The Washburn leader. [volume] (Washburn, McLean County, N.D.) 1890-1986, 1919-09-19
I.Y.A.STATEMENTSH0V
INVESTORS LOST HEAV-
lily ON BOND BUYING.

Al' Ao VIM hVOl AIulA
lily ON BOND Buying.
A statement calling the attention of
the people of North Dakota to the
danger of buying Townleyzed state
bonds to establish industrial enter
prises was issued today at state head
quarters in Fargo of the IndeDendeut
Voters association.
The statement. which recitns that
ii states have repudiated bonds total
ling $50, 900 900, issued to start in
dustrial enterprises. follows in full:
In several issues of The Indcpcnd-
ent, the official organ of the Independ-
'n' Voters association, i was pointed
out before the referendum election
last June that many states had engag-
ed in the banking business, and had
lost heavily as result This data
was carefully compiled and was never
disputed by the leaders of the Non
p1iti1ai ieaEuc we nave no" cOIu-
piled similar data on the reputation
of bonds and guarantees in various
states that have engaged in business
enterprises other than banking. The
data is composed Of indsputable facts,
which people who are half in the
notion OF buying bonds will do well
to take notice of if they do not want
to lose money. The data shows that
II states have repudiated bonds ag-
gregating more than S15OOOO,OOO
that represented total loss to the in
vestors:
These bonds were issued for var
ious enterprises in which the states
became interested, such as the con-
struction Of canals, the construction Of
railroads, banks or stock in banks,
roads or highways. etc. In some
cases the state underworld life in
surance notes or bills of exchange, as
was the case with the Southern Life
Insurance and Trust company, incor-
porated in the territory of Florida on
Feb, 4, 1885. The territory guaran-
teed certificates to the amount Of $4OO,
900. This was a total loss, and the
obligation of the territory was repudi-
ated
The history of the State of Min
nesota is interesting in this connec-
,tion..AIt.goes back to 1858, when the
constitution of the. state was amended
so as to permit bonds of state to be
issued in the sum of S2,275,0OO. The
ed. The question of paying these
bonds was before the Legislature in the
in the State Of Minnesota, and before
the people of the state. unil 1881, when
the matter was finally settled But
the state settled with the bondhold-
ers by repudiating 50 per cent of the
bonds. That is to say, an individual
who bought or held $1,000 of the state
bonds finally received $500.
'The State Of Michigan in 1897
authorized bond issue OF $5.O0O,OOO
for public Improvement Bonds to
the amount Of S1,362 900 were sold and
the money paid into the state treas
ury. BY 1912 bonds had been sold to
the amount Of S1,387 900. The money
was expended foolishly and with no
benefit to the state, with
the result that the state paid these
bonds at the rate of little more than
80 cents on the dollar Thus, many
individuals who had bought these
bonds from the broker who sold them
for the state lost more than two
thirds Of their investment.
Bonds Are Repudiated
at is necessary 10 roint out that
the bonds repudiated by the southern
states were not bonds issued during
the Civil war. but were bonds issued
prior thereto i'll support Of various
industrial enterprises. as mentioned
above. Virginia repudiated over
SIS 100000 in bonds, North Carolina
over S26,0O0,000, Louisiana over s27,
)00,0 900, Arkansas over $4,000, 900,
and Tennessee over Sl6O00,O00. Any
body who wants to verify the above
statement as to the State of Min
nesota, which is not southern state
,an consult the laws of Minnesota, ex-
:ra session 1881. page l.
"One Of the worst features about
= these bond issues
hat they caused and kept the state
n violent agitation for more than
quarter of century. to. the exclu
sion and clouding of other issues, IL
inois and other states lost millions
# dollars because of bond issues for
'arious individual enterprises, but
hey did not repudiate these obliga-
Joins. They were eventually paid.
This confirms the contention all
lave made to; the effect that indus
Al