The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1908-12-01
BAN Ks L0BB|EO
FOR FAvORs IS
CHARGED
LIVELY RuMPus IN SINKING
FUND COMMISSION MEETING
OVER ACCEPTANCE OF PERSON.
Al BONDS FROM oEPoslToRiEs.

Al BONDS FROM OEPOSiTOHieS
Charges OF lobbying and being IN
true to the city's interest were freely
fred back and forth In the meeting o:
the sinking fund commission In the
Mayors office, Tuesday morning. IL
was the liveliest meeting the commits
sion has had In recent years and the
feeling engendered was such that the
matter In hand-the acceptance or re-
lection of bonds offered by the Old De
troit National and American Exchange
banks as surety for the city deposits
was postponed a week. -.
Some time ago, after the banks had
refused, with one exception. to pay q
higher rate Of interest than per cent
| on city balances. the sinking fund
ommission voted to allow the banks
to give personal surety bonds. signed
by all their directors, instead OF surety
company bonds II, in exchange. the
banks would raise the rate Of interest
The two banks In question sent In
personal surety bonds but did not
comply with the provision In regard
to raising the interest rate.
Controller Doremus offered the
bonds. recommending that they be &C
copied. Mayor Thompson and Aid
Tossy, Heating and Shapland stood
with him. City Treasurer Koch and
Aid. Heineman opposed this. Aid
Brozo and Korte rather siding with
them.
"Why should we allow the banks 10
save the premiums on the bonds and
not get anything in return" inquired
Heineman.
These are better bonds" said Con.
troller Doremus.
81 am glad that have not been hon
ored by the lobbying that has been
done to influence other aldermen" de-
clared Heineman a minute later.
"You have done plenty OF lobbying
yourself" retorted Aid. Tossy.
Eyes, / have" said Heineman, but
for the city's interest, not for private
interests. have said three times
that there has been lobbying done III
behalf OF this. say It again and can
prove It,"
1T know lots about you and your
record" asserted Tossy.
go ahead with 1t, then"
"Well. won't say 1t now guess
! I've said too much"
Mayor Thompson and Aid. Keatin
declared that they believed the per
sonal bonds to be the better business
proposition. City Treasurer Koch pre-
tested.
I'VE gave you six months to get
better rate of interest" said the mayor
Eyes, and | would have succeeded
II | had had the honest cooperation
of every public Official concerned" re-
torted Koch" The reason the banks
want to change from the surety bonds
to the personal ones signed by their
directors Is that 1t will save them
$4,000 per year each. We have been
fair to them and offered to allow them
to make the change II they would
allow the city half the profit by rails
ing the interest rate. II you are act
ing in the city's interest. you will not
accept these bonds without some con-
cession in return"
There Is a combination among the
banks. We can't get any higher In
terest rate" said Aid. Tossy.
You can't get anything by toadying
to them" replied Koch. I'VE are no
worse OF in any event II we let the
bonds remain as they are. and we
may get something for the city. II
you let these two banks change their
bonds, all the other city repositories
will do the same
III the personal bonds they offer ara
~
said Aid Shapland.
mo you cant" interrupted Heine-
man. "You would not put stigma on
la bank as being weak And the
weaker the bond, the more lobbying
there would be for it. The bond you
have has the names Of men who are
worth millions today. They may not
be worth anything tomorrow"
AT least one alderman at this table
has been approached" declared the
city treasurer. but an interruption
stopped him.
Aid. Heineman made q motion Ia
abide by the former action Of the
board allowing no change in bonds
without q change In interest rate, but
II was not put to a vote, the senti
ment being plainly five to four
against Il.
Finally Koch produced the city
charter to show that the common
council and not the sinking fund com.
mission must settle the matter finally
This put check on the proceedings
and the whole matter was put over TO-
a week.
Mayor Thompson took occasion to
say that he had always favored per.
sonal surety bonds. Controller Dore-
mus declared he would accept the per.
sonal bonds even II there were a less
rate OF interest as he regarded them
as being surest
The change from personal 70 surety
company bonds was made in 1903 fol.
lowing the City Savings bank crash,
when the city funds were badly in.
volved.
MI AnnYyy~