City Leaders Accused of Financial Mismanagement
A critical report on how city funds are being held in 'favored banks' while the city pays interest on its own debt.
The story, cleaned up
A cleaned-up reading of the newspaper page: spelling and layout repaired, one story lifted off a crowded page. It follows the original closely but it is not a transcription. The original page is below; read it if a detail matters.
The management—or, rather, the lack of management—of the financial affairs of the city since the money secured by the sale of the bonds was available has excited much comment. On May 7, more than three weeks ago, the net amount of $724,180.29 was placed to the credit of the city, and it has since paid interest on that sum at the rate of 5 per cent per year, amounting to a little more than $3,000 per month. The interest on this money since it was received has amounted to considerably more than $2,000. Yet the entire sum has been lying idle. Furthermore, it is proposed to have outstanding warrants against the general expense fund remain unpaid, to deposit the entire amount derived from the sale of the bonds in the four favored banks, which subscribed $1,000 each to the Democratic fund in the recent municipal campaign, and to pay general expenses in cash out of this fund. It is as if a business man who was paying interest at the rate of 10 per cent on $80,000 were to leave $240,000 on deposit in his bank to meet current expenses, trusting to his future income to wipe out the debt. It would be a fine thing for the bank, but it would be ruinous for the business man.
“It is as if a business man who was paying interest at the rate of ten per cent on eighty thousand dollars were to leave two hundred and forty thousand dollars on deposit in his bank to meet current expenses... It would be a fine thing for the bank, but it would be ruinous for the business man.”
Public skepticism regarding the interplay between city municipal bonds, political campaign contributors, and banking institutions remains a core issue in Seattle’s local politics over 130 years later.
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