Morning appeal. [volume] (Carson City, Nev.) 1877-1906, 1903-06-21
TO THE PUBLIC.

1907. now makes a full statement Of the facts and
reasons which have governed them in this transac-
ton for the information of the people.
HISTORY.
"a, It will be well IN the first place give a brief
history of the bond transaction from the beginning
until the completion Of the sale. About two years
since Governor Sader advocated the sale of the Uni
ted States bonds due 1907 then in the Treasury. and
the purchase of United States Government bonds
turing in 1926. He showed and think clearly,
that the State Of Nevada would benefit very much
by the exchange The State Board. not being ac-
quainted with the details financial operations
hesitated until too late about accepting the
mendation Of Governor Sadler.
During the past winter the attention of the State
Board of Education called to the necessity Of
making investment of the public school funds at
losing the benefits by depreciation of the
bonds and lower rate of interest that would follow
The members of the Committees Education of
the Senate and the House called into the Gov
ernors Office to confer about the matter No definite
action taken by the members of the House, but
they agreed that If the Mass bonds found to be
valid bonds. the exchange OF the T. S bonds for the
Mass. bonds seemed to be good and advantageous
exchange for the benefit of the public school fund of
the State. Two members of the Board. keeping in
mind the recommendation of Governor Sadler some
two years were in favor of making the exchange
of bonds according to the offer Of Messrs. Kelly &
Kelly Of Topeka. Kansas: but the Governor was I'M
willing to engage in the transaction with the amount
of knowledge that he then had. Correspondence was
entered into with the Treasurer of Massa chusetts.
the Chemical National Bank of New York. the First
National Bank Of Chicago anil two three other
banks respecting the value of these bonds Letters
from these various banks gave indubitable evidence
that the bonds were regularly issued and a
valuable investment. During this inquiry the fact
brought out that the Massachusetts State bonds
had heen accented Inv the United States Government
deposits in the Treasury in place of United States
bonds thus showing the esteem in which the United
States Government held these bonds Although this
evidence seemed to place the transaction beyond
question. the Governor requested member OF the
Board go to Chicago Washington and Boston and
inquire as the value of the Massachusetts bonds
before he was willing to take any steps toward 1er
purchase. The member of the Board left home inn
medatey at the Governors request and advised with
the officers of the First National Bank of Chicago.
with the Assistant Treasurer at Washington and with
of the Massachusetts bonds established beyond
question and the fact telegranhed to Governor
, Sparks
The powers Of the Board Of Education have been
called in question. The statute which applies to the
investment of funds is found in Section 1897 Of Cut
ting Revised Statute It is provided first. that in
no case shall bonds be purchased without the
cta+e Roard of TdHcatfon making due and diigent
inquiry as the financial standing and responsibility
of the State States whose bonds it is proposed to
purchase.
complied with the provisions Of the statute and made
State. satisfying eself that the bonds were a safe
and valuable investment.
2 The statute says that the Board Of Education
shall require of the Acknowledgement of this State
his legal opinion as to the validity OF any Act OF
Acts of any State in which State bonds are issued.
In accordance herewith the Board of Education
consulted at every step and OBJ
tanned his legal opinion that the Acts which these
: issued were valid
8 The Act that the Board OF Education
direct the State Treasurer negotiate for in
: vestment of in United States securities or in
the bonds of this State in the bonds of other
States at the lowest purchasable price
The State Board of Education did SO direct the
Treasurer and made exchange Of bonds which will
result in keeping the public school fund unimpared
and will increase the rate of interest is shown in
the concluding portion of this statement.
THE VALUE FTHE MASSACHUSETTS BONDS
The first and only question to be considered is
this: Are the Massachusetts bonds good and safe
investment? If they are good and safe investment
further question be raised against them The
State of Massachusetts is only of the oldest
but is of the richest States in the Union 1t Is
furthermore conservative in its financial oper
ations It's bonds held in esteem by States and
Z individuals who desire safe and good investment
! The Massachusetts bonds which now held in the
State Treasury have not only good standing in the
money market. but similar bonds held by the
States of the West and Northwest to the amount. il
of two millions of dollars as an invest
ment for their public school fund. United States
bonds no longer a proiltable investment Inc
: interest upon United States bonds does not net t
( exceed 1S1 per cent per annum while the Massachu
bonds net the State of Nevada 3 per cent pc
: The result of this increase of earnings TO-
the public school fund will be appreciated when thu
semiannual dividend is apportioned to the public
I schools Of the State
The payment of the Massachusetts bonds is pro
vided FOR sinking fund which is created when tn
: bonds issued. sinking fund tax !aEled eac
year is calculated at a rate that will pay into tn
J sinking fund sufficient to pay the interest tn
bends regularly and provide for the payment OF tn
bonds at maturity.
} The total taxable property of the commonwealth
{ of Massachusetts per last published statement b
: the Secretary of the commonwealth and the Ia
Commissioner was as follows:
) Taxable real estate 80 434 1896, 295
{ Taxable personal estate ........ 1.673,442,21S
( Total taxable property ......i = 81 ,1OS,S4O,5l3
Thus it is seen that the taxable valuation
fords satisfactory basis for the issuance of the Mas
a chusetts State bonds for their direct and indret
! debt.
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