The Salt Lake tribune. [volume] (Salt Lake City, Utah) 1890-current, 1906-06-15
A STUPID DEFENSE.

tense of their bond deal They sold
the other day s350,OOo OF refunding
bends OF Salt Lake county. After cali
ing for bids on these bonds. they
awarded the sale to a concern which
took them on four and a hnlf per
cent interest basis. After the bids were
opened. the Commissioners went into
secret session and allowed representa-
tiyes OF some Of the bidders who were
here TO add to the bids certain induce
1nents for awarding them the contract.
Among these inducements was a pres
cnt concession amounting TO sS960 and
q. free trip for two OF the Commission
ers to the East.
Another bidder put in a straight bid
for the bonds OH the basis OF four and
one-cighth per cent. The refundlnG
bonds were to run twenty years, The
difference between four and one-eighth
per cent and four and one-half per
cent, II we allow for all the subsequent
personal concessions made by the rep
reSentatives If the bond houses pres
ent Uhese concessions having been
made after the bids We're opened), we
still find that the county VIII event
ually pay on the twenty-year basis
s170 600 moro In fulfilling the contract
entered into between the Commisslon-
ers and the firm to which they awarded
the bonds, than the county would have
paid in a clean, straightforward ac-
ccptance Of the four and one-eiehth
per cent interest bid
To avoid the force OF this. the Com
missioners now urge that the bonds are
redeemable after ten years; therefore.
they say that the bonds can be taken
up at tho end of ten years and a new
issue made for four per cent. This ilS
ures out a couple of hundred dollars
or so in favor OF their action. But
what assurance is there that ten years
hence they can sell bonds on a four
per cent basis? II it is merely the pur-
pose to excuse their present bad finan-
ciering why not say, as they could
just as We'll say, that ten years hence
these bonds could oe sold on a three
per cent interest basis, or even a two
per cent basis. for that natter AS
long as one goes into the wild guesses
ot ten years futurity, what is the
particular use of restricting the low
ness Of the interest rate TO four per
cent? Two Per cent would make Il
much better showing. The Commits
sioners do not deal with futurty, but
with the present. The childishncsS Of
that kind of fnanciering. the ridiculous
folly of making that sort of a state
ment as present financial showing. Is
too patent to need any argument. The
plain fact is that the contract was
awarded on the twenty-year basis.
There is no likelihood that the bonds
will be taken up at the end of ten
years. or refunded II the attempt to
do so was made, or that more IA
vorable rate than four and one-half
rer cent could be had. 1t is wholly a
matter of guesswork and entirely out
side of the domain OF present finan-
this,
Besides that, the Commissioners were
guilty OF doing this business in secret
so that the public does not know even
now just what quirks and bubbles and
disadvantages it may have to face i'm
the future. 1t Is true, also that the
representatives of the bond buyers who
were present were allowed TO come In
after the opening of the bids and amend
their bids TO the disadvantage of those
buyers who did not have representa-
tives on the ground To allow conces-
sions to be made after the bids were
opened, was in law TO reopen the whole
question. IT was accepting an amend
ment OF bid without any public notice
and without any warrant of law. The
advertisement put out by the Commis-
sioners was. and Its only lawful effect
could be, to the purport that the bids
that were opened at the time speci-
fed were the bids that would be con-
sidered. 1t was no part Of the trans
action that the representatives Of the
bond buyers who might be present
could come in and add to or take away
from the bids as submitted. IL was
unfair to the bidders who were trust
ing TO the good faith of the advertise
ment and the honesty of the Commits
sioners, The effect OF 1t must neces-
sarily be TO dIscredlt Salt Lake countys
financial management. and If at the
end of ten years or any other time,
Salt Lake should attempt to advertise
for bids on refunding issue or any
issue OF bonds, the bond buyers would
be wary Of bidding unless they were
prepared TO send representative To
this city TO be present at the opening
and have an opportunity 10 add or
take away by word of mouth from the
offers made. sealed and delivered
II Is bad business all around. Bad
for the financial repute OF the county.
and bad for the taxpayers VINO Will be
required to put up $1,000 additional in
terest money because the County Com
missioners were not financers, did not
act in good faith, and have put the