The Park Governments of Chicago 35 



bond experts indicate that these bonds do not have as high a 

 market value as bonds of the City or County governments. This 

 is due largely to the fact that the security behind the park bonds 

 is not so well understood, especially by buyers living at a dis- 

 tance. The savings banks of Massachusetts and New York can- 

 not legally invest in them. 



Several of the bond issues which appeared to the public to 

 have been sold at par were really sold below par. The South 

 Park Board sold two issues of 4 per cent, bonds aggregating $2,- 

 000,000, dated July 1, 1903, at a premium of $5,000. They were 

 delivered October 19, 1903, at which time $1,000,000 was re- 

 ceived in payment and the other $1,000,000 was deferred until 

 April 1, 1904, at 2 per cent. Instead of receiving a premium, 

 the Park Board by allowing the purchasers all of the accrued 

 interest and accepting only 2 per cent, on a deferred payment of 

 $1,000,000 really lost $28,000 as follows : 



Interest on $2,000,000 at 4 per cent from July 1, 1903, 



to October 19, 1903 $24,000.00 



Interest on $1,000,000 at 4 per cent from October 19, 



1903, to April 1, 1904 $17,999.97 



Less interest received thereon at 2 per cent 8,999.97 9,000.00 



$33,000.00 

 Less $5,000 premium 5.000.00 



$28,000.00 



It should be noted in connection with the above that all 



other bonds issued by the South Park Board have sold above par 



and this issue was put out in a year when the bond market was 



unfavorable. 



The West Park Board sold $2,000,000 of 4 per cent, bonds 

 in 1906 at a premium of $150. Although the Park Board re- 

 ceived the accrued interest on these bonds, $1,500,000 of the 

 purchase price was deferred without any interest — $500,000 for 

 three months, $500,000 for six months, and $500,000 for nine 

 months. This transaction, therefore, resulted in a net discount 

 to the Park Board of $29,850 instead of a premium of $150. 



The West Park Board also sold $950,000 of 4 per cent, 

 bonds in 1907 at a premium of $125. The Board received the 

 accrued interest but $500,000 of the purchase price was deferred 



