-There will be more than suf-
ficient money coming into the Treasury
from the present tax levy, and from
some ether sources, by July 1st of the
present year to pay all other old bonds
and accumulated interest.
Thirteenth = The contingent contract
entered into with Messrs. Bishop &
Wheeler is still in force. and We are in
formed that said law firm contends that
the pending litigation will ultimately be
decided in favor of the city.
Fourteenth-We therefore respectfully
recommend that at least $4,000 worth
of the bonds of 1888 remain unpaid. and
that S25. 900 coin or assets remain In
the City Treasury. to be ultimately
paid either to the attorneys under Their
5oc,rtract If successful, or used IN the