The Bemidji daily pioneer. [volume] (Bemidji, Minn.) 1904-1971, 1915-04-16
Money to Be Secured by State Loan
Means Placing Of City on Cash
Working Basis.

nOAI 4uCSuny, Lue pulls UcluS open
from O'Clock in the morning till
9 o'clock in the evening. This date
was named by the city council at an
adjourned meeting held Friday eve
ming, March 10, when the report of
committee comprised of a member
of the Commercial club, member of
the Merchants association, a mem
Der of the city council and repre-
sentative citizens from each of the
wards of the city, recommended that
a bond issue be passed, following an
investigation.
Questions are Answered.
Following is presented a series OF
questions heard repeatedly and an
swers which have direct bearing ON
the passing of the bond issue of $780,
900:
What makes a bond issue necessary
at this time?
Anticipated revenues last year
from sources other than tax levy, fell
short $4,000 on account of the Fed
eral closing. Anticipated revenues
from this source for this year approxi-
mating $4,000 are also lost on &C
count of this closing. This combined
with outstanding warrants makes an
issue of this kind advisable.
What is the bond issue for?
For the purpose of picking up out
standing warrants.
Does this tend to increase our in
debtedness?
IT, No. For instance the city has
from $4,000 to- $50, 900 outstanding
warrants for Indebtedness that exists,
and these warrants draw per cent
interest. The arrangements for
state loan merely would provide the
cash to retire these warrants, and
such loan is made at per cent
You see it does not increase the in
debtedness, but reduces the interest
on such an amount from to 4 per
cent.
The City's Indebtedness.
What is the actual Indebtedness Of
the city?
At the beginning of the fiscal year
it was approximately $4,000. Now
this may seem high, but when you
consider that of this amount 100000
is for bonds for the water system,
and which is never considered as an
actual city Indebtedness, it being
strictly public utility, or a CONNER
cial enterprise and self-sustaining,
it is not so very high. This then
leaves approximately an Indebtedness
Of $4,000 for what is called the
city proper.
What offset has the city for this
Indebtedness?
It has every bit of the city prop
erty that can be given a physical
valuation, such as real estate, build
ings, equipment of all kinds, that is
owned by the city, and in addition to
this it represents every bit Of perman-
ent improvements made, such as
bridges, grading streets and roads,
street and alley crossings, walks, paw
ing, sewers, septic tank and so on.
Will the Indebtedness be greater at
the end Of this fiscal year?
It will be less, because there is a
bond issue of $4,000 due and payable
October first this year, which will be
paid and retired, money being avail
able in the sinking fund for that pur-
pose.
What rate of interest do these out
standing warrants draw?
Six per cent.
What rate of interest will the bonds
draw?
Four per cent
Are these warrants taken at par?
No. They are usually discounted
at to 10 per cent-at the present
time 1e per cent is the rate of dis
count.
Who Pays Discount?
Who stands this discount?
The individual to whom the war
rants are issued.
Are all the expenses of the city
paid by warrants on oYer-drawn
funds?
Yes, and have been for the past
1.-TWO or three years.
Who holds these warrants?
Banks, business houses. contractors
and private citizens.
What share of the 100000 is held
by the banks?
About $1,000; the balance is held
by the others.
Will the issuance Of the bonds be
apt to make the taxes more or less?
Continued on last pase.l