The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1907-05-18
CITY WARRANTS
At BIG DISCOUNT
Salt Lake Seems on Verge of
Serious Financial
Trouble.
BIRCH DEMANDS HARD CASH
CONTRACTOR WANTS REAL MON
EY FOR WORK DONE.

Warrants of Salt Lake City are selling
at from five to ten per cent discount at
the local banks. with few takers. Scrip
is quoted at from 20 to 30 per cent discount
with no takers.
This condition has existed for a consid-
cradle period and is growing worse.
short time ago warrants could be dis
posed of by holders at par or only slight
discount and scrip was taken al from 10
to 10 per cent below par. Far seeing mem
bers OF the city council will tacitly admit
that the city is I'm a bad way financially
and It is known that the administration IS
straining every nerve TO maintain the
citys credit, which has never before been
so low.
At the recent secret caucUses of the
American party COuncilmen and city OH
GERS this problem was considered in all its
aspects. For a time it was thought that
a remedy had been devised. 1t was 20 call
/ in all the scrip issued and substitute Tor
/ it warrants. But this hope has passed Tor
the time being because the banks will not
handle this paper without exacting large
discount What is to be done no one
seems to know. but all admit that it will
take heroic measures to keep the snip
/ of state aflOat until election.
Holds Up Public Work.
! This lack of faith on the part of con-
! sentative bankers in the citys ability 10
7
/ portant causes for the holding up of pub
/ lie work. The sidewalk contract held UP
| by S. Birch is case in point Mr.. Birch
has twenty miles of sidewalk uncompleted.
/ He refuses to go ahead because he cannot
| secure any money from the city.
1.-THE city owes me $4,000, and = will &C
/ cept nothing but cold hard cash" he said
/ last night.
How long since you have received any
money!" he was asked.
/ 'The last payment to me on my 1906
work was made last December. partly in
scrip and partly in warrants. I was able
/ to dispose OF the scrip at about 10 per
| cent discount and the warrants al par.
/ Now l can't sell the warrants much above
a 10 per cent discount and the banks
went accept the scrip at ALL
All Time Warrants.
/ Mr. Birch explained that the warrants
which the city has been issuing are all
time warrants. He did not say however,
that which everybody knows that the city
lcannot issue demand warrants to any eon~
siderable sum because If a demand should
be made suddenly the city would be un-
| able to meet it.
don't want any scrip continued Mr.
| Birch II want cash and when / get it
| and am assured that it will be foTthcOm
/ ing regularly | will go ahead with my I'M
/ completed work, and do it UP right he
| added. I am mighty tired of fOoling
around with warrants and such stuff that
| Will only bring me part of the money
| due me-"
Money in the Bank.
The report of the city treasurer for
| April shows that at the close Of business
April 80 the city had approximately 500
900 on deposit at the local banks. II is
divided among the various funds and the
street fund has about $4,000 to its credit
about half enough to pay for the city
portion of the work now under way.
The city has money, but it can't use it
to maintain its credit.
Another complaint made by Mr.. Birch
is that. although he was ordered paid I'm
| warrants some time ago and although
several estimates have been approved.
the city auditor refuses to issue the
warrants because he doesn't concur in the
attorneys opinion that they are legal
The auditor is also blamed for failure to
get out warrants even after their legality
has been proved. Weeks and weeks have
elapsed between the order and the is
suance of warrants. Contractors have
been angry. but their anger has done no
good. as the auditor did not increase his
speed.
The fact is that the longer the issuance
of warrants is delayed the more time the
city will have to catch up a little.
Nature of Warrants.
It might be explained in this connection
that warrants are issued for a definite
period and are repayable in five Install
meuts. They bear per cent interest and
are issued in values of 81, 00G At the end
of one wear 800 with interest is due but
the city has the option of taking up the
entire warrant at that time or at the end
of any annual period.
Scrip is issued against the individual
tracts of property assessed for SDeciaI
improvements. It has no definite time OF
redemption, and bears 6 per cent interest
! Much red tape is necessary before the
holder can obtain cash, and the redemp-
ton is only made when the property own
ers against whose property the scrip IS
drawn pays his assessment. For this rea-
son scrip issued today may be called in
tomorrow and the lack Of defiuiteuess and
! the cumbersome process necessary 10 re
deem il make il undesirable to the banks
under any consideration.
ENDED HIS AH0NN