The Chronicle-star combined with the Moss Point advertiser., 1949-11-18


the sale, to sign the Trust In
denture unless it was amended
so that he, Herring, as Trustee.
would have the exclusive right
TO select repositories for all port
funds, regardless of the law or
the City Ordinance naming the
repositories. He also knows that
the sale failed and that two days
later w. b. Herring wrote a let
ter to the Board of Supervisors
and 20 the City saying that if the
Trust lndenture was amended, as
he had demanded, that he would
execute the Trust IndentlIre and
that the prospective bond pur-
chasers would accept The bonds
and he knows that no mention
was made Of exempting anybody
from the payment of the tax TO
service the bonds.
MIR. Kinayat knows that the
bonds were issued on the basis
of the contemplated sale at an
interest cost of approximately
2.83@o per annum and that the
bonds were printed and bore diff
fercnt interest rates at 2b %,
234% and SO. That these bonds,
the procedure issuing them, the
Trust Indenture and the resolu-
ton Of the Board OF Supervisors
pledging and dedieating the en-
tire two mill tax was submitted
to the Chancery Court and the
bonds were validated on the
strength of the procedure and of
this pledge by the Board of Sup
%erVisors.
Mr.. Khayat knows that the
bonds, when the sale could not
be made, were readvertised for
sale and that dittoed copies of
letters from w. b. Herring, Presi-
dent of his bank, directed TO the
Board of Supervisors and to the
City of Pascagoula, questioning
the constitutionaiity of the law
and threatening to bring suit if
the Board of Supervisors levied
the tax" or if the Tax Collector
sought to collect it, were distrib-
uted by United States mail in
envelopes of his bank to Security
Dealers throughout this. part of
the South. Mr.. Khayat further
knows that this distribution was
made to prevent Security Dealers
from bidding on the bonds so as
TO prevent the sale Of the bonds.
lie further knows that he was in
Jackson, Mississippi on Sunday
night and Monday, August 9th.
the day before the sale on Aug
ust 9Th, either as an individual.
a member of the Board of Super
visors or assistant vice-president
of his bank, and on August 9th
he called on Security Dealers
in Jackson, Mississippi, and dis
cussed the bond sale with them,
and was told that they could see
no reason for them not bidding
for the bonds.
Mr.. Khayat knows that the
campaign was successful in pre-
venting a number of Security
Dealers from filing bids on the
bonds, including the dealers who
had bid 2.t8& for them in April,
l949 and who had assured the
City, IN writing, that if the bonds
were re-sold they would file bid
therefor.
MI. Khayat knows that in spite
OF this campaign a group of Sc
curity Dealers came in an sub
mitted a bona fide bid on these
bonds and offered to take them
on the basis of 5000 per annum
and that the bonds were sold on
this basis. He knows that the
bonds might have been reprinted
and re-validated to show inter-
est rate that would average 3.2%
in the face Of the bonds; but that
the bonds already printed at con-
siderable cost, We're delivered at
q discount of Sl1+000.00 and that
the money borrowed was at the
rate Of 3.2% and not at the aver
age rate Of 2.98% as printed in
the bonds If Mr.. Khayat can con-
clude that the Pascagoula bonds
were sold at d loss by baspg it
on a former bid, he can also make
It clear that this loss resulted from
his own acts and those of Mr..
Herring. He also knows that q
month later the City of Gulfport
offered for sale similar port
bonds and that because of this
campaign and the attack on the
constitutionality of the port laws
that the best bid received at Gulf
port was on q basis Of 3.48%.
v. Mr.. Khayat claims that a
precedent has been set for with
Holding an authorization Of a
collection Of a levy TO service
these bonds. He refers to County
lndustrlal Bonds of 1899 in which
an ad valorem tax was not levied
for a number of years because the
bonds were being paid from the
residue OF the toll bridge fund.
Mr.. Khayat knows that this is
not q precedent by any stretch
Of the Imagination; that the Coun-
ty Industrial Bonds were full
faith and credit bonds and that
the Board of Supervisors pledged,
in the issuance of said bonds, the
full faith, credit and resources of
the Districts and irrevocabIy
pledged that the Board would an
nualiy levy a tax on Fall of the
taxable property sufficient to
pay the principal and the interest
on said bonds as the same shall
mature and accrue. He knows that
the tax levy was placed on home
steads as being a part of Fall of
the taxable property" He knows
that under that obligation Of the
County the County can levy no
tax if It has sufficient money to
service the bonds. can levy diff