Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-11-29
Stanley Sets Talks
On Bond Difficulties
School Projects
Fail to Draw
Bids in Virginia
By MARY LOU WERNER

minent in. Fairfax County and
Alexandria, Gov. Stanley will
meet with the State Treasury
Board tomorrow to discuss the
difficulty Virginia localities are
having in the sale of school con-
Struction bonds.
Investors. possibly concerned
over the effect of Virginia's new
school legislation, have ignored
one school bond issue and Of
fered only one bid on another
in the State during the past two
weeks. Financial circles had
predicted earlier that fund cut
off bill passed by the special
General Assembly session to
withhold State funds from in
tegrated schools would have a
bad psychological effect on the
sale of school bonds.
The board, investment agent
of the board of trustees of the
State Retirement Fund, may ask
the Governors opinion about US
ing money from the fund to buy
school bonds when independent
investors fail to bid.
Fails to Draw Bids
The meeting was set after a
proposed 81 million school bond
issue for Hopewell failed to draw
a single bid. 1t was the second
proposed school bond issue
within two weeks which didn't
get past the bid-opening stage.
A South Norfolk bond proposal
for $4,000 failed when the
City Council rejected a single
bid for a net effective interest
rate of 4.99 per cent.
Fairfax County school officials
are frankly concerned about the
bond developments, with So
million in school bonds adver.
tised for bids December Is.
Postponed Sale
Originally, Fairfax had hoped
to sell the SO million issue last
month, but postponed the date
because the bond market looked
bad at the time. Faced with the
prospect of stopping new school
construction altogether If more
funds weren't available by the
first of the year, the school
board finally went ahead and set
the December 10 bid date.
Fairfax County hopes to sell
another So million block of
school bonds before next March
l to keep the building program
rolling.
Last February, Fairfax had a
bond sale scare when it was
rumored investors were worried
about the pending Gray plan.
School officials visited New York
to assure financial houses they
had nothing to worry about, and
then sold a 81 million bond issue
Iat a satisfactory interest rate.
Alexandria Plans
Alexandria tentatively plans
to sell SIS million in school
bonds in January to build a new
Lyles-Crouch School and pay
of remaining debts for con-
Istruction Of the new Hammond
High School and several other
projects.
Like Fairfax, Alexandria had
planned to offer the bonds
earlier, but has put the sale of
as long as possible because of the
unsettled" bond market.
Arlington County hopes to
offer a $4.49 million school bond
issue for sale as soon as litiga-
ton over its validity is settled.
The Falls Church School
Board is planning to seek a
referendum seen, probably next
spring, on a $750.000 bond issue.
Stanley Sees No Problem
According to the Associated
Press, Gov. Stanley said 1T
would be absurd to think that
school bonds are not as desir.
able" as other securities.
There has been no legislation
passed that would affect their
Isoundness. he said, adding they
will be honored in every re-
spect."
Legislation passed at the spe-
cial General Assembly session
would deny State funds from
any schools that integrate.
School bonds, however, are not
paid of by State funds. but by
taxes raised in the localities that
issue the bonds. What might
worry the bond buyers is how
the bonds would be affected II
a locality closes It's public schools
and refuses TO pay any school
taxes.
The State Retirement Fund.
to be, discussed by the Governor
and the State Treasury Board
tomorrow. now totals some 500
million, which is all invested.
State Treasurer Jesse w. Dillon
said the funds board Of trustees
Is morally obligated 10 get the
best interest rate available. Some
investments pay more interest
than municipal bonds.