UNITED STATES OF AMERICA
                                     Before The
                         SECURITIES AND EXCHANGE COMMISSION

          Securities Act of 1933
          Release No.   7616 / December 10, 1998

          Securities Exchange Act of 1934
          Release No. 40770 / December 10, 1998

          Administrative Proceedings
          File No. 3-9724

          _______________________________
                                         :
          In the Matter of               :
                                         : ORDER MAKING FINDINGS AND
          City of Moorhead, Mississippi  : IMPOSING CEASE-AND-DESIST
                                         : ORDER
                    Respondent.          :

                                         I.

          On  September  24,  1998, the Commission instituted public cease-
          and-desist proceedings  pursuant  to Section 8A of the Securities
          Act of 1933 ("Securities Act") and  Section 21C of the Securities
          Exchange  Act  of  1934  ("Exchange Act")  against  the  City  of
          Moorhead, Mississippi ("Moorhead"  or  "Respondent") to determine
          whether Moorhead committed or caused violations  of Section 17(a)
          of the Securities Act and Section 10(b) of the Exchange  Act  and
          Rule 10b-5 thereunder.

               The   Respondent   has  submitted  an  Offer  of  Settlement
          ("Offer") which the Commission  has determined to accept.  Solely
          for the purpose of these proceedings  and  any  other  proceeding
          brought  by  or  on  behalf  of  the  Commission  or to which the
          Commission  is  a  party,  the  Respondent, without admitting  or
          denying the findings set forth herein,  except  as  contained  in
          Section   II.1.,  below,  and  as  to  the  jurisdiction  of  the
          Commission  over  the  Respondent  and over the subject matter of
          these proceedings, which are admitted,  consents  to the entry of
          this  Order  Making Findings And Imposing Cease-And-Desist  Order
          ("Order").

                                         II.

                    Based  on  this  Order,  the  Order  Instituting Public
          Cease-and-Desist  Proceedings  and  the Respondent's  Offer,  the
          Commission finds[1] the following:

               1.   The City of Moorhead, Mississippi  is  a  political and
          legal  subdivision  of  the  State  of  Mississippi  and  a  body
          corporate and politic.

               2.   On  or about November 8, 1995, Moorhead issued and sold
          urban renewal revenue  notes  ("notes") to the public in the face
          amount of $4.5 million.

               3.   The notes were issued pursuant to the Mississippi Urban
          Renewal  Law, Miss. Code Ann. Section  43-35-21,  and  were  sold
          based upon  a representation that bond counsel had concluded that
          interest on the  notes  would be excludable from gross income for
          federal income tax purposes.   The  disclosure  documents used in
          connection  with  the  note  offering represented that  the  note
          proceeds would be utilized within  three  years on various public
          projects.  In fact, Moorhead had no intention  of  spending  more
          than $45,000 on public projects.  The $45,000 was received by the
          Respondent  as  a  "premium" or "fee" for issuing the notes.  The
          remaining  proceeds were  invested  in  a  guaranteed  investment
          contract ("GIC") yielding a higher rate of return than the notes.
          The GIC provided  the cash flows to pay the debt service required
          by the notes.  This financing structure resulted in a significant
          and undisclosed risk  to the tax exempt status of interest on the
          notes.

               4.   Internal Revenue  Code  ("IRC") Section 103(b) provides
          that gross income includes interest  on  any  state or local bond
          which  is  an  "arbitrage  bond" as that term is defined  by  IRC
          Section 148.  IRC Section 148  (a)  defines  an arbitrage bond as
          "any bond issued as part of an issue any portion  of the proceeds
          of which are reasonably expected (at the time of issuance  of the
          bond)  to  be  used  directly or indirectly (1) to acquire higher
          yielding investments...."

               5.   IRC Section  148(c)(1)  allows  the proceeds of certain
          issues  to  be  invested  in  higher yielding investments  for  a
          reasonable temporary period until  such  proceeds  are needed for
          the  purpose for which the bonds were issued.  This provision  is
          known  as  the "temporary period exception." It provides that the
          bonds will not  be  treated as taxable arbitrage bonds if the net
          sale proceeds and investment  proceeds of an issue are reasonably
          expected  to be allocated to expenditures  for  capital  projects
          within specified time periods. Treas. Reg. Sec. 1.148-2(b)(1) and
          2(e)(2)(i)(1993);  Treas.  Reg. Sec. 1.103-13(a)(2) (1979).  When
          statements regarding reasonable  expectations with respect to the
          amount and use of the proceeds are  not  made  in good faith, the
          notes  are deemed to be taxable arbitrage bonds.  Revenue  Ruling
          85-182, 1985-2 C.B. 39.

               6.   Although  the  note  offering  issued  by  Moorhead was
          purportedly  structured  to comply with the requirements  of  the
          temporary period exception, at the time of the offering, Moorhead
          did not have the resources,  intent or expectation to utilize any
          proceeds from the offering, other  than  the  $45,000  premium or
          fee, for capital projects.  Subsequent to the offering,  Moorhead
          did  not  utilize  any  of  the offering proceeds, other than the
          $45,000 premium or fee, for any  capital  project.  The lack of a
          reasonable expectation to utilize more than  a  small  portion of
          the  proceeds  for  capital projects would violate the reasonable
          expectation requirements of IRC Section 148(c)(1) and Treas. Reg.
          1.148-2(e)(2).  Therefore,  a  substantial  risk existed that the
          issuer  would  not  be  able  to  rely  on  the temporary  period
          exception, making the structure of this transaction  a prohibited
          arbitrage   device  in  violation  of  IRC  Sections  103(b)  and
          148(a)(1).  The  violation  of these sections could cause the IRS
          to declare interest on the notes  subject  to  the federal income
          tax.

               7.   The  substantial  risk  to  the  tax exempt  status  of
          interest  on  the  notes  was  not  disclosed  to  investors   or
          prospective  investors  in  the offering.  The official statement
          and  arbitrage  certificate,  among   other   documents,  without
          exception, represented that Moorhead intended to  spend  the full
          amount  of  the  offering  proceeds within three years on various
          capital projects.  The official  statement  also represented that
          the  respondent  was  negotiating  with  a  specified   firm  for
          "architectural  services."   These statements were not true.   An
          official of the City of Moorhead,  with  the approval of the city
          council, reviewed and signed the documents.

               8.   Based  on  the  foregoing, in November  1995,  Moorhead
          violated Section 17(a)(1) of  the Securities Act by, directly and
          indirectly, using the means and instruments of transportation and
          communication in interstate commerce  and  the  mails  to  employ
          devices,  schemes,  and  artifices  to  defraud purchasers in the
          offer and sale of securities.

               9.   Based  on  the  foregoing, in November  1995,  Moorhead
          violated Sections 17(a)(2) and 17(a)(3) of the Securities Act by,
          directly  and indirectly, using  the  means  and  instruments  of
          transportation  and  communication in interstate commerce and the
          mails to obtain money  and property by means of untrue statements
          of material facts and omissions to state material facts necessary
          in  order  to  make  the  statements   made,   in  light  of  the
          circumstances under which they were made, not misleading,  and to
          engage in transactions, practices, and a course of business which
          operated  or  would  have  operated  as  a  fraud and deceit upon
          purchasers, in the offer and sale of securities.

               10.  Based  on  the  foregoing, in November  1995,  Moorhead
          violated  Section  10(b)  of the  Exchange  Act  and  Rule  10b-5
          thereunder  by, directly and  indirectly,  using  the  means  and
          instrumentalities  of  interstate commerce and the mails:  (1) to
          employ devices, schemes  and  artifices  to  defraud, (2) to make
          untrue statements of material facts and to omit to state material
          facts  necessary  in order to make the statements  made,  in  the
          light  of the circumstances  under  which  they  were  made,  not
          misleading, and (3) to engage in acts, practices, and a course of
          business  which  operated  or  would have operated as a fraud and
          deceit upon persons, in connection  with the purchase and sale of
          securities.

                                        III.

               In   view  of  the  foregoing,  the  Commission   deems   it
          appropriate  in  the  public interest to impose the sanctions set
          forth in Moorhead's Offer of Settlement.

          **FOOTNOTES**

          [1]: The findings herein are made pursuant to the Offer of
               Settlement of the Respondent and are not binding on any
               other person or entity in this or any other proceeding.
               ACCORDINGLY, IT IS HEREBY ORDERED, pursuant to Section 
               8A of the Securities Act and Section 21C of the Exchange 
               Act that the Respondent cease and desist from committing  
               or causing any violation and any future violation of 
               Section 17(a) of the Securities Act and Section 10(b)  
               of the Exchange Act and Rule 10b-5 thereunder.

               For the Commission, by its Secretary,  pursuant to delegated
          authority.

          ___________________
          Jonathan G. Katz
          Secretary