The herald and news. [volume] (Newberry S.C.) 1903-1937, 1914-02-06

its argument in relation to the subject
in hand:
charleston, S. c., February ,, 1912.
Dear Sir: Referring to my conver-
sation over the telephone in relation
to the bill for refunding the Brown
Consol debt of the State, I write as
follows:
"A very large portion of the Brown
Consol debt of the State is held by
the banks Of this city, and I presume
much of it is held by other banks
throughout the State. This security
has been much sought after by money
ed institutions, especially banks, on
account of the provisions of the act un-
der which these securities were issued,
because of the nontaXable features
therein contained. Consequently this
created demand for the bonds which
largely increased their market value.
In refunding the present debt, the
more attractive the securities are made
to investors, t1e higher price at which
the State will be able to float them.
"On December "a. 1889 Vol 20 ST.,
page $500, the act for redemption Of
that part of the State debt known as
the Brown Consol bonds and stock
was approved Evidently with view
of making the proposed issue more
attractive, this act was amended by ad-
ding a section to be known as section
13, providing:
THAT so much of the capital stock
of any bank or banking association
or any other moneyed corporation
located within this State as is or shall
be invested in the bonds or stock, or
either of them, the issue of which is
provided for in said act, shall be ex-
empt from all State, county, township,
municipal, or other taxation This
act of 1889 was further amended by the
act of December "a, 1891 (Vol. 20 ST.,
page 1058), making sect; II 13 read as
follows:
THAT so much of the capital stock
or funds of any bank, banking asoccia-
ton or corporation of any nature or
kind, located within this State as is,
or shall be invested in the bonds or
stock, or either of them, the issue of
which is provided for in said act, shall
be exempt from all State, county town.
snip, municipal, or other taxation
l observe that the provision Of this
/ section 13 have been omitted from the
bill now proposed, and | suggest taat
these same provisions be incorporated
in the proposed bill, which could be
done by adding the same to section II.
My reason are as follows:
'fFirst. Because in MY judgment
this provision had much to do with
giving the present Brown Consol sec
urities the market value wich they
have commanded, and if incorporated
in the present bill will have the effect
of enabling the State to float the pres
ent securities at a higher price than
if left out.
Second. Because if this provision
be omitted it may be difficult to float
the bonds at par, whereas if put in
they could be readily foated at par.
Third. Because this has been illus
trated by the fact that the city Of New
Yory attempted to float an issue of 4
per cent. bonds, but could not do it,
and were obliged to issue a AZ per
cent bond.
Fourth. In further illustration
the city of Charleston per cent. bonds
issued for refunding purpose which
contained this provision are sold even
now in extremely stringent money
market at about six points higher than
other per cent. bonds which do not
contain such provision.
Fifth. Unless this provision is in
serted the banks which hold near one
third of the issue would have no rea-
son to exchange or purchase, particu-
Iarly since they have no difficulty in
lending money readily at Z per cent,
and in some instances at a higher fig