The Montgomery advertiser., 1906-03-18
THE BOND ISSUE.

State was offered for the 1-2 per cent bonds 1O1.ss, or for each $to0,00. s101.sS. The Governor did not believe the bids were fair ones and rejected all. He had good reasons for hoping that money would be easier. and that the State would be able to float bonds nearer a 8 per cent basis. Instead of money getting easier, 1t went higher. Notwithstanding this in Novephber. the State sold the bonds due in January, to the amount of ss6s, 100000 at the rate of 102 per one hundred. or at premium of Se.0o on s10O.00, a slight advance on the ofrereing of April before. This sale 1t is generally understood was not a particularly happy one for the pur- chasers. Money instead of getting cas- fer and lower, as was hoped, went l.gh- Ter all the time.
 In the great money centers many causes contributed to this condition of the market. Vast sums at high rate demanded by the late antagonists in the war in the far East, for one thing; thousands of new corporations being formed to carry on the most phenomi7 nal business of any era In our history, for another. The investigation of the insurance companies in New York City, and the attempt being made by the New York Legislature to reform these companies, and to more closely inspect the character of their securities was still another. While money is more plentiful than ever before. it Is much higher than it has been for many years in all the great centers. The demand for it has grown faster than the sup ply. To show something of Its value in New York. two months ago bids were asked for an issue of New York City Bonds running fifty years at 1-2 per cent There was not one bidder. The City of New York had to issue a per cent bond. thing that had not happened for many years. The prem ium on the per cent bond was large enough to reduce the basis of interest to something like 3,65. The New York City bonds are worth more in New York than the bonds of almost any State in the Union. because. not that they are any more absolutely safe than the Alabama bonds. or perhaps any State bonds, but because they arc prac- tically free from taxation. and are is- sued in the midst of the companies and banking institutions that carry for themselves or customers a large part of all the securities in this country. No 1-2 per cent bond. in our judg- ment in any large quantity, of any State or city can now be sold In the United States at par.
 There was some objection to selling the bonds last spring apart from the price. It was sixteen months before the bonds were due. and delivery would have been attended with some difficulty. though it could. of course. have been made. The bonds for which a contract has recently been made were fully advertised. The advertisement appeared in The New York Herald, Fi- nacial Chronicle of New York. which is the leading paper of It's kind in this country, and in other papers. Besides as many as two circular letters were sent to every bond house in the country and to some aprOad, all the DIE luSur- ance companies. and all the larger banking institutions. and%as many as two circulars to every person or firm that has addressed the Governors. of flee on the subject of the renewal Of these bonds.
 It Is easy to sec afterwards. All of us are wise tomorrow, We arc only sorry that we cannot be wise before and not after we act. No critic who reads this statement has been able at all times to read accurately the future Until they learn to do that, they should not expect or require 1t of their nengh- bors or officials. The fact Is. the State would have been better on if the offer of last April had been taken That is true. The difference in interest on the bonds if they had been issued under the bids of last spring and of this March, amounts to more than $3O OO0.O0 per year.
 But there is another side to it, The bonds sold in November to the amount of $e66.OoO0O sold at a premium for 1-2 per cent bonds The old bonds bore per cent The Alabama A and B bonds, for the refunding of which con- tract has ben just made. bore 5 per cent.