Omaha daily bee., 1914-02-20
LAWS HINDER SALE OF BONDS
Butler Cites Reasons for Depreeia-
tion Of City Debentures.
DO NOT LIKE THE FISCAL POINT
BROKERS who Have Heretofore
Handled Omaha's Securities Pre-
fer New York 60 Lincoln
iTendqaa rters,

That Omaha bonds, block al $4,000 Of
which failed o. ISSUE because no par bids
we're received. are deprecated because
OF state laws and local practices, was
the contention OF Dan -. Butler, city COM
missioner OF finances and accounts. In Il
communication to the city commission at
an adjourned session.
After hearing Buffers communication
the council took a recess until the after
noon. when bond buyers representatives
conferred with the commission.
Commits sioner Buffers communication
set forth the following reasons for the
apparent doubt OF Omaha's credits
First. Fiscal agency having been trans
ferred from New York TO Lincoln, Neb..
at last session OF the legislature.
Bond houses which have heretofore bid
and purchased our loans lat a premiuml
nov state that the fact OF he pSincipal
and interest being payable at place
which would entail n loss OF three days
interest and exchange. makes II hard for
them 20 find a ready market
No fund in existence for the redemption
OF the principal OF general bonds.
non-registrable
An analysis Of our bonded debt discloses
posed Of renewals
As 20 making our bonds In smaller de-
nominations and offering at popular sub
soription, the following objections could
First-Bonds are not tax exempt in our
state.
Second Undersubscriptlon might result
In leaving broken lot on hand and
which might not be readily disposed OF.
Again, II proceeds were needed at a
stated time, no assurance could be had
that the sale would be completed
Further, an opinion as TO the legality OF
has ~ he G.a.s .1al.. a -
the. city at a cost OF from $500 70 81, i,oO0
and if payable from the proceeds OF the
bonds, might raise the question oi
whether the bonds were not sold at less
As TO our street Improvement bonds
The faith and credit OF the entire cts
not being pledged and 40 reclted in the
coupled with the facts OF their beinf
redeemed through taxation on abuttinl
property. which tex being subject to iiti
cation and possibly being declared void
interest payable annually and prlnclpa
payable serially zone 10 nine years). mak'
this class OF bonds hard TO dispose Of
hence. our plan for Offering same viii
the ''all or none" clause
SuEEests Remedies.
Commissioner Butler suggested the fol
lowing remedy:
First-Make New York the flsca
agency, Bonds and coupons would thei
| become New York exchange to bank
outside OF New York.
sscond-creats a bond redemption fun,
aud levy annually SlO0.O00 In years wheI
| no bonds mature this fund could be In
vested ln our own warrants. thereb,
saving Interest and increasing, by sucl
| Interest the bond redemption fund
Third-Make our bonds tax eNemp
when held in this state. Make depositor.
hanks depoalt city bonds as security 70
deposits, In lieu of personal or indemnit'
/ honeH.
| Fourth Make our bonds registrable a
70 principal and interest at option 0
! holder.
Fffth--change plan OF assessment, $
| that the result VIII show fair cas-
value instead OF one-fifth, thereby makin
our bonds legal Investments for saving
| and postal banks. In all eastern citlei
| from which they are now barred, solel
through present plan.
Commissioner Buffers communicable
was referred TO the committee of tn
whole meeting Monday. when the counc
viii discuss Il IN detail.