The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1900-02-23
COULD NOT SELL BONDS.
Not . Single Cash Hid Made From
Any source for Tacoma's Pro-
posed bond Issue.

SPscial pispBtch TO the Observation-Disclosures.
= lACoMA. Feb. 22.-The city OF Tacoma
nnds itself in the embarrassing position OF
oHering for sale a bond issue OF 81 800 600
WITHOUT single cash bid being submitted
land.
The nearest to an offer yet made is the
conditional proposition OF Seymour Bros
Co., New York brokers' who offer 10
take the bonds, providing they can ar
range with the holders Of the outstanding
bonds
City officials and the public generally
were considerably surprised when the sew
eral bond brokers who were here last
week failed TO submit single cash bid,
inquiry develops the fact that the present
situation IL directly due to several causes
First, the unfortunate warrant litigation
In which the city has been involved for
several years. and which threatened at
one time to result In the Reputation of
at least the so-called "reissued' warrants
or the Boggs treasury administration. In
the summer OF 1895 the crisis came in "A
court decision to the effect that the city
need not pay these warrants The Union
Trust and Savings bank, which. pinning
Its faith to the cftys financial honesty,
had invested the major portion OF its cap
ital stock in city warrants at once sus-
pended on the basis of these warrants
the bank had issued per cent. debenture
bonds which We're purchased and are still
held by the New York Life Insurance Com
pany. This IL one OF the holders OF the
city warrants which refuses 10 exchange
Nicol. organizer and manager of the Union
Trust and Savings bank, who is now
salaried officer of the New York Life, ar
rived here today TO assist In Strengthening
out the warrant-bond tangie. very In
teresting feature of the situation is the
fact that. less than four years ago, Mr..
Nicol offered. with the object of saving
mis- bank. to throw off all interest on the
$4,000 OF warrants held by his bank and
TO take per cent bonds IN exchange tor
them. The city Indignantly refused and
Mr. Nicol was considered a bloated mo-
nopoist for making the proposition. Later
the entire bond controversy was taken to
the supreme court. which rendered a de-
cision several months ago holding every
warrant valid. In consequence. the war
rant holders are held TO be entitled TO the
city's present income, and through "A re-
straining order even the payment OF sal
aries and current expenses has been stop
ped. This condition brought about the
bond issue and the present attempt to sell
them and then settle with the warrant
holders. A little nguring shows that the
city would have saved about $4,000 by
accepting Mr. Nicofs proposition OF four
per cent interest on these same warrants
TOR seven years and the present bonds will
bear 8 per cent. interest, whereas his Of
fer was to take per cent. bonds.
The outstanding warrants aggregate
about $4,000, which. with the interest at
and 10 per cent, makes total indebted
moss OF N.2m.QN number OF business
men and others advocated the funding OF
these warrants as early as 1896 or ls9t. but
were laughed at by the short-sighted peo-
PIE Who claimed the city would never
have 10 pay them, The holders OF all
these warrants number between 500 and
800 banks, trust companies and estates.
scattered through the Eastern states The
majority OF these want their money, and
are disposed TO insist that the city's
finances remain tied up untll they are
paid
The only way out OF the dilemma. SO far
as can now be seen, Is the acceptance of
the ofier OF Seymour Bros, 4 Go. Their
plan is to get all or practically all Of the
warrant holders 10 exchange their war
rants for bonds then giving seymour
Bros. n Co. an option on the bonds for
SAX months. In which time they viii en-
deavor TO sell them seymour Rros. would
profit by charge % per cent for SELF
ing the bonds 10 b. borne by the Variant
holders. and also by the possibility OF get
ting a premium for some OF tho bonds.
A second cause of the City's uneRViAhie
reputation IN financial centers grew oat %
the "milliou-d dollar suit ~ several years
ago. whereby the city attempted 10 force
& Y. Wright to return a portion OF the
ST. $50 90 paid for the light and water plant
In tSa3 Some OF these bonds have been
SOFA, aud Il L. claimed that this suit AZ
bonds Previous 70 this the bond houses
OF New York had secured the passage ~
. law BY the Conneeticg. tvssstatuts aa-
thorizing the purchase 81 the bo'sss ~ Ia
coma. Seattle ana spokane ~ LEGAL tn
vcatnleMt for savings banks aud trust
FUMES tn that state. The "milllon-douar
caused the repeal 81 This law thereby
greatly limitinS the market for the securi-
ties Of Tacoma aud other Washington
eitieA
n aisa trAus pires though the fact ls NOT
generally known here. that Pierce county
has defAutsd In the payment OF tvs bond
interest to the extent % requiring the
holders OF county bonds to send their oou.
ponS TO Tacoma for payment instead x
having them paid az the Chase National
hank az New York the place or payment
named Ia the bouds This results from
county treasurer stephen Judsou's refusal
30 pay the chase National hank SIS AZ
Zee for distributing the bond interest
money.
municipality OF Tacoma g. lsaruing ~
have many Western towns before her,
that a atlly-dsllying po%icy I'm financial
matters "A an expensive one in the end
The reputation OF school district No, 10
remains rirst class The school hoari today
sold 70 r. II Rollins & Sons. OF Boston,
an issue Of 500 GO tweuty-yesr sold fund
inx bonds. bearing "a per cent Interest.
The district receives slight advance oVer
par.
SONS OF AMERICAN REV oLurIoN.