CITIES THAT HELPED THEMSELVES
In the present year some cities have been led by necessity to help themselves. The bond market was poor. Business was uncertain, money tight and the ordinary investor reluctant. Bankers were loth to take new bond issues. Municipalities were unwilling to pay the high rates demanded of them. And many cities were prohibited by law or ordinance from paying more than 4 per cent. interest; while good municipal bonds were then selling on a 4 1/2 to 5 per cent. basis. But money had to be raised, and the attempt was made to borrow it direct from the lenders instead of from the banker-middleman. Among the cities which raised money in this way were Philadelphia, Baltimore, St. Paul, and Utica, New York.
Philadelphia, under Mayor Blankenburg’s inspiration, sold nearly $4,175,000 in about two days on a 4 per cent. basis and another “over-the-counter” sale has been made since. In Baltimore, with the assistance of the Sun, $4,766,000 were sold “over the counter” on a 4 1/2 per cent. basis. Utica’s two “popular sales” of 4 1/2 per cent. bonds were largely “over-subscribed.” And since then other cities large and small have had their “over-the-counter” bond sales. The experience of Utica, as stated by its Controller, Fred G. Reusswig, must prove of general interest:
“In June of the present year I advertised for sale two issues, one of $100,000, and the other of $19,000, bearing interest at 4 1/2 per cent. The latter issue was purchased at par by a local bidder and of the former we purchased $10,000 for our sinking funds. That left $90,000 unsold, for which there were no bidders, which was the first time that I had been unable to sell our bonds. About this time the ‘popular sales’ of Baltimore