New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-04-27
GIFT TO THE BOND TRUST.
ITS PROFIT, SI,e5O,00O.
MCCLELLAN and GrOut Criticised for
Big Stock Sale Noe.

The issuance all at one time OF Sof.VcO,ccO OF
city corporate fifty year 31z per cent stock when
the market for city bonds is at low water marx
Is creating no end OF gossip among the Wall
Street brokers. who do not expect 10 be bene-
atee I'm any manner by the sale. which takes
place on May g. Nothing that the Mcclellan
administration has attempted up 10 the present
time has done more to create the suspicion that
Controller circuit and Mayor Mcclellan have
been vvofuIly nl advised than this sale to take
place on Tuesday.
There are conservative brokers who freely
predict that the sale VIII give four bond buying
houses an absolute monopoly Of city bonds Tor
the next twelve months enabling them TO cIe'AF
more than Sl.2JO0O0 in extraordinary profits.
and make It extremely dificClt TO get the TOP
price for city corporate stock for the next year
or eighteen months.
II is Che opinion OF the brokers that not more
than 30 Der cent Of this S3T CO0o00 win actually
be needed this year. and that this same cor
porate stock which is not likely TO bring more
than 1908 dhe last lot brought loO-p, VIII be
selling before December J at los. If this pre-
oiction is FULFILLED. then it means that the NC
Clellau administration. on account OF mex
raca5le impetuosity to get in out Of the Wet
vithxsts bond sale. has sacrificed in round hg-
ures about S1.7J0.OOO IN premiums
socr after the Presidential election IN 1900
CITY corporate fifty year stock sole at between
1ns eod 1O7 In the last two years the price or
fha city's new securities has steadily sagged.
The Frtae reached low water mark two months
ago vixen the bonds brought an average price
of only 500 10 for each 500 OF bonds. The Nc
.-lellan administration this year secured the
passage Of an amendment to the charter per
rrttting the selling OF the bonds under the all or
none" system. Under this system there is likely
n ne a blanket bic by one Of the local bond buy
TfnC mill
divided I'D among a syndicate. The huge vol
uine OF the issuance. coupled with the fact that
Il is not a propitious time Of year 20 sell bonds
rrecludes the hope that the price viii he much
above that Of the last sale.
cal money can be borrowed at from / 10 IA
The bonding syndicate. which is understood TO
be ready 10 buy the entire lot a low figure. can
take over the citys corporate 81 stock and then
immediately use it collateral up TO about 10
per cent Of its face for cash with which 10 pay
The CITY. Furthermore. it is understood that
the banks which take the city stock after dem
onstrating that they have the money, viii be
allowed TO keep on deposit The greater amount
!. Of the purchase price within their own Golfers
The city receives , per cent interest on its
money on deposit with local banks. Then viii
be presented the somewhat interesting spectacle
Of the city receiving per cent for its money on
deposit and at the same time paying the stpu-
hated 81 per cent interest its bonds. The
cftys securities viii be carried without interest
cost by the syndicate, and an advance over the
purchase price viii be just much clean profit
In the fan there is sharp demand for city
corporate stock. The tax rolls are adjusted after
the first week Of January Security holders IN
this CITY have become used 10 transforming tax
able personal property. into non-taxable cor
porate stock between December ! and January
Ia thus escaping taxes This use fer city cor
porzte stock. which is nOn-taNable for all city
puro lases. makes an extremely Lively demand
Tor n and the price is likely TO go 10 lO4, which
would stn be under the price OF four years
ago. -.
Latterly. the bond buyers interests in this
city have been protected by the placing OF the
citv's short term revenue bonds with foreign
bankers. Last year about S2eOOOOoO OF these
short tern bonds. which the city had 10 pay
al the rate OF between and per cent. were
sold abroad. When Controller Grout was seen
YESTERDAY he maintained that il was good bust
ness policy. when all things were considered, 10
sell the entire $50 100000 al one time.
The city needs the money, and the money
ma l1et always is upset I'm A Presidential year,
said Mr. Grout. For that reason IL was con-
sidered wise 10 sell enough bonds at one time
10 furnish the city all The money il viii need
Tor the next ten twelve months. think the
bonds VIII bring a better price than was real
ized at the last sale two months ago