The Montgomery advertiser., 1905-04-15
BOND BIDS
 ARE REJECTED Governor Returns Checks
 to SyndicateS. WILL ADVERTISE AGAIN He Does Not Think Interest
 Rate is Fair. Jeiks Believes that state win Take Lit- tie Risk In Holding Renewal secu-
 rities For Few Months Longer.

Governor Jeiks yesterday formally rejected all bids that were made April 1 on the ss.4os.soo of refunding bonds to be substituted fro that amount of the States thirty-year bonds which will mature in January and July. 1906.
 The cause of rejecting the bids is that the Governor does not regard the highest offer as fair to the stste, being equivalent tc a basis of 3.43 per cent. interest on all the bonds.
 New advertisements will be prepared for second bids on the bonds but when 1t Is not known. There may be soms few weeks delay in the matter of ad- vertisements because the Governor said yesterday he believed the larger bId- ders were inclined to discount the mar ket value of the bonds because of the long time that must elapse before the securities are delivered to the purcha- sers.
 The Governor has sent back to all the bidders the certified checks that accom- panied their offers.
 Statement of Governor.
 T have rejected all bids offered for the State bonds," said the Governor yesterday. There were a number of bids at a premium which was fair to the State. but they called for, in ths aggregate. so few of the bonds, that E could not have disposed of, under the bids offered. either the As and Bs. $7,437,e00, due in July, 1906, or the Cs, due in January, 1906, for sss6.000.
 ''The highest bid made for the whole of the three issues was $LS3 premium on the one hundred dollars on II 5 Ia bond, or a basis of interest of 3.4s per cent. per annum. This is not fair rnte of interest for the treasury to pay. in my Judgment; and I am impelied by sense of public duty to decline to accept this highest bid; and to reject, lhsrs- fore, ali of the bids.
 .f was greatly disappointed at tEe offers made. It is explained in some quarters. however.--and the explanation Is reasonable.--that bidders were. shy because of the time which must elapse before the bonds could be delivered to the possible purchasers. The larger bidders considered that they were buy ing futures, and that there was dan- ger to them in possible adverse mon- ey market a year from this time. The State may be taking some chance it. self in holding them six months and year. hoping for a better opportunity to sell; but l cannot think that the danger is at all serious. Anyway, have not been able to see my way clear to parting with the bonds at what look upon as an unfair price.
 Gratiaed at Interest.
 The interest Alabamians have taken in the proposed sale has been very gratifying to me. and must be source highest bid for the whole of them was made by syndicate, Alabama banks, members of 1t, subscribing for over i've millions of the eight millions pid Tor. In common with every Alabamian I should be glad to see them all held at home. and the interest paid to home people"
 gomery was interested In the syndicate of bondbuYers who made the highest bid for the whole amount of bonds. The Embraced over $5,O00,0Oo which would have been subscribed by Alabama bankers.
 in the work of organizing the syndi- cate. yesterday received the following letter from the Governor notifying him of the rejection of the Did In which hlS Od"N "Montgomery, April II. 1905. MT. A. M. Baldwin, President First
 National Bank, Montgomery, Ala:
 Dear Sir---I enclose your check sent me as evidence of your good faith Tn carrying out your bid for State bonds
 "A number of bids were mad. made at 2 afford to accept, but the aggregate or such bids was not sufficient to take the bond Issues due either in Januarys 1906, or July, 1906. The two bids for the whole amount of the two issues were in my opinion. at premium so small, on a 3 1-2 bond, as to make the basis of interest the State would be were not fair to the State, as l look ar it. am impelled by sense public duty to reject all bids. and hence re- interest Very sTSiyi %i D. Jslxs.
 Governor"
 The Highest BIds.
 The bid of the syndicate in which the First National Bank of Montgom- cry was interested, If accepted. would have brought to the State a premium of Sl53,S699O It would have saved annually in interest $126,054 under the annual interest at the rate of 1-2 per cent.
 bids were opened. stated to repre- sentative of The Advertiser his belief that the basis of S.4S is the best the money market at present will allow. He said he had spent two weeks in New York observing the market con- ditions and his opinion was based on these observations.
 The next highest bid on the whole amount of the bonds was made by Q syndicate composed of the Hanover National Bank of New York, the Mer- chants and Planters Farley National Bank of Montgomery, and the Btrming- ham Trust and Savings Company. Their offer was 1OO.l25. equivalent to a basis of 3.49.
 The bonds which the new issue. run- ming for fifty years will retire bear some of them 4 per cent. and some 5 per cent. interest. They were the out growth of the plan or readjustment of the States debt in the seventies by the debt commission soon after the State had defaulted on the interest on bonds endorsed extravagantly for railroads in Alabama. The bonds of Class A for five years bore per cent. interest. for five years more per cent. for the next ten years per cent. and for the period beginning in 1896 and ending in July. 1906 are bearing 5 per cent. These bonds amount to $6.S59,600.
 The bonds of Class B are bearing $ per cent interest and have been hear Ing that rate since their issuance fr 1876. The total amount Is $6IS,000 Those of Class c, amounting to $s6s. 900 for the first five years bore 2 pei | cent interest and from 1881 to Janu | ary 1, 1906, are bearing 1 per cent, Should all these bonds be finally re | tired 1t would leave as the state ! bonded debt only $s54.000, which repre- | sents the amount of a refunding issu
 of the date of February 2T, 1887. an
 dated January 1, 1890. and due Janu 4 ary l. 1920.