Weekly independent. [volume] (Elko, Nev.) 1887-1914, 1903-05-01
ruEsnooL nosD ExenAxcE.
m. car.on Nes. IN o=ona,eptins o

The Carson NeEs in oomnterting on
the Silver State article relative TO the
exchange OF school bonds, says:
The Silver State Il entirely at sea
First its figures ARE all wrong- and in
stead Of a loss to tie school fund a gain
Of some $4,000 or more l. made b. The
change. There was no secrecy for III
Sexs published details Of the proposed
transaction weeks ago aud the matter
xas brough: ont before a committee
composed Of members % the Committee
on Education III each bouse OF the last
Legislature. The affair Is pot . political
one in any sense o. the word.
II the Silver State would care for q
statement Of the TRANSACTION as IT is,
here goes:
The State Board OF Education con-
sistrpg OF Governor Sparks. Superin-
tendent Ring and President Stubbs, for
come time Contemplated a change IN the
State school fund securities OF L. 3 1
per cent bonds OF 1867, PAR value s691,-
900, in view 81 the fact that at maturity
the only alternative would be cash o: d
return Of two per cent on the invest
mept.
The Beard invited the Senate and
House Committees on Education TO at
teud a meeting and the members did 6 o
attend. when this matter was thoroughly
exploited and the committees approved
the proposed plan.
The United States Treasury Depa't.
ment il informed The State Board person.
ally and ~ circular that the bonds
wonld be redeemed in tao per cent
bonds OF the United States In 1877, ~
in cash, thus confirming their ideas.
The Board after much Investigation de.
cided it a better policy to sell bonds at
market rates and ~re.iuvest tile pro.
ceeds ID bonds netting a better rate Of
interest, and at the same time increase
the principal. This WAS done ia the
following manner. United States : per
cent bonds to the amouut OF 100000
were sold at 81. 10 or l5i per cent above
the then market rate and the proceeds
reiDvested in Massachusetts . per cent
bonds at sl.G2L-bOLds having "A lie
Of 361f years, maturing in 1883 with al
earning capacity Of S2.9j. or | aud b.
100 percent better than the interest
earning capacity Of the Governments
As Of 1907. The principal was by that
method increased over $4,000. Tie
Massachusetts, bonds are gilt edge md
o.-nslo-z -, N s. a,.;.I ,,.I,....-
The Roard sent one Of its members East
TO make inquiry III :Le standing Of these
bonds and he received assurances from
reliable sources thai the bonds were the
best to be obtained. and that many
states OF the Union had secured hold.
Ings OF these bonjs. The idea that the
West Is now a creditor OF the East Is .
reversal OF the usual order Of things.
1t is a mangniticent transaction for the
State. both in life OF bonds and principal
and interest. The Board under tho law
have no right to reduce the State school
fund, but under the U. s. Treasury rul-
ing, they would 10 obliged to take a
lower rate Of interest and less face value
Ut ItluNGst VI DOLpS ti 1917, hIIlCH cHl
mani d premium OF 3j per cent in the
market, thereby inevitably and IN.
~aroidably reducing the school inDd
principal approximately $4,000. The
4 per cent bonds wOlld IN the course Of
four years pay 10 per cen interest. Tho
State has received ten per cent back in
premiums. II was considered poor
policy 70 hold these bonds when their
earning capacity wculd only be six per
cent for four years or ~ per annum
on the investment.
The earning capacity 81 all United
States holdings Of the State fund has
never exceeded | and % 100 per cent
by this financial st rokc the state has
increased its interest earning capacity
and b 100 per cent.
Tho tate 81 Minnesota has holdings
OF Massachusetts, 3 per zen b9nds to
the mount Of 81 00O, 0CO. Nebraska also
has large holdings Of them.