Imperial Valley press., 1933-01-09

In our article on last Saturday
we attempted to give you, in a few
words. the background or necessity
for the refunding plan which will
be voted upon next Thursday. To-
day we will discuss the plan itself.
The same condition that makes
refunding in Imperial Irrigation
District necessary has made and
is making refunding necessary all
over the country and indeed all
over the world. 1t is no reflection
upon the integrity or stability of
the community. 1t is an economic
condition over which no individ-
ual or group of individuals has had
any control.
Even before the district made
any default last July the board of
directors took the matter up in
vigorous manner to prevent a col
lapse. After a vast amount OF
background work had been done
a conference was called in Los An
geles between the bondholders
committee, Harmon S. Bonte, exc
cutive secretary of the California
Districts Securities Commission.
financial institutions, and the
board, about the first Of last Dec
ember for the purpose of actually
working out a definite plan based
upon the facts that had been ac-
cumulated.
That conference continued day
after day. Plan after plan was
suggested and discarded.
It must be kept in mind that
there are two parties to the con-
tract. One is the district; the
other is the individual holder Of
the district bonds.
The plan contemplates the ex-
change of the old bonds for new
ones. 1t is therefore obvious that
no plan can be devised, with any
hope of success. that is not reason
ably fair to both the district and
the bondholder. The bondholder
committee as we'll as the board
recognized this cardinal fact.
Plan Must Be Equitable
It would be an idle act to vote
bonds simply to find that the plan
was SO inequitable to the bond
holder that he would not make the
exchange; it would also be an idle
act &c set up a plan that is so in
equitable to the district that the
district would and should not ap-
prove it. You will either approve
or reject the plan on the part OF
the district by your vote on next
Thursday, January II. The indi-
vidual bondholders throughout the
country-more than 5000 of them
will have to be individually con-
tacted by letter or in person. That
work will be undertaken by the
bondholders committee.
We have outstanding unmatured
bonds in the principal amount of
s14. 100000 These are what are
known as serial bonds which SIM
ply means that the total bond is
sues are divided into annual series.
one series maturing each year. and
the amount required to meet the
annual payment raised for that
year and paid. That was the only
form of bonds authorized by law
at the time they were issued. Now
it is planned to issue exactly the
same amount-s14.250,0 ,000-sinking
fund bonds, and exchange them.
bond for bond, for the present
outstanding serial bonds. There is
no new obligation at all. but the
new bonds will simply be traded
for the old and the old ones can
celled and destroyed.
There are s350,000 maturing
next July. 1t is proposed that this
maturity be postponed to 1899.
There are 100000 maturing july
1884. 1t is proposed that this
maturity be postponed to 1912. All
of the balance of the bonds will
mature at the same time in 1888,
or so years from now. No sinking
fund requirements, except for the
| two maturities of '39 and AZ re-
spectively, and portion of the
registered warrants. will be made
until 1912, and beginning with