CITY NOTES PROVE PROFITABLE
Written Specially for “Fire and Water Engineering.”
A feature showing the special availability of the city notes, or short-term bonds for municpalities desiring to raise funds immediately for necessary public improvements, such as fire department equipment and water works improvements, is that the one hundred and twenty-four local banks and trust companies, which subscribed to the $100,000,000 New York City 6 per cent, one, two and three year note issues last Septembr to pay off the city’s foreign obligations, reap a profit of 2 per cent, on their subscriptions. The syndicate managers who have sent checks representing these profits to the participants through the managers themselves, in accordance with their voluntary offer to the city, derive no pecuniary benefit from the operation. Another feature of interest to municipalities is that in addition to the profit to the subscribers the City of New York will receive a sum estimated at between $400,000 and $300,000, which represents the net profits accruing from the sale of the notes in excess of the 2 per cent, paid to the syndicate. This was made possible by the advantageous purchase of foreign exchange by the syndicate managers in the period in which payments of maturities were effected abroad. At Riverhead, Long Island, N. Y., the sale of $100,000 bonds for the municipal water plant has been effected, declared legal and paid for. These bonds mature in twenty years, and interest at 5 per cent, is to be paid on $75,000 and 4 7/8 per cent, on $25,000. In N. w Richmond, Wis., $12,000 bonds for water works system have been sold. An appropriation of $45,000 has been made at Reading, Pa., for preliminary work on the proposed reservoir. Sebree, Ky., recently ordered the sale of $14,000 bonds for the installation of a water works system and on January 15 the people of Oklahoma City, Okla., are to vote on a $240,000 bond proposition for storage reservoirs and a pumping station, while at Mount Morris, N. Y., the people recently voted in favor of a proposition to issue $85,000 bonds for water improvement purposes. A special election will probably be held at Huntington Beach, Cal., to vote on a bond proposition to secure adequate fire protection and at a fire district meeting at Middleboro, Mass., the purchase of motor apparatus to cost about $5,500 was authorized. The erection of a new fire station to cost $55,000 is under consideration at Toledo, O. Appropriations for fire department improvements are reported from Pascoag, R. I., Haddon Heights, N. J., and Bovina Center, N. Y. These instances, gleaned trom the current news, are evidence that there is activity in needed public improvements in various sections of the country. Reports from Chicago state that an easy tone pervades the money market there. In an interview, Charles R. Flint, shipbuilder and owner, said: “The wheels that grind American prosperity are turning. Already they are well under way. They are going more rapidly every day. Our credit system, fast approaching stability, daily is giving the wheels of industry added impetus. I think prosperity is beginning to manifest itself everywhere in the United States. Exports of munitions and provisions of war to the belligerent powers have become enormous in the last two months. It was those exports which first set the wheels of American industry in motion. Once started, our industry has taken care of itself. Of almost equal importance with our exports to the belligerents are our exports to those neutral countries which formerly counted on the now fighting countries for imports. Our success in those fields has been very satisfactory. There is only one great brake to our trade expansion. I hat is the present situation in world credits. Because foreign merchants cannot get much credit in this country, their orders are not as large as they would like to make them. However, our money market now is easier, and our credit system less shaky. As a result, we gradually are extending more and more credit. The large jump in exports in the last two months largely is due to this fact. There looms no reason ahead why our export figures should not continue on their accelerated upward path.” Although a reaction in prices on the New York Stock Exchange was noted recently, and carried the general level of quotations back to or a little below the July 30 prices, it was very far from meaning that the recent improvement in the market was wiped out. What the recent course of prices docs indicate is that we are still in the period of readjustments forced by the untoward events of last summer and their continuing effects. The first readjustment from conditions of peace to conditions of war was abrupt and violent. Its immediate effect was commercial and financial disorganization. Further readjustments to the conditions caused by the war will take place side by side with the readjustments from disorganization to order, which will gradually restore normal coditions in the trade of the world. Those readjustments are already under way. I hey show in the money and exchange markets; in the clearer appreciation of the needs of business; they show in the cautious recovery in trade, which is already under way. The readjustments which are now seen to be under way arc supplying a balance in favor of progress in finance and in trade.