The Caldwell tribune. [volume] (Caldwell, Idaho Territory [Idaho]) 1883-1928, 1913-09-26
Commission OFFER.
Ed ideas BY THE
BOND DEALERS

The commission. of which Hon. !
M. Thompson of this city is a mem
Der, appointed by Governor Haincs to
investigate the irrigation laws, securi-
ties and projects of the state, has TAX
en- up the work in earnest. At the
last meeting of the commission, ]. E.
Clinton, secretary, was authorized to
write to various institutions in the
east asking for suggestions on irri-
CATION securities that would make |
such securities more marketable. A
number of banks have replied to the
letters sent out by Secretary Clinton,
and number OF helpful hints
may be cleaned. The Chase
National bank of New York has had
no experience that would be of value
to the committee, but indicates that
the bank is in hearty sympathy with
the work the committe has in hand. |
The firm of w. A. Reed & Co. of
Chicago gives its views as follows:
The whole theory Of financing If
rigation projects has, in our opinion,
been wrong. Ii man were to start
up in the manufacturing business he
would certainly not feel that he had
any legitimate basis for borrowing
other peoples money until he had
proved to the satisfaction of his
bankers that his ss-established
on q firm basis-was earning money
and his own capital had first been risk
ed to establish the business as going
concern. 1t seems to have been the
theory, however, in irrigation projects
to borrow the money first and then
develop the business. Obviously this
could effect but one result-a careless
and ill-considered expenditure OF
funds which would not have been so
expended had they been the funds of
partners and not creditors. Until,
therefore, you have reconstructed the
entire theory of financing it is our
opinion that you will have great diff
Guilty in obtaining capital for the de-
velopment of the dry land in your
state.
Two Solutions in Sight.
There are two solutions The first
solution and the best one, is Tor the
state to issue its own obligations for
the specific purpose of developing it's
arid lands. After all you issue bonds
to build good roads and we do not see
why It is not just as legitimate, and
even more SO, to issue bonds to de-
velop the obvious resources of the
state. The other solution is to in
terest private capital to come into the
state for the purpose of developing
large tracts, put them on their feet,
and then sell the bonds as first mort
cages against the property until the
water has been turned on the land,
the land we'll settled up, and the pay
ments have come into the irrigation
company for period of not less than
one year, and preferably not less than
three years. If we were financing an
industrial concern we would not for
one minute loan long time money to
it unless it showed record of earn
lngs for not less than three years and
preferably for a period of not less
than ten years."
The firms of Pearson Il Taft of Chi
cago; the National City Bank OF Chi
cago and others recommend that tine
state make more thorough invest.ga
ton of proposed projects. All data
should be at hand and incontroverti-
Bile. Halsey & Co. of Chicago sug-
gests:
I'm general way the quickest thing
to bring this about would be to have
the development take place with the
help of the states. This would be
best in the form of some kind of
state subsidy or guarantee, such as
was given to the railroads in the early
days"
The firm of Stone & Webster, of
Boston, offers the following with ref
erence to all investments in industrial
securities generally:
"A company should not be prevent
ed by law or regulation from earning
Z liberal return on its investment,
where the investment has been made
with good Judgment and the property
Is being managed carefully and eco
nomicatly. There can be no incentive
to the development of such properties
II investors are expected to stand all
losses, and when properties are sue
cessful rates are to be reduced |
through public regulation to a point
which yields only bare interest re-
turn on the company's investment"
Some ChanReis Made.
The Continental & Commercial
Trust & Savings Bank Of Chicago,
sfirst. That something should be
done to encourage and keep up the
markets for lands that are put under
water.
Second. That some change be
made in the manner in which the land
is sold and the settler is financed for
a period of FIVE or six years and
Third. That bonds should not be
sold to the public until the irrigation
projects are completed and land sold"
The Chicago Title & Trust Co.
sums up and suggests as follows:
Reduced to a minimum, my state
ment amounts to this: That unless
the investors in western securities are
given better assurance of repayment
of their loans than now exists, your
state will find it difficult, uneconomi-
cal and wasteful to obtain money nee
essary for its proper development,