The Savannah morning news., 1901-06-13
RRUNSWICK'S BOND ISSUES.
story of the Financial Crises of the
Ctfv


City.
Brunswick, Ga, June 12.-The discus
sion aroused by statements in these dis
patches yesterday has had the effect OF
bringing UP some other financial TRANSACT
tions of the city. The transactions re-
ferred to date back to 1878. and cover the
whole range of city bond issues. There
have been three distinct financial crises
in Brunswick's history These crises
covered dates in 1875 1891, 1894 and 1901.
In 1915 the city was confronted with prac-
teal bankruptcy, having Endorsed some
old railroad bonds and the bondholderS
were threatening to come down on the
town. The Finance Committee, composed
Of Alderman duBignon Watkins
and Copper, secured compro-
mise, and wiped out the old
indebtedness with an issue of $50, 600, thir-
ty-year per cent. bonds. 1t was ex-
pressly provided that no other bonds were
ever to be issued by the city until this
issue had been paid. For some years the
city set aside the prescribed amount of
taxes as provided by law for this sink
ing fund. but the fund finally was allow
ed to drop. At the time the sinking fund
was dropped the indebtedness had been
reduced to $62 $50. About 1S91-1S94 the city
issued $500, 900 worth of bonds for sewer
age purposes. Seventy-five thousand dol
lars of the new issue was set aside to
cover the balance due on the 1878 COM
pact, leaving $225. 900. Seventy-fve thou
sand was then taken for what was known
as the Penniman drain, and other pur-
poses, leaving $4,000 for sewerage. I'm
der the contract with Herbert Tate the
sewerage was to cost $l60, 900, and the eX-
ira $4,000 was to be paid in cash
Instead of paying in cash, however, SILL
900 worth of bonds were given to pay the
$4,000 debt.
Following this, on March II. 1898, the
Council authorized the Mayor and Alder
men to hypothecate any of the per cent.
bonds for any promissory note or any
obligation in writing" This was direct
violation of the compact of 1878. The
Mayor and Council hypothetical SAC, 900
of the trust bonds for a loan of S31. 500
and these bonds, thus hypothetical, were
threatened with sale a few weeks ago
when the holders were notified that the
collateral they held had been given to
them illegally, and If they sold this col
lateral thus illegally given, the city would
hold them for the entire amount of the
securities sold 1t is easy to surmise what
action the holders would have taken to
recover from the old City Fathers had
they sold them, and the new adminStra-
ton sued and recovered the $40, 900 worth
of pledged securities. The securities were
not sod and subsequently they were Sc
cured by Chairman duBignon, and are
now in the custody of the city.
OF the bond story there remains to be
told that in four months after the pres
ent administration went in office Chair
man duBignon had in possession for the
city, $4,000 worth OF trust bonds that
were issued. but have never had the seal
of the city attached a one-thousand-dol-
lar bond that has the seal attached and
was probably used and returned to the
city and $4,000 in bonds that was n.y.
pothecated for a loan and returned on
demand when other security was given in
their pace, making with the eleven thous-
and paid Herbert Tate the total of $75.>
600 5 per cent bonds that should be in
the treasury to pay the 1878 per cent.
bonds that accrue in 1908.