Newark evening star and Newark advertiser. [volume] (Newark, N.J.) 1909-1916, 1914-02-06
VUGENT DEFENDS
MARKET BONDS
Denies Any Secrecy in Sale of
Issue to Adams
& Co.
DISPOSED OR PRIVATELY
AFTER ADVERSE OPINION
City Counsel Declares Bonds
Come Under the Revenue
Producing Class.

At the continuation of the hearing on
the 100000 market bonds sale held at
the City Hall yesterday afternoon be-
fore Supreme Court Commissioner
Nicholas W. Bindseil. City Counsel
James r. Nugent made it plain that
there was nothing secret in the sale
to Adams & Co. Mr.. Nugent was a
willing witness and did all in his
power to have the matter placed be-
fore the public in proper light.
Mr.. Nugent testified that the bonds
would come under the revenue-pro-
ducing class. Following the refusal
<of Kean. Taylor & Co. to accept the
bonds, they were sold at a private
sale to Adams & Co. in a legal man
ner, said Mr.. Nugent, and for the
reason that 1t would have been a
handicap to the city not to have so
proceeded, as inaction would have
detrimentally affected the sale of
S4,000,000 other bonds scheduled for dis
posal. The private sale was resorted
to with the full knowledge of the ma
jority of the aldermen, including
some of the minority party members,
Mr.. Nugent declared.
1t was also testified by Mr.. Nugent
that Alderman Littlefield, leader of
the Republican minority, must have
: been mixed up when he stated the city
counsel had told him the bonds
Were mandatory, as this remark re-
ferred only to a school bond issue in
Guided. as Mr.. Nugent took 1t, in the
alderman's inquiry.
Tells of Bond Sale
On direct examination by Assistant
City Attorney Charles NJ. Myers, Mr..
Nugent testified that the sale of the
bonds took place in the regular order
and that the first trouble came up
when the validity of the issue was
questioned by Hawkins, Delafield &
Longfellow, of New York, on the
ttrength of which Kean, Taylor &
Co, New York. withdrew their bid.
Mr.. Nugent then told how he had
vainly sought to have the Sinking
Fund Commission take the bonds, but
that he was finally informed by John
r. Hardin. one of the members, that
in view of the opinion of the New
York law firm the Sinking Fund Com
mission could not take the bonds.
The examination then continued:
@. What did you then do or advise
TO be done? Al then met with Sen
ator Smith, the president of the Fed
eral Trust Company.
Q. Is the Federal Trust Company
one of the bidders? A. One of the bid
ders.
Q. What did their bid offer? A.
They bid 1927.
@. And for what purpose did you
see Senator Smith? A. To see whether
the Federal Trust Company would
take the bonds.
@. He is president of the Federal
Trust Company? A. Yes, and the
dominant factor in it.
@. What did Mr.. Smith say? A. Mr..
Smith said that in view of the opin-
ion and the fact that it being known
in financial circles that the bonds had
been turned down that he could not
take them representing the Federal
Trust Company because they could
not redispose of the bonds with the
cloud that was placed around them by
this legal opinion.
Q. You went to the president of the
Federal Trust Company for the pur-
pose Of A. OF inducing him to
take up the bonds. He had on great
many occasions during the past four
Or five years taken Newark city bonds
4 and bid upon them and taken them
tand marketed them.
@. After the refusal of the presi-
dent of the Federal Trust Company
to take these bonds, then what did
you do? A. Then came the informa-
ton from Mr. Parmly to the effect
that Messrs Adams and Company, Of
New York and Boston, would take
the issue at par and a quarter.
@. Did he say whether or not he
had taken any steps to dispose of the
bonds to them? A. He asked me
. what / thought of it and I said that
in my opinion it was very good
= proposition and 1 advised him to take
the offer
Advice Based Experience.
Q. Was your advice based some
what on your experience in the sale
of Newark bonds, as to time? A.
During the past eight years since I
have been city council l have been
associated in all of the sales of the
bonds by the city, both temporary
and permanent.
Q. What has been your experience
as to the best time for selling Newark
bonds? A. We have invariably sold
Newark bonds in January and i'll
July, following the half yearly inter-
est payments of the banks and cor
porations
@. Did you have any talk or dis
cussion with any New York banks as
to the best time to sell bonds of the
City of Newark during this last year?
A. ] have during the past year talked
with a great many of them and with
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