The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-08-25
OWNING OUR DEBTS.

OWNING OUR DEBTS.
The offer by the capitol commission
of the certificates of Indebtedness
which they are authorized under the
law to issue gives a splendid oppor-
tunity, such as a great many people
have desired, to secure the safest pos
sible investment for small sums of
money. These certificates, which are
guaranteed by the whole property,
faith and credit of the state of Min
nesota will have three years to run
and bear interest at 4 per cent. They
can be issued in sums as low as $50,
and are thus placed within the reach
Of persons who have but a small
amount Of money and desire less to re-
ceive a large rate of interest than to
be guaranteed against every possibility
of loss. The commission has done
| most wisely in deciding to make the
denominations of the certificates so
moderate, and there VIII be unques-
tionably large demand for them, with
the offer of a handsome premium
Scarcely any change can be made
more conducive to financial stability
than the adoption of a similar policy
by counties, municipalities, states and
the nation itself When the peoples
debts are held by the people them
selves, they will feel that they have
personal stake in the government that
nothing else can give. There will also
be less danger, in times of commercial
distress, Of excitement or unreasoning
panic, which is the chief cause of fail
ures. People who have money invest
ed in such bonds are not in a hurry
to get rid of them and do not throw
them upon the market when everything
else is falling. The practice of issuing
such bonds in the past seems to us to
have been copied mistakenly from that
followed by large private corporations
When railroad or syndicate desires
to negotiate loan it deals with some
big banking concern or invites general
competition Of capital. Such bonds are
made of large denominations, and it is,
of course, to the interest of principal
and agent that the largest amount of
cash possible should be realized. Bids
! are advertised for accordingly, and the
| person who offers the highest premium
takes the securities, allowance being
made for rate of interest, date of ma
turity and the security of property
! Such bids are nearly always made by
large capitalists, banks, trust com
panies and financial agents The indi-
vidual purchaser, who wishes to buy a
small amount, would be willing, per-
haps, to pay more, as he purchases at
secondhand, and the middleman reaps
the benefit. This is, of course, the best
way for individuals or private corpora
lions to manage their finances.
1t seems as if the case of a public
corporation, might be little different.
For instance, if we were to have a
new state or city loan, or if the old
bonds were to be refunded, we believe
that it would be less important to the
community at large to obtain the
highest possible price that might be
brought out by competitive bidding
than it would be to have these bonds
! scattered in small quantities among
the people, instead of being held in
bulk by institutions. If a city or state
treasurer were authorized to offer such
bonds in sums of $50 and it's multiples
at par, in single bonds or small blocks
only, there are very few communities
| fIn
amount would not be absorbed quickly.
Possibly a little more cash comes
in from larger premiums on bids; but,
on the other hand, the advantages
that we have already pointed out, ac-
cruing from the holding of their own
would be realized
When the same reasoning is applied
to the national debt, the advantage is
| immensely greater. Europe would not
have us at her mercy and send United
States bonds up and down at pleasure,
and gold eastward and westward as
| her interests should dictate if national
| debt were a national possession. We
have now developed sufficiently and
accumulated capital enough Of our
own, we believe, to at least
purchase our own debts. The policy
followed in issuing the capitol certifi-
Gates is a distinct advance upon the
old custom. The G o b e looks for
ward to the day when laws will be
passed doing away with proposals and
bids, and placing all bonds issued by
the people directly at par among the
people.