The Savannah morning news. (Savannah, Ga.) 1900-current, 1904-12-29
To SAVE CITY
LARGE SUM
ON BONDED INDEBTEDNESS.
MAYOR MYERS HAS PLAN OUT
LINED IN HIS MESSAGE.

Most of City Bonds Expire in 1909
and Mayor Believes Exchange Can
BE Effected Now, Giving Bonds
Bearing Smaller Rate of Interest
for Old ones-City Would Save
over $4,000 n Year by Transac-
ton.
A plan has been devised by Mayor
Myers. which he will present
to Council in his next annual message.
whereby the city will save over 100000
every year on its bonded indebtedness.
Such a large saving means
that much can be devoted each year
TO public improvements. instead of be-
ing paid into the pockets of the city's
bondholders, as is now the case. With
in four years over 100000 will have
been saved and $4,000 will pay for
an immense amount of paving, or
other improvements.
The plan. which the Mayor will sub
NIT to the aldermen, involves the ex-
changing of outstanding bonds for
new ones. bearing a lesser rate of in
l6EESls anu Will ItGCSSltdLS SpCNLel
act of the Legislature. The securing
of such an act would be an easy mat
ter, however.
What One Per Cent. Would Mean.
The city's bonded indebtedness at the
beginning of 1904 was $3,06S,5 all
bearing per cent. interest. OF these
S2,S04, 100 worth expire in 1909, while
the balance of them expire in 1903.
About $4,000 worth of bonds have
been taken up this year, so that the
total bonds outstanding at the close
of the present year will be approx
mately $3O2S, 500. If on this amount a
saving of only one per cent. on the
interest can be made. it will amount
to over $4,000. the interest on $780,
600 at one per cent. amounting to ex-
actly $4,000.
AS absolutely secure bonds are al
ways in demand for the investment of
trust funds, Mayor Myers believes the
holders of Savannah bonds would be
willing to exchange at once the bonds
they now hold, which will soon mature,
for bonds bearing a lesser rate of in
lCIbSls Uul WHICH Will nave many years
10 run, before maturity.
The saving of Interest.
When the outstanding bonds mature,
the city will have to issue new ones
to take the old ones up. If the ex-
change can be effected before the date
of their maturity, then the difference
in interest can be saved.
Mayor Myers is satisfied the ex-
change could be made with the new
bonds bearing per cent, or perhaps
less, instead of 5, as is the rate for the
bonds now outstanding. Bonds bear
ing lesser interest might be issued,
only Savannah cannot sell her bonds
below par, as can some other cities.
The Mayor is satisfied the exchange
could be effected with most of the
holders of the old bonds. If this can
be accomplished, the necessity of fore
ing on the market large issue at the
date of maturity of most of the bonds,
1909, will be obviated.
Would BE Benefit to Both.
Forced on the market. it might not
be possible to get the par value for
the bonds that would have to be sold
at par. So not only would the inter-
est on the bonds from the time of ex-
change to the date of maturity be
saved, but the placing of the bonds
at their par value would be insured
The city's benefit from the transac-
ton is very apparent but there is al
so a benefit the Mayor thinks the
bondholders could easily be made to
see that would accrue to them. In
stead of having bonds, absolutely
gilt edge, which are to expire in four
years, the holders would have bonds,
equally good, which would have
thirty years to run.
years to the bondholders would
amount to little in comparison with
the benefit of securing a thirty-year
investment of the very best character
and an investment that could at any
time be disposed Of