The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1906-08-09
Few things are impossible to dlll-'
DIR. johnson.
Richmond City Bonds.

:, ID . ~.
q Gil ga Oh Monday night on tho PROPOSED
electric plant, Mr.. II. r. Pollard, Jr.
speaking for the Finance Committee
snid that this was no time to sell new
city bonds. Mr.. Pollard alluded TO the
L very low price at which the last issue Ssh
Of New York City bonds wore sold as an
Indication Of the declining tendency OF
securities OF this class. Mr.. Pollard also
4 called attention to tho slight margin loft
In our bond limit and pointed out the de-
nlands that the High School and q Gas
Works would make on this unexh ll 'tt
I surplus. 55 ia5
Mr.. Pollard Is right. All classes OF
bonds, municipal and otherwise, are de-
pressed and tile reason is not hard to
# ind. While ''call" money In New X ork
is low Mt the moment, tmo loans on
n collateral are bringing from s to u IL
per cent. Financicrs are not disposed
B to purchase bonds yielding less than 70 four Y
II Der cent when they cnn lend their money
4 on git-edgcd security for five per cent.
Moreover, speculation In stocks and real
II estate Is very active, and many men With
money at their command prefer I Q Z eln-s
ploy it in this way, instead OF locking
IT aup in low interest BOMBS, which offer
no inducement as speculative invest
Il ment. IL 43is st;s sS5
This condition, which affects all securi-
lies, naturally affects Richmond bonds
also. AS money grows 'oasier" the mar =, y
ket will no doubt improve, but the fact
remains that present conditions are not
favorable to tho marketing Of bonds.
Richmond S bonded debt on January 81,
1861, was s7,57e.c47, and her sinking fund:
was sl.lo7, 7es. shewps then within 81 1872
Oo4 Of her bond limit, not taking the sink INK
ing fund into account. and by the way,
the sinking fund should never be con-i
1 sidered IN connection with our bond mar
{ gin, for that fund Is invested In Rich
n1ond bonds, and the securities thus held
are as much municipal obligation as.
any other outstanding city bonds. We
now have a bond margin Of 81 ,l93 O04, but
the Council has already authorized the
issuance OF s5OS.50O Of bonds to provide
for the new gas holder. the High School
building, tho settling basin, and other I'M
provements. It is also understood that
there must be another issue Of at least
$500 600 in the near future to provide for
v the rehabilitation Of the gas works. q It
Y IS apparent from this that when nll these
bonds shall have been Issued our mar
gin will be very slender, although It Will
I, be increas9l somewhat from year to year
as assessments Increase. But5at best the
Council must be very conservative In.
Issuing new bonds during the next few
years.
The bonds already authorized have not
yet been put on the market but they
must be sold within the next several
months, ana on or before January !, 1907,
we must sell $4,000 OF new bonds to re-
tire like amount Of old bonds which
will mature on that date. Again, on or
before July !, 1907, we must sell another
issue Of slss,ooO for similar purpose.
1t appears, therefore, that within the
next twelve months Richmond must offer
on the open market bonds aggrcgating a
million dollars or more, and II the bond
market does not improve. we may have
trouble, for the law provides that now
bonds issued to retire old bonds must not
DO sold for less than par. II we cannot
sell n per cent. bond at par. we must
raise the rate of interest. It Is inconceIv-
able that any condition Will arise with
in the year which would put Richmond
city bonds below par, but the prudent
man takes note OF all contingencies and
provides 40 far us possible against them.
( Richmond's credit IL Al, Her assets are
more than sufficient 90 wipe out every
dollar of her debt. and by 1920 her mink
Ing fund will be ample TO meet all out
standing bonds az they mature and until
the entire debt Is extingu!shed. But far
the present she must go slow In issuing
new bonds. and she should not offer any
OF her securities for sale under existing
conditions until she Ia compelled to do 80.
Brick ar Cnncreta