Capital journal. (Salem, Or.) 1919-1980, 1920-12-29
Hoff In Favor
OF Buying City
Bonds Direct

Purchase >of bonds by the state
direct. from the issuing municipal
ity is favored by State Treasurer
Hoff when such a procedure is
practicable. According to a state
ment issued by the treasurer this
policy has been pursued by the
department for the past six months
during which time school district
bonds, port bonds and state certi-
ficates of Indebtedness aggregating
approximately $230,000 have been
purchased direct by the treasurers
office from the issuing agency, at
a saving to the state through the
elimination Of the brokers commits
sion.
While State Treasurer Hoff fav-
ors the plan and his department is
following out the idea to, a large
extent and at every opportunity Of
fered Hoff declares that there are
some objections to the plan of en-
tirely eliminating bond houses from
consideration in the purchase of
bonds and would have the matter
brought before the state bond COM
mission, the creation of which he
is recommending to the forthcom-
ing legislature, for definite deter
Admitting that a material saving
can be effected through the elm
nation of the brokers commissions
which amount to approximately 81
per cent of bond purchases, Hoff |
cites several objections that might |
be raised to the proposal as a gen.
eral and arbitrary policy of the de-
partment. Among these is the ne
cessity for the maintenance of a
specialized and highly developed
bond department with it's purchas-
ing, valuation and office ends
Again, Hoff points out, state funds
are often available for investment
at times when there are no muni-
cipalities offering bonds for sale.
Such a contingency, 1t is pointed |
out, would necessitate large sums
of money lying on deposit in banks |
drawing interest at the rate of 2 i
per cent for several months at
time when it should be invested in |
bonds drawing interest at the rate
of 5 u to 6 per cent.
Under the present policy of the
state treasury department, Hoff
points out, bond houses offering
bonds for sale to the state are re
quired~to present with the bonds
showing the amount paid |
by the bond house to the issuing
and the department |
limits the commission allowed to |
the broker for the resale of the is
sue to 5 per cent gross from which |
the broker must cover all overhead |
expenses incident to the resale of
the bonds.
AS counter proposal in the |
event direct purchases of municipal |
securities is found to be not feas-
ble offers the suggestion that the |
investment of state funds be placed |
On competitive basis, the bond
houses being notified when the
state has funds to invest and bids
being received for the sale of bonds
% the state as bids are now re-
,eived for the purchase of bonds
when the state has securities for
'ale.
During the past six months bond
made by the state treas
Try department have aggregated
IS As, 6,599.64. OF this amount bonds
ind other securities aggregating
has been purchased di-
'ect from the issuing agency. OF
his latter amount S157,638.SO rep
'esents state certificates of indebt-
'dness which have been taken unI|
With funds of the state industrial
Lccident commission. other mu-
licipal bonds purchased direct by H
he treasurer's office during this
ime are: Grant county school dis
rict 30, $3.50; Tillamook county, Il
chool district %, $4,000; Umat...-
county, school district 81, $4,000;
Port of Coos Bay, $4,000; Crook
county, school district 32, $4,000;
'arious county warrants aggregate
ng $15.566.65.
JOURNAL WANT ADS PAY
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