The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1916-02-09
PLAN TO REFUND
THE STATE DEBT
SINKING FUND BOARD WILL
OPEN BIDS FOR $5,O00,OO0
WORTH OF BONDS.

the sinking fund commission. Inc
commission yesterday decided to in
sert an advertisement for bids which
will be opened February 16.
The new bonds will be issued in
place of the brown consols and will
bear per cent. less than the State
is now paying. 1t is estimated that
the State will save about 100000 to
$4,000 a year by the transaction.
The bonds are to be sold for not less
than par.
Under the refunding act passed in
1912, no provision is made for ex-
empting from taxation that part of
a banks investment in the new bonds.
The brown consols are exempt from
taxation.
When Gov. Manning was in New
York he was informed by bankers
that it would be impossible to refund
the South Carolina bonds at a per
cent. Tennessee and several other
States, it was pointed out, had to pay
more than a per cent, for refunding
their bonds. Gov. Manning has had
the matter under consideration for
some time and has been in CORES
pondence with prospective investors.
Several days ago an investment
concern in the North made an offer
for the new bonds. The firm offer
ed to pay par and allowed a per
cent. interest. The firm stipulated
that their offer must be kept private.
Gov. Manning called the members
of the sinking fund commission to-
gether. He told the commission that
he would not agree to make any pri-
vate award but would consent to a
sale of the bonds after bids had been
called for by proper advertisements.
A majority of the members agreed
to this and at the meeting yesterday
the commission decided to issue the
call for bids.
A committee composed of Gov.
Manning, S. T. Carter, State treasur-
er, and Carlton w. Sawyer, comp
troller general, was appointed to pre-
pare the advertisement and have it
inserted in the proper papers.
Members of the commission esti-
mate that South Carolina banks hold
about $1,5O0,000 of the brown con-
sol bonds. These investments are
exempted from taxation. The new
bonds will be placed on the tax books
and the State will realize about $685.
900 year.
Following the passage of the bond
refunding act in 1912, a test case
was brought in the supreme court.
The act was held to be constitutional.
The brown consol bonds were issued
in 1892 for 40 years with the option
of the State to call them in after 20
years. In 1912 the State had the
right to call in the bonds, with the
result that the refunding act was
passed. About seven-eighths of the
States debt is in the brown consol
bonds.
The new bonds to be issued will
run for 40 years and will become op-
tional at the end of 20 years. The
bonds will be sinking fund bonds and
will be issued in denominations of
$500 and $1,000 or multiples thereof
The following is section of the
minutes of the meeting of the sink
ing fund commission at which it was
decided to call for bids on the new
bonds:
after a thorough discussion of the
matter Mr.. Carter made the follow
ing motion:
81 move that the chairman ap-
point a committee of three, of
which the chairman shall be one to
advertise for and receive bids for the
sale of the bonds under the act of
1912, up to noon February 16, 1916,
the bids so received to be presented
to the commission for consideration.
"On this motion the. vote was as
follows:
From the motion of Mr.. Carter:
Gov. Manning, Mr.. Carter, Mr.. Lilies
and Mr.. Sawyer.
against the motion: Mr.. Peoples.
Mr.. Peoples gave as his reason for
voting as he did on this question the
following:
"T vote mo- for the reason that
this is a very vital question to the
taxpayers of the State, and for the
further reason of the present uncer-
tainty of the bond market; and fur
ther, that the time provided for in
this resolution is too short, not allow
ing sufficient time, in my opinion,
for competitive bids
Mr.. Sawyer gave the following rea-
son for his vote:
"I vote yea for the reason that l
conceive it to be the best interest of
the taxpayers of South Carolina
'Gov. Manning gave as his reason
for his position on this matter the
following statement:
81 am unalterably opposed to any
private sale of these bonds. I believe
that the present is favorable time
to offer the bonds for sale and that
if we can refund the State debt un-
der the act of 1912 it will mean the