Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-11-05

made:
All the remaining bonds Of the bank series two
million dollars issue have been sold to a syndicate Of
eastern bond buyers. The bonds bear five pr cent
ana have been sold atpar without the payment Of any
commission whatever. When it became apparent that
a better than par bid on the bonds could not be re-
cetved and that It was desirable to change the m.tu.
rides Of the bonds. It became evident that the bonds
should be reprinted and should bear / now date. An
agreement waA made with the bond purchasers
whereby the bonds should be dated November 1, 1919;
instead Of July 1. 1914. thereby effsctinr q saving Of
four month"; interest on the bonds, in the amount of
$ss,a3a.2s. The only additional expense to be incur
red is for the reprintinE Of the bonds, which small
nominal expense will insure the state Z profit Of about
$4,000 which is equivalent to a premium of about
one and ~two-thirds per cent on the bonds Is originally
dated.
In another paragraph Of the bulletin relating to rhs
banks operations We are given a list OF things which IT il
said that the bank has demonstrated. Among these are
enas II can attract and hold large deposits, lower interest
rates. and 70 forth, that it can market its bonds at a pre-
mium without paying any commission charges or expenses
therefor and that it can do all these things in tho face
OF violent opposition on and in the face Of q mass Of false
publicity"
Is 1t too much to ask the director general Of the states
Largest financial institution for a single grain Of truth,
SNSS S"S AN@eASC TUuAO, IN MS Official statements relating tn
the most important transactions OF that institution?
The bonds TO which Mr.. Cathro refers were not sold.
as he says they were. They were not sold at all. They
have not been sold since. There is no prcsent nro.n.c =.
their being sold. The state assented to an axreement
whereby it was bound to deliver these bonds to the east
en concern at a stated price, provided the eastern house.
on looking the bonds over. thought we'll of them and wish
co 'otake them. That was the substance Of the contract,
Inc state was bound, but the bond house was not. Since
then the bond house. acting strictly under the terms of
the contract, with which Mr.. Cathro was presumably Ia
miliar, declined. to accept the bonds, and the deal is OF.
me state has It's bonds, and the bond house has its money.
The practice Of making a bid conditional on evidenc.
OF legality OF q bond issue is an old and familiar one. 1t
has been employed on many occasions merely for the pur-
pese Of establishing an option without expense to the bid
der. under which option he could peddle the bonds to
other purchasers, II advantageous sales could be made
the bonds would be accepted: But if the market proved
dull the company could easily obtain from attorneys Of the
class which it employed an opinion to the effect that the
issue was illegal. To prevent ths practice public bodies
having bonds for sale have often included in their adver-
themselves as to legality before bidding. If this method
possibly there might have been no bids, but such bids ..
there we're would have stuck, and the state would not have
been left mp in the air n it is now.
Mr.. Cathros description Of how the bank=-vhich is
to say. the state-made = profit Of $4,000 by the simple
device of having a new set Of bonds printed, with tn. date
Of issue postponed four months, causes one to wonder Why
= still greater profit va. not made by postponin:g the date
till further. The industrious application Of this principle
ought to yield. the state millions, and to relieve US s. the
necessity Of paying any taxes whatever.
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