46 BULLETIN 393^ U, S. DEPARTMENT OF AGRICULTUEE. 



The board of county supervisors is authorized to create a sinking 

 fund and to apply any part or all to the purchase of any of the bonds 

 at any time. The county board is further authorized to lend upon 

 real estate security, the loan not to exceed 50 per cent of the assessed 

 value of such real estate, or deposit in bank at interest all accumu- 

 lations of money to the credit of the smking fund. No sinking 

 funds have been so invested, as it is difficult to lend money on real 

 estate on a 50 per cent assessment basis, and for that reason the 

 board of supervisors expect to purchase and rethe the bonds as fast 

 as money accumulates in the sinking fund, provided the bonds are on 

 the market at a price which would be advantageous to the coimty. 

 This method would be somewhat similar to the deferred serial method. 



It must be borne in mind, however, that the holders of the bonds 

 might, up to the twentieth year, refuse to surrender them, and would 

 thus force the sinking-fund method upon the county. This element 

 of uncertainty is the weakness of the retirement method as contrasted 

 with a regular deferred serial method. 



On the basis of the 1915 assessment of $13,500,000, the $700,000 of 

 county bonds could be paid off in 25 years by an average tax rate of 

 36.7 cents per hundred dollars to be devoted to pajment of interest 

 and retiring the bonds annually, and the total amount paid out would 

 be about $1,241,500 if $35,000 of the bonds are purchased at par each 

 year after the fifth year instead of estabhshing a sinking fund. Under 

 the sinking-fmid plan, with sinking fimd bearing 3 per cent and run- 

 ning 25 years, the total cost would be $1,354,988, or an average of 

 $54,199 per annum for interest and retirement. The total saving 

 by paying off the bonds instead of accumulating sinking fund would be 

 $113,488. The tax rate for the sinking-fund plan would be 40 cents 

 on the present valuation as compared with 35.7 cents for the deferred 

 serial plan, or for buying up the bonds at par. 



If the total bond issue of $960,000 were retired the twenty-futh 

 year on the sinking-fund plan, with mterest on sinking fund at 3 per 

 cent, the total cost would be $1,858,269. If the serial plan were 

 adopted with the first payment, beginning on the sixth year, and the 

 last payment the twenty-fifth year, the total cost would be $1,704,000, 

 thus showmg a total saving by the deferred serial plan of $154,269, 

 a,s compared with the sinking-fund plan. Even if 4 per cent could be 

 reahzed on the sinking fund, there would still be a saving of $72,288. 



The fax levies are fixed annually by the county board of super- 

 visors, and in order to provide for the county bond issue tlie board 

 levied a tax of 30 cents on the hundred doUars in 1910, but even 

 with this additional burden the tax rate for local purposes was only 

 10 cents higher in 1910 than in 1905, as there was a reduction of 5 

 cents in the tax for general county purposes and a total elimination 

 of the tax of 15 cents for district roads. Thus the total tax burdens 



