The Richmond Virginian. (Richmond, Va.) 1910-1920, 1910-06-06
OVERsTAYING A MARKET.

Governor kitchin and the great State OF
North Carolina, as Ex-Governor Robert Broadnax
Glenn never tires of denominatlng it, would be
much aggrieved at the suggestion that the extra
session of the Legislature, Just called, was neces-
STATED by'indulgcnce in q speculation that was
almost akin to a gamble. Yet, from all we can
gather OF The situation, Just That nnHar-
ranted acceptance of risk which has necessltated
the resurrection Of that possible trankcnstcln
which always exists in legislative body en-
gagged in legislation.
To explain; North Carolina, whose public debt
IL much smaller than that Of the great majority
of States, is faced with a bonded debt of about
S3,O00,000, which natures on July ]. At the
last session of tho Legislature, which met IN
January 1909 act passed authorizing
the issue of 4 per cent rcfunding bonds saable
at not less than par. At that time. and for a
year later, these bonds could no doubt have been
readily hoated. Instead of putting them on the
market, however the issue was Withheld until the
middle of May, of this year In the meantime
many causes intervened to change a condition
of easy money into one Of 'tightness As a
consequence. interest rates hardened, and the
market for bonds sagged When the bids called
tor In May were opened, the issue not more
than half subscribed for. But instead of accept
ing such bids as were at over par, the State
officials rejected them all and again advertised
III falling market. with the natural result that
the second subscription was lighter than the first.
Result. final: the acceptance Of such bids as were
received and the necessity Of Governor and people
having Legislature. ION their hands.
Without other reflection on North Carolina
than could be made in the case of any other State
IN the dilemma, this would be IN itself large
penalty to pay, both III actual expense and poten-
tal risk, for lack Of fundamental business call-
ton. BTt the raising Of the rate of interest TO 5
per cent Will mean "A loss to the State of 100000
annually for 30 years. This amount, plus the ex-
penso OF the extra session, and Plus the interest
Will spell an ultimate total of upwards Of &4O0,-
coo lost as the result OF wager that the bond
market would hold eood-a wager, too, the win
ming Of which would have saved not IL exceed 4
per cent on 100000 for six months, $50
900. The State has simply bet 100000 to $780,
0OO-or odds OF nearly 5 to lon the continued
ease OF the bond market quantity az uncertain
as the most tickle racehorse that ever ran.
We note that in this emergency appeals are be-
ing made to the patriotism of the people to sub
scribe for issue which the money market is
10th 10 absorb. The case of France and the Ger
man indemnity is used as an inducement to this
course. But money is rarely a sentimental
quantity and they are rare instances where patri-
otism involves direct personal sacrifice. II would
not seem that this Is of them, calling as it
would for small portion of the population to
accept the onus OF a loss to the whole body of the
State, caused by the well-meant, but shortsighted
policy of its trusted officials.
Three million dollars is quite a nifty little
sum The best possible credit cannot always
walk out in the market and pick it up with an
Il. O. t. at nominal rates. What North Caro-
lima is now having trouble to do, a city OF the
resources Of Philadelphia recently failed to ac.
complsh. Now and again fortune is accumu-
lated by bargain hunter: but in every such case
the bargain was that secured by a purchaser who
in most instances bought cheaply from seller
who, as North Carolina, having to meet maturing
obligations, overstaved one market without being
able TO wait for another
Probably Mr.. Pttham. of Boston. who has
been captured by Madriz is one man now heartily