The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-04-17

cash reserve. We informed the in
vestors of this feature of the trust
company law and advised them that if.
at any time. they desired to use ready
cash and did not care to sell their
bonds, they could come in and we
would loan them money on their
bonds. taking them as collateral to
the note.
People Discovered It.
The rate of taxation in the city of
Topeka is SLIT per hundred, and our
assessments are made on the actual
value of all personal property. The
people of the city soon discovered
that, while the banks were paying
three per cent on time certificates of
deposit, payable in six months, or one
year after date OF issue, if they COM
piled with the law and paid SLIT tax
per hundred, at the end of the year
they were only receiving net S1-23 on
each one hundred dollars placed in a
time certificate. while, if they bought
municipal four and One-half nom
taxable bond, which could be con-
verted into cash virtually on demand,
that they not only reaped a decided
advantage from the income stand
point, but at the same time they
avoided any penalty attached by the
tax law which makes it a very serf-
Gus offense to return false state
ments regarding property to the tax
assessor.
A Walking Advertisement.
Another issue of bonds followed.
and forthwith the subscription list
was over-subscribed two or three
times Every person who had bought
the first issue of bonds became a
walking advertisement. A great in
tereSt at once developed in the finap
cial affairs of the city. About this
time Topeka adopted the commission
form of city government, and a very
Intelligent commissioner of finance,
Mr.. Bone, was elected. He devoted
much of his time and attention to the
formulation of statements which were
clear and concise, setting out briefly
the condition of the city, and fur
nished in detail budgets for his de-
partments, periodically to the public.
He firmly established the system of
refunding the higher interest bonds,
and Iocalizing the new issues on a
four and one-half per cent basis. The
Prudential Trust company gave him
it's assistance and financial support.
Habit of Saving.
At no time since the first expert
ment has there been any lack of sub
scribers. and it is also an interesting
fact to note that very few of buyers
have offered their bonds back to the
trust company to be cashed. AS a rule
the investors rent a safety box, in
which they place their bonds and 9TH
er papers of value to them. They re-
quire the habit of having more de-
terminedly than ever and are fired
with a desire to purchase other $500
bonds as soon as they can assemble
the required amount.
In June of 1914, the city of Topeka
offered $4,000 of general improve
ment bonds to the public at four and
one-half per cent and accrued inter-
est Announcement was made that
$4,000 would be distributed in June;
$4,000 in July, a like amount IL
August and the balance in September.
These bonds were delivered to the
-,
and the June deliveries were made
during the first fifteen days of June.
The trust company would figure up
the amount of accrued interest on
each sale up to the day of sale and
place this to the credit of the city
treasurer, making a report to him
daily. In July the same process was
observed and in September the last
bond was delivered to the subscriber
who had been waiting for it.
City Profits by 1t.
1t was then found that the city had
gained something like $500 in ac-
crued interest. The bonds had been
sold only as needed to meet the esti-
mates OF contractors for work on inn
provements. The city, in other words.
was making the four and one-half
per cent, instead of, under the old
such a matter, on the daily balances
deposited in the banks from a bulk
sale. There was a clean business
profit to the city, resulting in great
satisfaction to everybody concerned.
Another issue of seventy-Odd thou
sand dollars during the summer was
handled in the same way. final de-
liveries TO be made late in the year
This distribution will also result in
additional profit to the city. The de-
mand was exceedingly strong. even in
the high money markets when first
class commercial paper comma nded
seven to eight per cent Be it re-