The Montgomery advertiser., 1905-05-20
BONDED INDEBTED
 NESS OF ALABAMA A Brief History of the States Obligations from
 1923 to the Present Day.

the Legislature of February, 1893. 1895, and 1899, which acts authorized an ts- sue of bonds for a term not longer than fifty years, at a rate of interest not ex- ceeding per cent, to be sold at not less than par. The bids were opened
 by Governor Jelks on April 4th last. and 1t was found that two bids had
 been made for all or none of the re- funding bonds to bear 8 12 per cent in-
 terest. The highest bid, 101. .S31. a
 basis of 3.43, and the best ever made for a Southern security, was submitted
 by a syndicate composed of Messrs. Ladenburg. ThRlman & Co, and Messrs. Goldman. Sachs X Cc. of New York, the First National Bank of Birming- ham, the Peoples Savings Bank and Trust Company of Birmingham, the American Trust and Savings Bank of Birmingham, and the First National Bank of Montgomery. The other bid for all or none. 100 .125, a basis of 3.A9, was made by the Hanover National
 Bank of New York. the Birmingham Trust and Savings Company and the Merchants and Planters Farley Nation al Bank of Montgomery. Other bids were submitted for Ia per cent bonds by various financial institutions in the State amounting to $790,oO0. on a basis of 8 ,3S to 3. A, $40,000 of the amount, however. being bid at 10S, basis of 3.1S.se Individual bids were received for 8 I-2 per cent bonds amounting to $I59, 800, at from par to 105. Individual bids were received for per cent bonds to the extent of s27,700, all at par ex- cept S7,000 at 102.
 The bids indicated quite clearly that a bond bearing 3 1-2 per cent interest, even though free from all taxes in the State of Alabama, as is the case with these bonds, does not constitute an at- tro fxra trax fha RAnnIa nf Alabama. a State where the legal rate of interest is 8 per cent, and where per cent is the current rate on the best mencantile paper.
 The Governor, however. after duly considering the matter, decided to re- Ject all bids. the presumption being that he will at later date advertise for new propositions or negotiate direct with some syndicate on the entire issue.
 The recent sale of $25, 900 of 1-2 per cent bonds of the City of New York, on a basis of 3.T and S.4e. may lead some to believe that Governor Jelks acted unwisely in rejecting bid on a 3. .43 basis. which would have net ted the State $153.S69.90 as premium and would have saved S126.0b4 Rnnu- ally in interest When, however. the comparatively small indebtedness of the State of Alabama, together with It's rapidly increasing wealth. are taken into consideration. 1t would seem that the Alabama bond is the more desirable of the two. The fact that proposals were invited fourteen months before the bulk of the bonds could be delivered doubtless deterred many from bidding and it is possible that the final outcome will prove the wisdom of the Governor in declining all propositions. TherO is no question that a, bond of the State of Alabama is intrinsioally as good as that of any Government or municipality on the face of the globe, and the only ob- stacIe in the way pf It's selling on as low an interest basis as any. is the fact that Alabama Is yet in the early morn ing of its development, and the rates of interest current locally are too high to make attractive any investment at 8 1-2 per cent.