Omaha daily bee., 1902-07-25
DEAL IS STILL OPEN
County Commissioner Unsettled a. to
What They Shall Do,
BROKERS SAY UGLYTHNes ABOUT MATTER
Call COunty's Proposed Course Re-
P~udiation and say IL Will Hurt
Financial Standing
Beyond Remedy.

County Commissioner A. @. Harte, chair
man Of the finance committee Of the board,
favors declining to longer pay 5 per cent
interest on the %refundlng bonds issued in
1887. He would offer the holders thereof
the choice between exchanging them for
new ones to run twenty years from this
last June a. 3% per cent or going into the
federal courts to sue the county on the
old bonds. In the latter event Harte be-
lieves the county could win because Attor-
ney General Prout has declared the issue Of
1887 to be illegal by reason Of its having
been made under the act Of 1885, which
was void because. he holds, 1t sought to
amend the act Of 1877. which had been re-
pealed by implication by the broader act
of 1888.
Bond dealers hold that this attitude of
Harte's Is practically one Of reputation
and insist that II adopted by the board
o~ficially It will work to the extreme detri-
ment Of the c~ounty's standing in financial
circles, which has always been high, they
say, because Of the fact that never has
the county defaulted or repudiated. So far
as the Prout opinion is concerned. they say
that It cannot Offset the fact that for hf-
teen years the county has acknowledged
the validity Of these bonds by paying the
interest on them twice a year.
Board Lacks Information.
Members Of the board say that something
will be agreed upon in time for formal
action by the board at It's Saturday meet
ing. but there seems some reason to be-
lieve that conclusions will be dlhhcult OF
attainment, because of the absence OF
knowledge OF the present status in the
process Of exchanging the new bonds for,
fha ola XoIIv a KnIIu vutNA uyhop, cha
agreement was made, stated that they had
all but about $40, 900 OF the $26s,OO0 of the
issue OF 1877, and consequently that Arm
was expected 70 corral the rest and max
the complete exchange by July 1, yet up to
this time the county treasurer has received
only s $4,000 Of the old bonds, cancelled.
These came with three letters from the
bond clerk In the ONCE Of the auditor OF
public accounts at Lincoln. The letter
stated that forty-seven were exchanged on
July 1, twelve on July 9 and twenty-five on
July IL. Where the other 1874 bonds Of
81, 900 each are held neither the board nor
the county treasurer know.
They assume that they are generally
scattered and will be coming in later and
on the accuracy OF this assumption appears
to rest the c~ounty's immunity from a law
suit. II some of the holders thereof de-
eide that II is more desirable for them to
get 5 per cent for five years than 3% per
cent for twenty years, and II the board
takes Harte's attitude, declaring 1t a case
of exchange or get nothing at ALL there
will be no other way out than through
the courts. Harta seems in no way
alarmed by this prospect and Connolly
seems rather to relish the idea of fighting
Ferson Leach again In court, but a local
financial man makes the prediction that
in such a suit the county will be whipped
OUT OF its boots and suffer heavily in
standing besides"
Bond Dealers views.
1.-THE board members, he said, ARE be-
Ing influenced too largely by their dislike
for Farson Leach and the previous victory
over his company. This isn't a parallel
case and a great many people beside Far
son Leach are probably concerned"
The latter part of this statement is yeri-
ned TO some extent perhaps by information
In the possession Of the sounty treasurer,
who has observed on some OF the coupons
paid In the past the stamp OF a bank in
GAINESVILLE. o., and others who seemed to
be Negotiating wholly through Kountze
Bros. of New York. which firm is the fiscal
agency for Nebraska and some other west
ern states.
And here again Is trouble and CONFUSION.
The agency is reported to have declined to
pay interest on the old bonds due July 1
and nobody about the court house knows
why. The attorney for Farson Leach re-
ported to the board that when his clients
sent in their coupons the agency sent them
back accompanied by the boards formal
declaration that the issue had been illegal
and by Attorney General Prout's opinion
to the same effect. George w. Hoobler Of
Omaha had a client who owned $1,000 Of
the bonds and who was treated in like
n by the agency.
Board Hasn't Inquired.
The board doesn't know and hasn't writ
ten to learn why this occurred, but con-
siders that 1t Ia free from responsibility
because the county treasurer has sent the
money with which to make the payment
II the fiscal agency is 30 disposed. At the
end OF every six months the county pre-
pares to pay sac, 427. so interest on bonds.
OF this, 81. 900 is sent to the state treas
urer and 31,s76 to the Merchants National