Year: 1870

To the President and Board Of Common


Council:


Your committee heretofore appointed and
Instructed by resolution to examine and re-
port as to whether any evidence of debt Of
an illegal character exist against the city
beg leave to report through their chairman
that they have had the matter under con-
sideration for some length of time and that
they have given the matter much attention
and consideration; that in the carefully con
sidered opinion of your committee, a large
proportion Of the bonded indebtedness of
the city Is founded upon illegal considera-
tions that the bonds were issued without
authority or warrant of law In this con-
nection the attention of your committee
has particularly directed to an investigation
of the authority which the city authorities
assumed and erercISed in issuing time in
terest bends to the amount of 81 100000 in
carrying out and cOnsumating what vas
then termed the funding scheme" and to
an investigation of the authority which was
also assumed ard exercised in issuing bonds
amounting to $800,0l2 ostensibly for paw
ing purposes.


The authority of the city to issue bonds
depended upon the vote of majority Of the
qualified voters of the city. No such au
thority, in legal contemplation was ever con-
ferred


Under the odicus and unconstitutional
franchise law large majority of the bona
fde citizens and property holders are ex
cluded from voting in these important cleo
tiOns-thus the parties in interest, the tax
payers, the parties who have the debt to
pay-it 1t is ever paid-were excluded from
the ballot box, the machinery which was to
control and give direction to millions of
their money. The question raised goes to
the root Of the evil, and deprives the bond
holder Of the protection and defense of in
nOcent purchasers. In the opinion of your
committee the innocent purchasers, if any
there be, are affected with notice as much so
as it the franchise law was incorporated in
the face of the bond.


a brief synopsis of the facts connected
with the history of these bonds may seem
| to illustrate the relation which they sus
| tain to the tax payer


| An ordinance providing for the funding
| of the city debt was submitted to the elect
under the franchise law Of the State on the
! 30th of April, 1867; eight hundred and
| twenty seven votes were pOlled in the First,
/ Third, Fifth and seventh Wards of the city
for bonds, no polls being opened in the
| other wards, 2ll votes were o He'd "no
| bonds, Majority "for bonds 6l6. This
/ on the vote to fund the city debit Under
the supposed authority conferred by this
mockery of law and Justice bonds were is
sued amounting TO Sl,000,000 The spec
ulators went into the market and bought up
the evidences of debt against the city at an
average of about 42 cents on the do lar.
This is the best approximate estimate your
con. mittee have been able TO make, and it
is believed verv nearly correct


With his S42, 900 the speeulator bought
100000 of the evidences the debt against





tanned from your city authorities interest
bearing bonds amouRtir G to Sl53,S46, the
bonds thus costing him fraction over p
cents on the dollar; the city donating L
him without authority or warrant of law, q
bonus Of $50, ,S46 IN the shape of interest