The weekly times-record. (Valley City, N.D.) 1912-1922, 1921-12-01
WHAT WAS THE INCENTIVE?

WHAT WAS THE INCENTIVE?
Premiums of from $3.50 to $4.35 are
being paid for South Dakota's 5 1-2
percent bonds.
Yet the last important act of the
retiring industrial commission was to
contract for the sale of $11 SOC, 900 OF
North Dakota's 6 per cent bonds at
par.
Why did they do it?
The North Da kota bonds are much
better investment than the South Da-
kota securities. We have a bigger
population and bigger assessed val
uation. We have no bonded indebt-
edness worth mentioning, while South
Dakota already has a bonded indebt-
edness of $53,O00,OOO. The North Da-
kota bonds pay per cent. The South
Dakota bonds pay S IL percent.
The Guaranty Trust company OF
New York is offering the South Dako-
ia bonds at prices ranging from
$1O2.50 to $104.35, depending on the
date of maturity, and is selling them
at that figure. On that basis the
North Dakota bonds should command
premium of frim SIS to SO.
Anu Cllcy WclC SOlQ dC pal HUI lSu-
ly, secretly and at the last minute.
Why?
What was the incentive for the old
industrial commission to make such a
contract?
The incentive of the purchasers is
plain. They stood to make very
comfortable fortune Out Of North Da-
kota bonds at par. They had profits
of hundreds of thousands of dollars in
sight. They could we'll afford to tear
up an old contract which was likely
to be held invalid anyway, and accept
new contract virtually as good from
their standpoint the increased
interest rate almost offset the dis
count-which would be valid. So their
incentive is plain.
But thousands Of voters in North
Dakota have perfectly natural cur
iosity regarding the incentive of the
former industrial commission.
Why were they willing to make
such a contract on behalf Of the state :?
Why should they concern them
selves about the sale Of bonds when
they were going out of office the next
day?
Why should they take steps to pro-
vide their successors in office with
millions of dollars in cash?
Why should they make the new deal
so hurriedly, so secretly and at the
eleventh hour?
What was the incentive?
Surely it wasn't an unselfsh motive:
or a desire to benefit the state. They
knew that the new commissioners
could sell the bonds just as readily as
they could. They knew that if Spit
zer- Rorick offered par for 6 percent
bonds, it might be quite possible to
get premium if the bonds were ad-
vertised for bids in the open market.
Or they might have been sold at par
with an interest rate at low as IA
So the state couldn't benefit.
The kindest Interpretation that can
be placed upon the act is that it was
done to insure the sale of bonds at an
interest rate that would make it i'm
possible for the new commission to re-
duce the rate on farm loans below the
figure charged by the old commission
If the bonds had been sold on the IA
per cent basis, which there was every
reason to expect: it would have been
possible for the new state officers to
make farm loans at lower rate OF in
terest than the state has charged on
the loans already made. But rather
than give the farmers the advantage
of this lower rate of interest, the re-
firing officials deliberately increased
the interest rate on the bonds and hur-
riedly and secretly sold them the
night before they relinquished office
This display of friendliness to the
Spitzer-Rorick company is worthy OF
investigation. The voters are entitled
to know why the old retiring officials
were so eager to protect the interests
Of the Toledo bond house.
Also prompt steps should be taken