The Kennewick courier-reporter. [volume] (Kennewick, Wash.) 1914-1938, 1936-03-05
R.EFINANCING.
SAVES G.. D. A
HALF MILLION
Closing of RFC Loan Marks
Most Important Move In
Community's History; Now
on Sound Basis

a reduction of Indebtedness from
I, 100000 to 1856, 760 and fifty per
cont extension of the repayment Pc
r,od is the net result of the refinanc-
ing of the Columbia Irrigation Dis
trict.
This important adjustment in the
economic set-up in this community
became an actuality this week when
Attorney M. M. Moulton and Sec
retary Frank Maupin Of the Column
bia district received on Monday let
tiers from the Drainage, Levee and
irrigation Division of the Recon-
struction Finance Corporation au-
thorizing actual disbursement OF
the loan with which the district Will
take I'D it's outstanding bonds. The
letters are in the form of instruc-
. tons to the Spokane branch OF the
Federal Reserve bank where the
money will actually be paid out, and
to the Depository, the bond holders
committee, the county treasurer,
who is ex-officio treasurer of the
district. and to the Columbia Dis
trict itself. When these instructions
have been complied with, officers OF
each of the parties concerned WILL
be called to the Federal Reserve
Bank branch where the transaction
will be completed. ~..-~ --..- =. -.
Columbia Irrigation District was
Organized in 1918 to take over the
canals and properties of the old
Northern Pacific Irrigation company
which was rapidly going bankrupt
trying to operate canal system,
delivering water to the lands now
included in the Columbia Irrigation
District. This step was taken by
the land owners as a sheed necess-
ity as the canal system was in such
condition that service could not be
maintained.
It was obvious that the first du-
ty of the district was to reconstruct
the entire system so that the farms
could receive the increased amount
Of water required to properly pro-
duce crop and to maintain. more
satisfactory service.
For this reconstruction and en-
largement the district issued and
sold $500, 10000 worth of bonds and
over 100000 in maintenance war
rants, the bonds paying interest at
SIX per cent and the warrants pay
ing eight per cent. The bonds were
2o-year bonds and made the total
obligation Of the district, including
principal and interest 1t would pay
IN this period approximately ST.
100000.
Interest was paid at the rate of
$4,000 per year for the first nine
years of this period, and the first
default occurred. In the meantime
It appeared obvious to the officers
of the district that this obligation
could never be met according to
its terms. Negotiations followed
under which the bond holders were
induced to make a cut in interest
rates and extend the time to q 80
year period beginning in 1881. In
1882 farm income practically dis
appeared, and 1t Immediately be-
came the obligation of the district
to make even further adjustment, as
the total interest and principal OBJ
legation under this plan amounted
to $785, 900.
August 81, 1893, the district filed
its application with the Recon-
struction Finance Corporation for
q loan to buy up its outstanding
bonds at a substantial discount.
After much delay and after two of
the districts officials made trips to
the RFC headquarters in Washing
ton, DC, the loan was granted in
an amount satisfactory to the bond
holders: More delays were encoun-
tered, and in March 1885 the RFC
requested the district to obtain new
depositary agreements from all the
bond holders. - -, e.. -.
These bond holders were widely
scattered, some in Norway, New
Zealand, Canal Zone and over most
OF the United States. AT this point
the Northern Pacific Railway COM
pany offered the facilities Of the
company and the services Of W.. p.
Stapleton, Western Agricultural De-
velopment agent, to aid in securing
these new depositary agreements.
Mr.. Stapleton devoted his entire
time to this work for most Of the
summer of 1895, travelling over the
entire Northwest and to California,
making many trips to certain bond
holders to induce them to poin in
this plan. Mr.. Stapleton's services,
his clerical work, communication
and travel were all furnished OBJ
solutely free to the district. 3
In December, 1885, Mr.. Stapleton
had obtained sufficient depositary
agreements to meet the minimum
requirements of the RFC, and steps
were taken to close the loan. Mr..
Moulton was again sent to Washing
ton, d. c., in February to confer
with the RFC officials and clear up
certain troublesome details and was