The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1919-07-18
WHY THE BANKERS
HOWL ABOUT THE
SERIAL BONDS
Continued from rage Ore,

Continued from page one)
less 94f,ooO interest at the rate of pa
per cent paid by the hank for tn
SINKING fund money as it accumulate
500. " 'o'ai cost OF Sloz'
The difference between so,;o
oono and 20 year bond is this: thu
y raised for sinking funds, t.
pay the bonds at the end of 20 wear:
In the case of straight 20 wear
Dono, instead of being deposited il
Inc local banks at 21a per cent in.
IeresI, IN sums of $4,000 per wear
anu laying In the local bank from
one year to 10 years, IS paid cash
eacn year, in case of the serial bond
10 the bond holders, thus reducing the
Indebtedness each year lust that
amount, and at the same time ston-
ing the interest which accounts for
'iie SAVING from year to year.
NOW the cost of the serial sc bond,
over which there has been such a con-
troVersy, is $152,O0O: or to be more
10. the point, the life of the serial
POND Will only average, 12 2-3 wears
instead of 20 years as in the 20 wear
straight bond Therefore 12 2-3 times
9iz,OOO, or the interest on 100000
a' pc Tor one year equals 1852, 900.
Sl5z,5OO the cost of the 20 wear
straight B per cent bond, less the 21b
per cent interest paid by the local
banks on the sinking fund, less $751;
UOO-the cost of the serial go bond.
indicates In figures that don't lie, that
the per cent serial bond is $500
cheaper than the best figures for the
per cent, 2O-year straight; besides
the 2O-year serial bond is paid off
with an average yearly levy of $751;
uoo as against an average yearly
levy of 100000 on a twenty
year straight bond. Any taxpay-
er can see for himself that the posi-
ton taken on the bond issue from
the beginning is the correct position.
IN spite of the lying propaganda car
RED on by the Pioneer Press and its
friends.
A Table of Bond Bids
There is printed below an approx
mate table of costs to the taxpayers
OF the different bond propositions of
fered.
First National Bank bid 5.45 per
cent on 100000 of 20 years straight
bond. 100000 timess .O545 or $lO,-
9OO per year interest. 20 times
$4,000 or $218,000 for 20 years. |
S218,O0O less SAT, 500 paid by bonds |
for sinking fund deposits, leaves
$17O,5UU toJal cost to taxpayers for
j. w. McKee's offer, or $1,000, less
$4,000, or $18,500 more than the 6 /
per cent serial bond.
The First National Bank had two
bids; the second one was for a 51a |
per cent 70 year straight bond which |
would have cost the taxpayers as fol-
lows: 100000 times 512%o or Sill
900 per year interest. 20 years. |
times $1,000 or 100000; which
amount less 1880, paid by local
banks as interest on sinking funds at
212 per cent, equals $172,o00 total
cost, or $172,500 less $152,000 cost of
go serial, or $20,5O0 more than the
second proposition of the First Ma
tional Bank.
N. L. Nelson of the State Bank of
Plentywood offered proposition to
take half of the bonds at 5A per
cent 20-year bond and the other half
at 512 per cent 20-year bond with a
81 900 bonus, etc. This proposition
would have cost the taxpayers just
$216, 700, less 81 900 menus, or $215,-
700 gross, les the SAT 500 sinking OF
a total cost to taxpayers Of $167 800,
Which cost $167 800 less $4,000 or
$1,000 more than the go serial pro-
position offered to the county.
hon Iyci
bring restraining order to stop the
issue OF the serial go bonds?
They knew which bonds were the !
cheaper.
1t was because they wanted, just .
as the Producers News has shown, |
the sinking fund money to stay in
the bank at 212 per- cent,g so they '
could loan it back to the taxpayers at /
10 per cent and discount it three or
four times, making a huge sum of I
money out Of the proposition. 3
y Eacn bank having sinking fund
money will discount the same with +
the discount banks at least three times
each year or to be more plain, they
will take the notes received for the
sinking fund money, send them to e
the big city banks, get face value
Tor them, paying 5 per cent interest, "
and reloan the money again for 10 \
per cent, repeating this times, makes \
$50 per cent interest, less per cent,
two times and 21a per cent paid to F
the county once, or netting 1712 per
cent interest, on this money from l
to 10 years.
You can figure out what a bank h
ng game this is and why the banks Il
emp, Dyed expensive attorneys to fight n
,he per cent Serial bonds which d
out a kibosh on this, and why they
escorted to the tactics they did, in Ct
rider to try to discredlt the Pro- CT
ULCERS News and its editor.
The following table indicates the tc
ause OF the squeaI and what loss CO
he serial bond means to the bankers. BIZ
Read it and study it carefully.
The amount al
banks make Ell
from | F;
Raised for Raised for deposits ia
Sinking fund Interest at 213&o M