Past and present of the city of Quincy and Adams County, Illinois, Part 39

Author: Collins, William H. (William Hertzog), 1831-1910; Perry, Cicero F., 1855- [from old catalog] joint author; Tillson, John, 1825-1892. History of the city of Quincy, Illinois. [from old catalog]
Publication date: 1905
Publisher: Chicago, S. J. Clarke Pub. Co.
Number of Pages: 1228

USA > Illinois > Adams County > Quincy > Past and present of the city of Quincy and Adams County, Illinois > Part 39

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192

PAST AND PRESENT OF ADAMS COUNTY.

debt, $80,199. The bonds surrendered include every variety of city bonds." It appears, therefore, that the city was able by issuing registered bonds to refund a portion of its city debt at a substantial diseount. The eity ronneil on January 6, 1868, adopted a resolu- tion that an advertisement be inserted in the Quincy Herald and in the Quincy Whig and Republican and in a newspaper printed in New York and in one printed in Boston, that the city stood ready to issue new registered six per cent twenty-year bouds for all out- standing bonds of the city at the rate of seventy-five cents per dollar, principal and in- terest ineluded. Much opposition developed to this aet of the city council, as its necessary result would be to impair the credit of the city. In consequence the resolution was re- seinded at the meeting of Feb. 3, 1868. and the resolution of June 9, 1866, above referred to was reaffirmed.

In a communication from the mayor that was read at the council meeting of January 22, 1868, he stated that he had refunded dur- ing the year bonds to the amount of $106,140 by issuing in their place $81,200 of registered bonds, and that he had thereby made a sav- ing to the city of $45,000 in debt and interest. The ability of the city in the two instances above mentioned to refund its debt at a dis- connt was undoubtedly due to the fact that it had defaulted in many instances in payment of the principal and interest of its bonds, prob- ably from necessity, as it was simply impossi- ble to meet these demands under the tax rate of one dollar and three cents fixed by the aet of February 14, 1863. Many suits were brought against the city for over-dne bonds and interest. One of these cases went to the supreme court of the United States, where it was decided February 4. 1867. This is the case of l'. S., ex rel. Von Hoffman, vs. Quincy, 4 Wall., 535. The city's defense to the suit was that under the limit of its taxing power fixed in the act of Feb. 14, 1863, it was im- possible for it to meet its matured obligations, as all of the moneys it was possible for it to raise were needed for its ordinary expenses. The bonds involved in the litigation were the Northern Cross bonds and the aet authorizing their issue had also authorized the city to levy a tax for the payment of the interest on the same. The court held that the legislature of Ilinois could not deprive the city of this power as it had become part of the contract and that insofar as that aet affected the bonds, it was a nullity. It said: "It is the duty of the city to impose and collect the taxes in all respects as if the act had not been passed. A different result would leave nothing of the contract but

an abstract right-of no practical value -- and render the protection of the constitution a shadow and delusion." After this decision be- came generally known it was no longer pos- sible to fund the debt at a discount. Accord- ingly on Aug. 3. 1868, the mayor was an- thorized to fund all outstanding railroad and improvement bonds at par but some doubts seems to have still existed as to the legality of the outstanding public service bonds, for we find that on Oct. 5th of the same year the finance committee was authorized to fund these at seventy-five cents on the dollar. In the mayor's communication of January 22, 1868, he stated that there were then unsatisfied judgments against the city in the United States court amounting to $145.000 and that the city was liable for other judgments which would increase the amount to not less than $200,000. Between July 1, 1866, and July 1, 1872, $1,390,500 of registered bonds were issued all of which represented the funding of old indebtedness of the eity. Such of these bonds as were not paid on their maturity were from time to time again refunded and new registered bonds were issued in place of them, so that at the present time all the outstanding bonded indebtedness of the city is represented by registered bonds.

PAYMENT OF THE BONDED DEBT.

The bonded debt of the eity reached its high- est point after the second $250,000 of bonds had been issued to the Q. M. & P. railroad. In the comptroller's report of the year 1881 we find that the total bonded debt including the acerued interest on the unregistered bonds which remained unpaid, amounted in all to $1,922,631, and that judgments had been ren- dered against the city in the U. S. courts that aggregated $88,807. The heavy burden of the city's indebtedness had again led our citizens to favor if possible a repudiation of that por- tion of the same for which the city had re- ceived no value at all or but inadequate value. This was represented by the M. & M. bonds. which, as the road for the construction of which the bonds had been issued had not been built, represented a total loss. It also included the debt funding bonds which represented. as we have seen to a considerable extent city serip, for which the city had received but a fraction of the value represented by the bonds. Under the leadership of Mayor JJ. K. Webster the payment of this unregistered debt was resisted and the interest on the same as it be- Pame due remained unpaid. It would have been possible to have refunded this debt at a very considerable discount as the holders of the bonds evidently entertained a doubt as to their

193

PAST AND PRESENT OF ADAMS COUNTY.

validity. Mayor Webster, however, opposed any compromise and the result was that in the ensuing litigation the city was defeated and during the first year of Mr. Webster's term as mayor judgments were rendered against the city as stated, in the sum of $88,807. and at the end of his second year, ending April 1. 1882, there was outstanding past due indebted- ness represented by judgments and outstanding warrants exceeding $145,000. Mr. Webster also resisted the payment of $53.500 due the Water Company and the Gas Company for services rendered under contract, but in this litigation he was successful as the court held that this debt had been created in contraven- tion of the provisions of the constitution of 1870, limiting the power of the city to incur in- debtedness. It was during this time and in the following year that the affairs of the city were at their darkest. As the Gas and Water companies found that they could not collect their past due debts the fire hydrants were dismantled and the city was left without light. In the message of Mayor Deaderick of March 31, 1883, he states that unless the Gas company would make a considerable reduction in the price asked, he was unable to see how any arrangements could be made for lighting the city by gas and he also refers to the lack of fire protection. The citizens had successfully resisted the collection of any tax above the one dollar and three cents for city and school purposes and as a result the revenues of the city were wholly inadequate for its needs. The legislature, however, passed an act which gave the city the power to levy an additional tax of ninety cents on the $100 of assessed valuation and with the added revennes thus obtained the affairs of the city soon took on a brighter view. After a short interruption it again seenred light and water for publie purposes. The interest charges were promptly met and the city again entered upon a period of prog- ress. By the act of July 1, 1883, the dram shop hieenses in this state were inereased to $500 a year, and this also added a very con- siderable sum (about $35,000) to the revenues of the city. The city at this time entered the period of debt payment. Prior to that time such payments as were made were the result of judgments that were collected by mandamus. The following table will show the rednetion of the city's indebtedness for each year from May 1, 1881, to May 1, 1905:

TABLE SHOWING THE REDUCTION OF THE BONDED DEBT SINCE, MAY 1, 1881.

1881. May 1. total debt $1.922,631

1882

1,905,453

1883 66 1.901,812

1884

1.888,571

1885

1.828,519

1886

1,817.728

1887

1.741,900

1888

1,728,000

1889

1.702,300

1890

1,668,400

1891

1,640,700

1892

1,615,000

1893

1,580.400

1894

1,532,200

1895

1,467,300

1896

1,405,700

1897

1.344,200

1898

1,285,400

1899

1,234.400

1900

1.136,900

1901

1.099.400

1902

. .

1,071,300

1903

1.016.100

1904

984,800

1905

928.800

Cash in bond sinking fund

50,000

Net debt May 1, 1905

878,800

This debt reduction was brought about by the creation of sinking funds, the tax to raise which is certified by the anditor of the state for the payment of the debt. The method pur- sued is for the city council to adopt a resolution requesting the levy of the sinking fund tax which is certified to the auditor who thereupon takes the steps necessary for the levy. It was the practice to pass such a resolution an- nally until Alderman Van Frank at the meet- ing of the city council on Dec. 21. 1892, was in- strumental in having a resolution adopted pro- viding for the levying of an animal sinking fund of $50,000 to meet the payment of the bonds which would become due up to July 1. 1899.

PRESENT PLAN FOR PAYMENT OF DEBT.

Under the administration of Mayor John A. Steinbach, $614,000 of the registered bonded was refunded in the years 1897 and 1898. The dates at which the new bonds were made to mature were so arranged as to enable the city to pay off each year the bonds that would ma- ture that year. An ordinance was adopted on April 10, 1899, which provided for a sinking fund for each respective year equal to the amounts that had been made to mature that year. This plan for the payment of the debt is shown by the following table :

The first column of the above table shows the date when the bonds will mature. the ser- ond column shows the amount of the maturing bonds, the column the interest rate, the fourth column the amount necessary to be raised

٠٠

194

PAST AND PRESENT OF ADAMS COUNTY.

annually for interest, the fifth column shows by whom the tax levy is to be made, whether by the city council or the auditor of state, the sixth column shows the year in which the tax will have to be levied, the seventh column the amount of the bond sinking fund to be raised for each respective year, the eighth comum shows the amount of the interest to be raised each year and the ninth column the total tax required to be raised on account of the bond sinking fund and the bond interest fund for each respective year. From this table it will appear that the total bonded indebtedness of the city will be paid off by July 1, 1918, and that the last tax levy to be made for that pur- pose will be made in the year 1917. Under Mayor Steinbach's administration this plan has been consistently followed without any increase in taxation and with the result that the bonded indebtedness as shown at the present time only amounts to $878.800. As there have not been sufficient maturing bonds to take up the sink- ing fund, the city since the year 1901 has gone into the market and bought up its early matur- ing issnes, paying the requisite premium for the same. It is gratifying to be able to state, in coneluding this financial history of the city of Quiney, that it is now and since the year 1901 has been, paying off its debt in advance.

As stated elsewhere in this history, the author of the admirable plan under which the indebtedness of Quiney is being paid off so easily and rapidly, is Mr. Theodore B. Pape, the city's very able and public-spirited cor- poration counsel.

CHAPTER XXXVI!L.

QUINCY WATER WORKS-THE ORIGIN-PRIVATE OWNERSHIP PERIOD -- THE PRESENT PLAN FOR CITY OWNERSHIP.

At a meeting of the city council of Quincy held May 15, 1871, General James D. Morgan appeared before the conneil and read a resohi- tion which had been adopted by a Citizens' Association and submitted a report of a com- mittee of that association on water works. looking to construction thereof for fire pro- tection and urged that immediate action be taken for construction of the same. The conn- eil adopted a resolution appointing a commit- tee of three consisting of Mayor J. G. Rowland and Aldermen Henry Meisser and 1. 1I. Miller to have in charge the matter of water works and to confer with parties desiring to make propositions in reference to the construction and operation of the same and to invite such

propositions. The committee was authorized to ereet temporary water works at an expense not exceeding $5,000. This committee reported at a meeting of the city council held March 3, 1873, stating that they had put up a boiler and steam pump with the necessary appendages at the foot of Maine street, and had enclosed the same in a suitable building and constructed a pumping well and conduit with the required suction attachment : that the machinery ful- filled the expectation of the committee, it being but temporary to fill cisterns in the different parts of the city and that by means of hose attachment this conld be done at any time; that sufficient pipe had been purchased to reach Front street, together with two double hydrants: that it was the original intention of the committee to get sufficient pipe to reach fifty feet where a tank was to be put up and to purchase one or two more hydrants; that the total ontlay to the date of the report was less than $2,500. Accompanying the report was one from Edward Prince, who was thanked for his services to the committee. This was the beginning of water works in Quiney, city ownership characterizing the origin.

About five months later or August 7, 1873, the city council adopted an ordinance by which the city transferred and conveyed to Edward Prince "all its right, title and interest in the boiler, pump, steam connections, pump house. pump-well, inlet-pipe, and valves at foot of Maine street. Also the iron pipes, extra east- ings, valves, hydrants, and all other things pur- ebased by said city for temporary pumping work. And said city, at such time and on such terms as said Prince and said city may agree upon, is to receive actual cost for its invest- ment in said temporary pumping works up to the time said Prince signifies his acceptance of this ordinance ---. " The same ordinance. which was duly accepted, granted to Prince "the exclusive right to construct. operate and maintain, and operate water works in the city of Quiney, Illinois, for a period of thirty years from the date of this ordinance, upon the terms, conditions and stipulations hereinafter mentioned." Among the conditions, Prince was to make certain extensions and improve- ments. The rate fixed for hydrant rental was $200 per annum per hydrant for the first 100 hydrants, $150 per annum per hydrant for the next fifty hydrants, and for all other hydrants at the rate of $100 per ammm per hydrant. Sertion 13 of the ordinance read as follows: "At the expiration of thirty years from date of this ordinance, if no agreement can be made for renewa! or continuance of contract, said city shall pay for said works their then actual cash value.'

195

PAST AND PRESENT OF ADAMS COUNTY.

Mr. Prince sold the water works to Messrs. L. and C. Il. Bull, who conducted the same until the expiration of the contract, which expired Ang. 7. 1903, and continued to conduct the works pending further negotiations, re- sults of which are stated hereinafter. To give anything like a detailed account of the many and often serious disagreements between the eity and the company during the long period would require a volume. There were differ- ences involving hydrant rental, private rates and extension of the works, accompanied at times by litigation and much feeling and no little public inconvenien .e. For a long period the company declined to make extensions. but for abont the last decade, the company has made extensive and valuable improvements and extensions and has given notable attention to the filtration of the water which has acquired a high standard of excellence.

As early as the year 1890. the city council declared that the only solution of the existing differences was for the city to build its own water works. This declaration was under the administration of Mayor George H. Walker. In the year 1894. under the administration of Mayor John P. Mikesell, a similar declaration was made. Immediately before retiring from office in the spring of 1895. Mayor Mikesell recommended to the city council the establish- ment of a water works sinking fund. The rec- ommendation was coneurred in and the fund was started with $12,000. From that time on the fund has been continually increased until it now amounts to over $250,000. Mayor John A. Steinbach, who was first elected mayor in the spring of 1895, and has been mayor since that time. has been an earnest advocate of in- creasing the fund as rapidly as possible and has at all times had the hearty support of the alder- men.

When the thirty year contract with the own- ers of the water works was about to expire. the city had the works appraised by three ex- perts, namely, Messrs. John W. Alvord. Daniel W. Mead and Hiram Phillips, who estimated the value of the plant at the expiration of the franchise at $649.159. On receiving this esti- mate the city opened negotiations with the own- ers of the works for renewal of the contract on mutually acceptable terms. immediate eity ownership of the works being impossible, as the city was still in debt beyond the constitu- tional limit. The city proposed to the owners a new contract by which the city would bind itself to take water for public purposes during the contract, the owners to agree to accept a reasonable return on their investment, as it was appraised, and to allow the city the benefit of the earnings of the plant in excess of such

returns which the city was willing should be as much as seven per cent. The company de- (lined the proposal. holding the appraisement of the plant to be too low and that the owners were receiving no more on their property than what was a reasonable return thereon. and that they could make as much with the money it they sold the property at the appraised value as they were then making out of the plant. However. the company said that they would not stand in the way of the city carrying out its declared plan for ultimate city ownership and the company said that if the city conkl find the necessary capital from other sources. the company would sell the plant at the ap- praised valne, although holding this valuation to be too low. The company gave the city and its assigns a written option to purchase the water works at any time prior to October 1. 1904, at the appraised valuation.

THE PLAN ADOPTED FOR CITY WATER WORKS.

With this option from the owners of the works, the city opened negotiations with other local capitalists, and as a result The Citizens' Water Works company was organized by citi- zens of Quincy. The capital stock was $100,- 000, and the balance of the money necessary was raised by the company issuing five per cent first mortgage bonds for $300,000, and six and one per cent second mortgage bonds for $250,- 000. The city transfer read its option to this company which bought the water works there- under. The new company was given a fran- chise for thirty years, the ordinance being adopted Sept. 19. 1904, and accepted by the company on the 24th day of that month. On the 30th of the same month, the city council passed an ordinance ratifying the franchise ordinance and the company's acceptance of the same. The franchise ordinance sets forth the conditions of the contract between the city and the new company. Under the contract the city has a continuous option to purchase the water works at any time and all extensions and im- provements that may be made for the sum necessary to enable the company to pay back to the stockholders the $100,000 which they have invested in the enterprise, and to pay the indebtedness of the company then outstanding. This sum would at present be substantially $649.159, but it will probably be less hereafter. The city gets the benefit of the net earnings of the water works remaining after the payment of the agreed annual dividend of six per cent on the capital stock. The city is given express authority to fix the water rates, and shares in the management of the company. the city hav-

196

PAST AND PRESENT OF ADAMS COUNTY.

ing reserved the right to appoint one of the three directors. By an arrangement with the banks taking care of the mortgages, namely. The Rieker National Bank. The Quincy Na- tional Bank and the State Street Bank, the city receives five per cent compound interest on its $250.000 sinking fund, which had previously yielded but three per cent. This sinking fund will at all times be substantially equal to the second mortgage bonds of the company from time to time onistanding. Even if all of the net earnings of the works are used in making extensions and improvements. the first mort- gage bonds will all be paid off by October 1. 1920, at which time the second mortgage bonds will amount to $550,000, and the city will have in its sinking fund on deposit in the banks $550,000. which will then be an amount equal to to the total bonded debt of the Citizens' Water Works company. This would leave the $100,- 000 of stoek unprovided for, but the city woukd still be getting five per cent compound inter- est on its sinking fund, which would retire the stock in abont three and one-half years. Thus on the most unfavorable assumption, the city would become the owner of the water works in abont nineteen years from the present time with all improvements and extensions of the same. The city may, however, if it desires to do so, own the works not later than eleven and one-half years from this time or shortly after the year 1916. On Oct. 1. 1917, the total bonded debt of the eity will be but $80,000, and at that time the city will lack but $177,500 with which to complete the amount necessary to purchase the water works. With its debt thus within the constitutional limit, they could borrow the required $177,500 and take over the water works at that time. If any of the com- pany's net earnings are used to pay on its bonded debt. or if the city should add to its water works sinking fund, of course this would hasten the period at which the city could be- come the owner of the water works. The fol- lowing tabulated statement shows the earnings of the water works for the five years im- mediately preceding the year 1904:

1899

$69,256

$22,577

$46,679

1900

73,382

25,899

47.783

1901

79,416

27.884

51,532

1902

81,868

29.357

52,511

1903

87,252

31,658

55,594

Mr. Theodore B. Pape, the city's corporation connsel, is the author of this plan for city water works and it is in every way worthy of its capable and public-spirited anthor. In its in- numerable safeguards for the public interests, in the magnitude of its continuous benefits to the people while the plant is in the hands of

the company- benefits practically equal to city ownership-and in the ease and shortness of time by which the plan is destined to settle for- ever and in the best interest of the people. one of the most perplexing problems of Quincy, this plan probably has no equal in the history of municipalities. "The Quiney Way of Securing City Ownership of Water Works" is unique.

The present officers of the Citizens' Water Works company are as follows: President, John P. Mikesell: secretary, J. M. Winters: treasurer, Henry C. Sprick. The directors are, John P. Mikesell. Theodore B. Pape and Henry ( :. Spriek. This is the list of stockholders: Il. (. Sprick, P. B. Williams, Il. Heidbreder, I. F. J. Rieker, Jr., J. L. Duker. F. F. Whitley. Ger. G. Arends, E. J. Luegering, Joseph Jacoby, B. Awerkamp, Chas. Il. banter, A. II. Wehmeyer, John A. Sohm. J. M. Winters, Thomas B. Ryan, Louis Wolf, A. A. Schering, Wm. Sigsbee. Frank Giefing, H. H. Merten, F. W. Brinkoet- ter, Simon Duker, C. P. Uhlmann, E. Cottnam, Wm. H. Govert, Henry Bornmann, Edward Sohm, F. W. Menke, F. J. Brinkoetter.

CHAPTER XXXIX.

RAILWAY AND WATER TRANSPORTATION FACIL- ITIES-QUINCY'S PART IN RIVER IMPROVE- MENT WORK-INDUSTRIAL AND COMMERCIAL STATISTICS AND ORGANIZATIONS.

The earlier history of Quiney's transporta- tion facilities is given elsewhere in this work. The railroad bridge over the Mississippi River, cost $1,750,000 and was built in 1868. The bridge was remodeled by the C. B. & Q., in March, 1898, at a cost of $157,000. The wagon bridge attachment was opened Sept. 10, 1899, and cost $50.000. During the year 1904, 16,880 engines, 43,473 passenger ears and 134,426 freight cars crossed the railroad bridge, while during the same year. 1,210 steamboats passed through the main river draw.

These are Quiney's present railroads: The C. B. & Q. to Chicago and to the north and northwest, via. Rock Island. The Quincy, Omaha & Kansas City to Kansas City. The Hannibal & St. Joseph, to Kansas City, Atehi- son, Leavenworth and St. Joseph. The St. Lonis, Keokuk & Northwestern to Burlington on the north and to St. Lonis on the south. The Carthage Branch of the C. B. & Q., to Burlington, Ta. The Quiney, Alton & St. Louis to East Louisiana, Mo. The Wabash, to Chi- eago, Buffalo and Pittsburgh on the east, Kan-

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Past and present of the city of Quincy and Adams County, Illinois, Part 39

Author: Collins, William H. (William Hertzog), 1831-1910; Perry, Cicero F., 1855- [from old catalog] joint author; Tillson, John, 1825-1892. History of the city of Quincy, Illinois. [from old catalog] Publication date: 1905 Publisher: Chicago, S. J. Clarke Pub. Co. Number of Pages: 1228

Author: Collins, William H. (William Hertzog), 1831-1910; Perry, Cicero F., 1855- [from old catalog] joint author; Tillson, John, 1825-1892. History of the city of Quincy, Illinois. [from old catalog]
Publication date: 1905
Publisher: Chicago, S. J. Clarke Pub. Co.
Number of Pages: 1228