The daily morning oasis. [volume] (Nogales, Ariz.) 1917-1920, 1919-11-22
|C|TY SINKING
FUND and THE
METHOD THAT
MIGHT BEUSED
President w. F. OvertOn of
NOgales Building & Loan
Association Describes a
Proposition Offered the
City.
(Communicated)

Editor, "The Oasis:"
In the Daily Oasis of Wednesday,
the 10Th inst, there appeared an ar
ticle captioned "a Financial Propo-
sition" wherein it is stated that 1,
as president of the Nogales Building
and Loan Association, proposed to the
City Council last Monday evening
that the city invest the sinking fund
money of the contemplated bond is
sue with the Building and Loan AS
ISOLATION where the money would re-
ceive guaranteed interest rate of 10
per cent per annum. The statement
is largely erroneous. l was not pres
ent at the Council meeting last Mon
day night nor did 1 send the Council
any communication About a month
ago 1 appeared before the Council in
connection with the investment of the
present sinking fund money, and uf1-
doubtedly it would be of considerable
interest to the tax payers of Nogales
for "The Oasis" to kindly correct the
wrong impression conveyed in the
published article by permitting me to
explain through your paper the pro-
position, or propositions, that were
submitted to the Council at that time.
Nothing whatever was said to the
Council relative to the present pro
posed bond issue, or it's tentative
sinking fund money. That expected
bond issue is not an actuality and
hope it will not be. Am opposed to it
and shall try to discourage it's ap-
proval unless it is trimmed down to
within reasonable figures and speci-
fications. I view it as a proposition
of extravaganza at this time to un-
dertake to borrow $370,000. Besides,
it seems to carry some suspicious of
profiteering character, and alto
gether l should be very far from en-
deavoring to connect it up in any
manner with the Building and Loan
Association. The city is already
carrying a bonded Indebtedness of
$4,000, and it is the handling of the
sinking fund money for the redemp-
ton of these bonds that I brought to
the attention of the Council, and
pointed out an opportunity to save up
wards of $4,000 to the taxpayers
over the present method of investing
the money. These bonds are due and
payable twenty-five years hence. The
city has already $21 900 in the sink
ing fund and is adding to it $1,000
annually. The money is deposited in
the First National Bank where it re-
ceives interest at the rate of a per
cent per annum, and, incidentally, the
bank is lending money to the city at
the rate of 8 per cent per annum.
A continuance of the manner in which
this redemption money is handled will
REQUIRE the accumulation of about
$4,000 which, with the interest, will
amount to $4,000 the latter part of
the year 1941, the time when the
bonds fall due. Considering the fact
that there are more applications to
the Building and Loan Association
for money with which to build homes
than can be accommodated, I saw nc
good reason why the city could not
help out the situation and materially
benefit itself in several ways by de.
posting it's sinking fund money with
the Association instead Of with the
bank. In view of this l formulated
number of propositions and sub
mitted them to the Council in orde1
to give the Aldermen an understand
able idea of what the sinking funC
money is capable of accomplishing
The nature of the propositions cal
be illustrated in the following man
ner and show something of the bene
fits that would accrue to the com
munity through the acceptance O.