The Snohomish Bond Scheme: How Outsiders Tried to Rig City Finances

Several weeks ago, the city council advertised that it would sell $18,400 worth of bonds issued for the purpose of funding the indebtedness of the city. In response to the advertisement, a number of Eastern and California financial companies sent their representatives here on the day the bonds were to have been sold. These representatives put in bids, but when the bids were opened, it was found that they were all ridiculously low—so low, in fact, that Mayor Ferguson 'smelt a mouse' and advised the council to reject all the bids. This suggestion was promptly acted upon by the council, and the bonds were not sold. Since that time, it has leaked out that there was a 'little combine' between all the bidders save one, and that it was the understanding that all the 'rake-off' in the way of commissions, premiums, etc., was to be easily divided between the gentlemen who had 'untold millions' at their backs. Unfortunately for themselves, their designs were frustrated by greed. It is also asserted by a director of one of the banks here that an attempt was made to do pretty nearly the same thing by these same representatives when the county bonds were sold a few weeks ago. That scheme failed owing to the quarrel which arose among the representatives over a division of the spoils. Today, however, Mayor Ferguson called a special meeting of the city council, and in less than an hour the funding bonds had been sold to Seymour, Barto & Co., of Tacoma, who had not put in a bid before. The bonds bear 6 per cent interest and brought 95 per cent of their face value.