Arizona republican., 1905-09-16
PHoENIx. ARIZONA. SEPT. 16, 1905
The High Credit of the Territory.

SICdAb OA lAAS
 The sale of territorial bonds author ized by the territorial loan commission yesterday established new high water mark for Arizona's credit in the money markets of the country.
 A bid of par. plus the cost of en- craving the bonds and the other eX- penses of issue. was accepted for an issue of S25.OOO 4-per cent bonds which are to run not less than 20 years nor more than 50 years. Had the law authorized the commission to issue the bonds for a definitely fixed period. and had the issue been sufff- cientIy large to be attractive to capi- tai. bids no doubt would have been considerably higher But the trans action as it stands is altogether grati- flying.
 Never before in the history of the territory has a 4-per cent bond been issued. or bonds sold in the open mar ket that bore a lower interest rate than 5 per cent It is true that, two and a half years ago, there was an issue of territorial bonds to the amount of s319,OOO at 9 per cent. but that was to take up the narrOw-gauge railway bonds issued by Pima many years ago. and the low interest rate was the result of a compromise with the holders of the Pima county bonds after the.r validity had been establish ed by decision of the supreme court of the United States. Yesterday was the first time that an effort was ever made to sell in the open market ter ritCrial bonds bearing a lower rate than per cent.
 The issue authorized yesterday was made necessary under the territorial statutes which make it obligatory up on the territory to issue its bonds in lieu of certain classes of bonds hereto fore issued by the counties. Bonds is sued by Pima county to the amount of S25OOO fell due on the first of July last, and that county, not being in position to discharge the debt-or at least preferring to renew the Obliga- tfon-made a demand upon the loan commission to refund the indebtedness DN lllt issue OL ltILALt3i l-A1 DDAlNlS- IL should be understood, by the way that the true debs of the territory is not increased by bond issues of this na- ture Under the law, Pima county will be required to pay into the terri toriaI treasury, so long as the bonds authorized yesterday are unpaid, mon ey sufficient to meet the interest on the obligation. The net result is that Pima gets the benefit of the territory's high credit. and has to pay but i per cent interest on an indebtedness which hitherto has called for ' per cent in terest
 When he found that the new bond issue was necessary, Governor Kibbey decided that a point had been reached in the history and development of the territory where it was no longer nee essary to pay per cent interest on it's bonds and the territorial treasurer was directed to advertise the sale of 4-per cent bonds.
 The bid accepted yesterday amounts, in effect, to a premium of per cent, ] for all former issues have been at the expense of the territory, and it would cost at least 8 per. cent Of $25,OOO to engrave the bonds and pay the other expenses connected with the transac- tion. Were the 5-per cent bonds of the territory to bring a proportionate premium they would have to sell at better than S125.
 A price of S1.O3 for Arizona's 4-per cent bonds-and for such a small is sue as S25,OOO-is pretty good for a territory which, according to the pa triotic papers of Cochise county is doomed to destruction. But evidently, people outside the territory as well as the folks at home understand pretty thoroughly that Arizona is likely to do business at the old stand for awhile yet notwithstanding the governors eff forts to eqUalize the burdens of taxa tion so that they will fall measurabIy l