The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-12-14
B0NDSALE IS :.
DEFENDEDBY
GOV. NEST0S
Declares That Last Bonds Of
fered Went to Bidder Low
est by Several Thousand

series bonds recently sold by the In
dustrial Commission went to the
bidder who was lowest by $4,94O, this
bid was 100000 better than the high
est bid of any North Dakota bidder,
sealed bids were presented and OPP
ened in the presence of all bidders,
and no bids were changed, Governor
Nestos declared today in answering
attacks made in John Andrews PRO
gressive' on the bond sale. Shown
the Andres article, Governor Nestos
Immediately pointed out what he
said were numerous mis- statements
Of fact and obviously false conclu-
sions and insinuations." Asked for
a statement of the situation, the Gov
ernOr said:
"The Industrial Commission has
the power to sell the bonds either
by private arrangement with kond
house or by competitive bids. The
former administration apparently
favored the first described proce-
dure, but the present administration
has acted on the assumption that bet
ter results would be obtained for the
state by selling these bonds to the
best bidder, although either course
has it's advantages.
"The procedure has been the same
at each sale. At the hour set for the
sale, blanks have been distributed,
information given, and questions an
swered, and the adjournment then
taken until later in the day to permit
the bidders to prepare their bids.
Exactly the same procedure was fol-
lowed at this sale. The bids were
asked for and received with the un-
Outstanding that the Industrial Com
mission reserved the right to reject
any or all bids, or to accept whatever
bid seemed to be the best and would
result in the lowest rate Of interest
for the state. At this time, as on
former occasions when there were
many bidders, all came into my Of
flee where the Industrial Commission
and it's secretary We're seated and
each bidder had his sealed bid in his
own possession. In the presence of
these men, all the bids were then re-
ceived by the Industrial Commission
and were opened and recorded before
dinner in the presence of all of these
bidders. Neither the governor nor
any Smember of the Industrial Com
mission or any of the bidders, there
fore, had any chance to discover what
any other bidder was going to bid
until these bids were opened in the
presence of the whole group. Any
fair minded man will admit that this
procedure is fair to all Of them.
Two Basis
AT the last sale, bids could be
made either on Ia per cent bonds
or on per cent bonds, and as the
average maturity of these bonds was
about eighteen years. any bond man
or banker will be able to tell you
that premium of over $4,000 would
have to be paid on the Id per cent
bonds in order to make them equival-
ent to per cent bonds at par.
"There were bids on both classes
T of bonds and some on combinations
of them. The best bid received on
the 5 Ia per cent bonds was from
the Minneapolis group, Offering
premium of $4,000 which is over
$21 900 poorer bid than par for 5 per
cent bonds. Two bids received offer
ed premium on S per cent bonds.
Both of these bids were considerably
higher than any of the other bids.
One Of them was submitted by the
so-called Minneapolis group Of
houses, the other one by z. M. Grant
e. Company of New York and Chi
cago. Each one of these bids was an
outright bid for a part of the. bonds,
with short option on the balance,
and they were the best bids even
with the option. There was no
change made or permitted in either,
Of these bids during the noon recess,
as charged in the Andrews article,
Both of these bidders merely notified
the Industrial Commission that they
would exercise their option immed-
lately instead of waiting until the
expiration Of the time limit.
"The Minneapolis group of houses
offered us premium of $500 on
the per cent bonds, and r. M. Grant
& Company premium of $10,440 on!
the same bonds so that it was appar-i
ent to the Industrial Commission that
r. M. Grant & Company's bid was
better than their nearest competitor
by $4,94O and was more than 100000
better than the bid of the highest
North Dakota bidder.
"How, under these circumstances,
it can be charged that any favoritism
was shown r. M. Grant & Company,
is difficult to see even though the
son of my secretary happens to be
one of the agents of the company
making the best bid. He certainly
should not be condemned in urging
his company to give North Dakota a
good bid but should rather be prais-
ed for it. If there had been any dis
position to show them any favorit-
ism, the Industrial Commission
would not have needed to ask for any
bids at all, but might have given
them the contract to sell all our
bonds as the former administration
did to Splitter Rorick & Company.
and even if that were done l can as
sure you that we would have received
much better rate of interest for
the state than did the former ad.
ministration. To show how silly the
contention of John Andrews is, on
~ need to call your attention to the,
fact that r. M. Grant and Company
has been bidder at every sale but
one but that at sales prior to this
fall they have not been the lowest
bidders and therefore did not get.
TIA hnnds and on ralu uhan fha,,l ara