The Bankers’ Bailout for City Debt
Seattle’s financial elite push for state intervention to retroactively legalize city debt incurred in excess of the constitutional limit.
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.
Messrs. Jacob Furth, Angus Mackintosh, and Abraham Barker, representing the Clearing House Association, appeared before the city council to argue for the passage of a bill to legalize city indebtedness incurred in excess of the 1.5 percent constitutional limit. The council agreed to form a committee to confer with the bankers. Judge Jacobs and Judge Stratton addressed the aldermen, emphasizing that prudent investors would not buy city bonds if their legality remained in doubt. The proposed legislation, which would be sent to the state legislature, would allow the city to hold a special election to validate these outstanding warrants and debts, provided they were originally incurred in good faith.
“It goes without saying that bonds cannot be floated if there is any doubt at all as to their legality.”
This 1891 struggle over 'validating' debt incurred above constitutional caps echoes modern-day Seattle debates regarding debt ceilings, infrastructure funding, and the heavy influence of the local banking sector on municipal governance and financial policy.
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