RURAL CREDITS 



739 



the land affected. The assessed benefits represent the increased value 

 which the law contemplates will accrue to the lands because of the 

 improvement and, after confirmation, they become the basis of taxa- 

 tion for the purpose of paying the cost of the improvement. To pro- 

 vide the funds with which to construct the improvement, bonds, in 

 most cases, are issued by the district. These bonds ordinarily yield 

 from 5 1 per cent to 6 per cent, are general obligations of the district, 

 and are payable, both principal and interest, by taxes levied upon the 

 real property against which benefits have been confirmed and in pro- 

 portion to the same. In most cases the provisions authorizing the 

 issuance of drainage bonds are very favorable and provide for serial 

 maturities in substantial amounts within the reasonable life of the 

 improvement. In some states the entire issue must mature within 

 fifteen years; in others the limit is twenty, twenty-five, or thirty 

 years, but twenty years is the rule, with substantial payments begin- 

 ning as soon as the benefits are received. 



Draining or improving land by removing water or preventing over- 

 flow, confers a special benefit which can be estimated with a reasonable 

 and satisfactory degree of certainty; hence it is equitable and proper 

 that drainage taxes should be levied in proportion to the benefits and 

 not in proportion to the value. An improved farm, located on the 

 edge of a district, requires less drainage and receives less benefit than 

 a piece of land which is covered by water all or a substantial part of 

 the time. 



When drainage bonds are issued, the district pledges itself to pro- 

 vide for the payment of the principal and interest by making such 

 tax levies as are necessary. In most cases the total tax is levied and 

 becomes a fixed lien upon the property, the district agreeing and 

 binding itself to levy and collect certain annual instalments which 

 will be sufficient to meet the requirements for principal and interest. 

 In other cases' the total tax is divided into instalments and set out for 

 the various years, the annual instalments being extended against each 

 tract of land. 



The following concrete examples are interesting: 



Twenty years ago a drainage district embracing 50,000 acres of land 

 was organized; bonds aggregating $85,000 were issued and the work 

 completed. Although the engineers and officials had had practically 

 no experience in such work, this improvement resulted in practically 

 all of the land in the district being opened for cultivation. At the 

 time the district was organized the land was worth not more than 



