Arizona republican., 1914-05-21
Selling Bonds Across the Counter"


counter" is likely to result from an experiment
lately tried with by the of
Massachusetts, 1t is unlikely that bond syndicates
will ever again handle Bay State bonds in the way
of speculative enterprise for it has been demon
strated that can handle them expe-
dously and with better results itself. A way OF
eliminating the middeman in bond deals has been
discovered 1t is probably the first time that
bonds have been sold across the counter but il
is the first time that a municipality has
had believe that this way of disposing OF
its securities might we'll be adopted as policy.
When State Treasurer Mansfield d candidate
for that office he made this method of handling
state bonds of his campaign but he
not taken seriously by the bond buyers Candidates
always have issues which vanish into thin air
election night Not long after MI. Mansfield came
into office he caused an advertisement o be
in the usual manner for the sale of ten issues of
state bonds aggregating s63250 900 The bond buyers
were now Mr. Mansfied's campaign pledge
had gone into the discard. Many of the leading
bond houses submitted bids varying according
the character of the bonds. The highest bid
l04279 and interest, tthe bonds being per cent?
This gave premium all the issues of s210.646.75
on which basis the bonds would the pur-
ehasers $3.50 per cent.
This bid had been made by a syndicate of the
leading buyers. They surprised by
nouncement that all the bids had been rejected and
that the treasurer had adopted the top bid as the
basis which he would sell the bonds across the
counter the public. Mr. Mansfield
preached by the syndicate and charged with
acting in bad faith in inviting bids which he had
intention of accepting. He replied that he had in
vited bids only because the Law required him to do
So He had urged nobody submit bids but he had
to have bids reject before he could offer
to the public
The announcement that Mr.. Mansfield had bonds
to sell in lots to suit purchasers brought immediate
results They could be bought in amounts of 800
or in large multiples Of that In the first two
hours the official sale the transactions aggrega
ed 100000 By Of the next day they had
grown to s3,7OO,000. Within month the whole
amount had been disposed of. All the issues
over subscribed
The number of purchasers 399. The prices
varied according the character of the bonds but
they were all arranged the basis Of a return of
1856 per cent to purchasers. The premiums
amounted to s27l,O55.46 s4OS more than the bond
syndicate had offered. Deposits of , per OF
the amounts applied had been required and the
interest on these deposits amounted to s4s All this
reduced the added of this method of selling to
an excess of only s13 above the plan of selling
through the bond buyers.
This interesting fact brought out: ten
months before the bond buyers had taken Massa-
chusetts state bonds the of 100000 and
had some them hand yet. The state had di-
recty sold in less than month bonds amounting
to more than 100000 to 500 individuals. 10
ings banks "a trust anies, II bond houses and
II national banks
TThis experiment suggests the advantage of re-
pealing the law requiring that the bonds must be
advertised so they may in the first instance be
offered directly the public saving an expense
which in this case amounted to more than 5000
and involving delay of month in the sale