Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1910-07-28
NET INTEREST RATES.

new feature Of the report Is a table
showing the net or actual rates of in
terest that cities had to pay for the
use OF money on their funded debt or
long term bonds Issued during the fiscal
year 1905 These rates have been COM
puted from bond tables in method
familiar 10 all bankers. consideration
being taken Of the premiums or dis
counts received or paid by the cities
ana OF the length Of time that the
bonds have 10 run. During the year l27
% the 1858 cities ~ over 30 900 population
sold to the public Sis7 .0S3. 2S6 bonds, on
which they received S5,S25.65l i'm pre-
miums and paid s4s4,456 I'm discounts.
only II cities are reported as having
sold bonds at n discount. most of these
being In the Southern states The net
rates as determined from the bond ta-
bcs, differ materially for many cities
from the average rates borne by the
total amount Of funded debt outstand-
ing AT the close OF tho year for those
cities. Thus the average rate borne
by the outstanding bonds ~ Seattle Is
IS per cent, but during the year 1908
that city sold TO the public 81 600 900
bonds to run for % years at net rate
Of 3.S7 per cent The average rate
borne by the outstanding bonds Of the
citv ~ New York Is &c per cent. hut
during the wear New York CITY sold To
II will pay until maturity net rate
of 70 per cent.
CREDIT RATING OF THE CITIES
As indicated by the net Interest rate
column, the cities Of over 300 900 popula-
ton with the best credit rating were;
Detroit 3 81 per cent: Boston, 3 81 per
cent; and Philadelphia, $40 per cent.
The cities Of from 100000 10 900, 900.
with high credit rating We're: Indian
apolis, 3.49 per cent. Cambridge $3.50
per cent; Worcester, 3. 50 per cent. ana
Fail River, $40 per cent. cities of less
than 100000 population with a high
credit rating we're: SOmerville. 2 80 per
cent; Lawrence, 3.6i per cent. Taunton,
3. So per cent, Salem. 3.67 per cent Hol-
yoke, 3.72 per cent. Binghamton, 81.
per cent; and Brockton and Newton.
each 3.73 per cent
cities Of over 100000 with the high
est average net rates were; san Fran
cisco. 40 per cont: and New York city.
419 per cent. cities Of from 100000 TO
800 COO population with the highest net
rates were: Los Angeles, 40 per cent
Memphis, 434 per cent and Jersey
city and omaha, 4.2T per cent. Cities
Of under 100. 900 population which had
to pay the highest rates for the use
OF money were LITTLE Rock, $50 per
cent: Knoxville 50i per cent; Mobile
and Springfield Ill, 5 per cent; BAY
City. 4a6 per cent; and Wichita, Al
per cent,
WHY CREDIT TERMS DIFFER.
IL Is seen that Detroit. indianapolis.
and most Of the Massachusetts, cities
can borrow money on extremely faV-
orable terms. while most OF the south
ern cities. New York city, and others
have 10 pay materially higher rates.
The length OF time that bonds have to
run has some effect upon the rates OF
interest that cities have To pay for the
use Of money.
Among other factors that determine
thnt rate may be mentioned a small net
debt. Detroit had the smallest per
capita net debt Of any city OF over 300
900 inhabitants. and Indiana rolis had
the smallest Of cities Of from 100000 to
300 200 population Each Of these cities |
sold their bonds on the most favor
al bic terms Of any cities OF their re-
spectivc groups.
Tho table also shows the net rate Of !
interest Tint cities pay upon their long |
term bonds sold To- thcir sinking and |
other city funds New York city sold |
20 its funds during the year more than |
az 600 0O0 bonds on which q will pay |
p net interest rate Of 3.0i per cent un- |
tii maturity. this rate comparing with |
a not rate ~ 40 per cent paid 20 the |
public Bnlti mora also borrowed from /
IT'S funds at not interest rate Of ass /
per cent cornnarod with a rate NJ 39i /
no. cont naif to tho public. The net 4
rates nah cltv FUNDS in the cities ~ 4
ohio and Massachusetts, we're consider
ably higher than those paid to the pub
lic.
Tho cities With the largest nor capita /
',qvulent~ - Interest IN oitv debt are,
DOsfnD &c a.. New York CITY Sc "a
rrohlo ss2i montgomery, Se7: and
Cincinnati. So