Omaha daily bee., 1912-05-07

Kountze Brothers represented a syndi-
cate that offered a premium of ssS,eoo
for the bonds brought a rival syndicate
offer Of $3.50 supported by certified
check for y75.ooo The sale is said -
have been made at a premium Of $3.50,
exactly $50 more than was offered by the
syndicate that was denied an opportunity
to bid on the issue.
Matter of Premium.
The bonds draw ~ per cent interest
and run for thirty years Last week the
city of Omaha sold an issue Of $4,000
twenty-year. ~ renewal bonds at loooles.
On this basis, conceded low, a thirty
year ~ per cent bond should bring
loo.o2os II the water bond issue had
sold on open bidding. and the bidders had
been as eager to get the bonds as they
we're to get the renewal bonds. the issue
would have commanded premium Of
sl46.50o. or $3.50 more than accepted.
That Omaha bonds are in demand is
shown by the fact that the renewal
bonds sold in Omaha on Monday at
l0ool66 sold in Boston Friday at l00o2sS.
The premium paid on the water, bond
issue makes the price shade over iooeo'5
Secrecy 10 the Limit.
Pursuing its policy OF secrecy to the
utmost. the Water board held back the
information in order to give II out in
privacy to the newspaper competitors Of
The Bee. so that this paper might not
have the information until the others had
published the fact.
Late in the afternoon Mr.. Howell
brought to The Bee office a copy Of the
minutes Of the days proceedings Of the
Water board. At meeting held during
the morning hours a communication from
John L. Webster was read, which In
formed the board that under the law II
was not required to sell the bonds openly.
1t had. according to Mr.. Websters opln-
ion, sole authority to sell the bonds, and
might do so in any way II saw fit. Messrs.
Heafey, o'Brien and Howell, the special
committee TO whom had been referred the
bid Of the syndicate composed Of n. w.
Halsey & Co., z. H. Rollins & Sons, N. B.
Leach & Co, Merrill. Oldham & Co. and
watson q Prsssprich, reported adversely
on the bid. II was set out that the bid
was Irregular and eoptsined defects that
would invaiidate II, 30 the proffer was
rejected and the $500 check which ac-
companled the bid was ordered returned.
A lengthy preamble vas presented by
Mr.. Howell. which set out that for some
reason the attorney general OF New
York had declared that the bond issues
OF Omaha were not proper securities In
which savings banks Of New York could
invest: suggesting that this opinion was
given at the instance Of the Omaha
Water company, and that the suit OF G.
w. Shields to enjoin the Issuance OF the
bonds was part Of the same effort to
prevent the sale Of the bonds.i that u.
II. Rollins & Sons had advised the issu-
ance OF per cent bonds instead Of 4 or
"a per cents; that kountze Bros. OF
New York were willing to take the issue
at par and accrued interest 'lus a pre-
MUM" and that Judge Dillon and Mfr.
WEBSTER had advised the sale Of the
bonds before the change Of city officers
took place; and resolving that IL believes
It 10 be its duty to receive and accept
what II considers to be the bona fide and
unconditional offer OF Kountze Bros. to
purchase the Omaha water bonds at par
with accrued interest, plus premium,
and that 1t would be unwise and unbusi-
nesslIke at this time to accept the bid Of
L. w. Halsey Co. and others, under
all the circumstances hereinbefore stated.
and" resolving further to sell the bonds
to Kountze Bros.
Gs.s7h.
All Preparations Made.
That the transaction was concluded
with the utmost secrecy and before yes
terday is shown by the fact that on Tues
day OF last week City Treasurer Ure
was in absolute ignorance as to what was
going on he so stated on that day, but
on yesterday he was in New York with
the bonds and delivered them to kountze
Bros, receiving the cash in exchange for
them. This cash was transferred to
Omaha by telegraph. Shortly after 4
O'Clock yesterday afternoon the Omaha
National and the Merchants National
bank notified the treasurer's office that
81 SOC 900 had been placed to the credit
Of the city in each hank. No other bank
had reported. but II Is the opinion at
the treasurers office that the First Ma
tionaI and the United States National will
make report this morning that the bal
anee OF the $4,000 has been deposited
with them.
Il may be of interest here to note that