The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1909-01-22
FAULTY BOND ACT
CAUSES BIG Loss
State Treasurer Says Uncer-
tainty as to Redemption Re-
duced Amount of Premiums
investors Balk at Short Time
Loans and Fear of Money
Being Unproductive
[Speeial Dispoleh 70 ne cam

lOpecidi Dfspdtch TO he Cdll
CALL HEADQUARTERS CHAMBER
OF COMMERCE BUILDING, SACRA-
MENTO. Jan 21.-That the people of
California generally and the harbor of
San Francisco particularly have suf-
fered heavy financial losses as the re-
suit OF a faulty provision in the San
Francisco seawall bond act and that
further injury will be inflicted upon
San Francisco and other harbors of the
state If the pending harbor improve
ment bond bills are not amended are
thescontentions Of State Treasurer Will
Hams, who speaks out of the depths
of his experience in the marketing of
half of the 100000 seawaI bond
issue
Thanks to the fact that there is no
fixed time for the maturity of the sea-
wall bonds, their sale, says Williams.
has been difficult. in numerous in
stances impossible and in every in
stance effected at a loss. reduced to
cold figures, of $1,000 in premiums on
the 100000 sale completed January 6.
REDEMPTION DAY UNCERTAIN
The seawall bond act was passed in
1903, ratified in 1904. and the bonds
issued in 1905 According to the terms
or the act the bonds were due in 1924
provided. however. that they were sub
Ject to redemption by lot after 1914.
The method of allotment was not es-
tablished. the bonds were not serial.
NO one knew when his bonds would
mature and the bond dealers. forced
to fix the date of maturity at 1871
when any bond might fall under the
redemption by lot clause, SHE'D at
premiums that should have been de-
manded by bonds which might run 20
years.
The state has sold In three lots bonds
aggregating $3.50, 600. If no more are
sold, 100000 worth will be redeemed
by lot on January 2. 1915. and the re-
mainder may run on for any part of the
nine years intervening between then
and 1924
The uncertainty OF maturity and the
method of giving notice of redemption
mas resulted in cutting off the sale OF
these ponds TO dealers outside of Cali
Iornla and closed the door to eastern
funds.
NOTICE NOT SUFFICIENT
The act provides that notice of re-
demption shall be given by advertise
ment In certain papers and in no other
way. If the holder of a bond which
matured and fell by lot into the re-
demption list in January, 1915. did NOT
happen to see one OF the few adver-
.lsements, he would have no means of
knowing that his investment was not
productive until the following Julv.
when he presented his coupon for in.
terest and learned that his principal
had been awaiting his order for six
months.
This element of uncertainty caused
several big bond dealers to refuse TO
bid on the 100000 lot marketed Jan
uary and resulted in shrinking a
premium which should have exceeded
$4,000 to an even $1,000.
TO prevent this loss of premium and
10 insure the ready sale of the bonds
to eastern dealers and eastern states
which have special funds to invest in
long time bonds. Treasurer Williams
would make the pending bond issue acts
provide for serial bonds, and the eIimi-
nation OF the embarrassing element of
uncertainty.