The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1913-12-08
Oversight May Entitle Hold
ers of Issue to Speci-
fled Interest.
ZIMMERMAN WARNED
INTEREST WOULD STOP
Mayor Insists on Step Despite
Warming of Bank Presi-
dent.

The calling in OF certain street i'm
| provement bonds bearing per cent
| interest, $4,000 of which were puC-
| chased by the municipal night plant
and the city sinking funds, was never
advertised. City Controlle ~ McMahan
stated today. If this fact makes the
| calling in of the bonds Illegal, as y
generally believed, they VIII continue
to bear the specified rate ot interest.
If advertising the call was not re-
quired by statute all bonds called are
null and void, so far as their interest
bearing feature is concerned. and The
city sinking funds, various individuals
and organizations are the possessOrS
of collections Of most Improbable pa
per, non-interest bearing since last Jul
ly.
individuals and organizations stlll
solding these called bonds, the semi.
annual interest coupons On which are
now maturing. can turn them in to the
specified banks and receive the princi-
pal and one months interest, but The
interest for the other five months is
being refused and will not be paid ouF
unless it is ascertained positively that
the calling in of the bonds was illegal
Gets No Interest.
Monies of the two sinking funds arc
in the banks for the purpose of taking
over the called bonds still outstanding
but these monies at the present time
are being used only to pay the face
value of the bonds and one month s
interest
This was learned Saturday when AL
fred Bavis, who is to be president of
the board of public works, called az
the First National bank With several
called street improvement bonds,
which he held as trustee eor the HO-
kendauqua Tribe of Red Men. The full
six months interest on these bonds was
refused and Mr., Bayis declined to turn
them in for their face value and one
months interest.
He says he is going TO make a thor
oush inyeStigation Of the whale trans
action and cofnplimented The PaiIa-
dium for bringing to light the peculiar
situation. the responsibility for which
is traced directly to Mayor Zimner-
man.
The mayor refused to permit the
floating of a new bond Issue to take
over and retire the street improve
ment bonds which were called, and re-
quired the purchase of these bonds
With the MONIES OF tne Two SINKING
funds. He insisted on this action in
face Of the fact that A. d. Gayle, pres
ident of the First National bank, had
informed city officials that If the sink
ing funds were used to purchase the
bonds they would derive no interest
from them because interest on the
bonds would cease after the first in
terest paying date following the filing
of notice OF calling in the bonds with
the banks and interested contractors.
Zimmerman Obdurate.
Formerly the monies Of the two city
sinking funds were deposited in local
banks drawing per cent interest, and
Mayor Zimmerman could not be con
vinced otherwise than that it was bet
ter to invest these funds in per c2nt
bonds, refusing to need informa ton
that these bonds were to cease paying
any interest because they had been
called
Mr.. Gayle is of the opinion that the
action of city in investing the monies
of the two sinking funds So that they
derive no interest in itself constitutes
an rregularity.
Failure to advertise the calling in of
/ the bonds has been an injustice to
many parties holding suca bonds as
did not mature last July, the Hoken-
dauqua tribe as an instance, for they
had no information that the bonds
were called and were holding them TN
til date of maturity, only to learn now
that they have not been drawing inter
est for five months. The banks and
contractors did not know who held
many of the called bonds, consequent
ly had no way of informing such par
ties OF the city's action.