80 BULLETIN" 393, U. S. DEPARTMENT OF AGRICULTURE. 



this fund is deposited with the bond trustees of the coiuity, con- 

 sisting of three bankers, and by them invested in securities which 

 must be equally as good as the bonds. The trustees are planning 

 to buy up the road bonds whenever their funds are sufficient to do 

 so and the bonds are available for purchase. • It is planned to retire 

 $3,000 of the bonds during 1916. The weakness of the plan adopted 

 lies in the extreme improbabihty that 5 per cent will continue to 

 be obtained on the sinking fund. If the county succeeds in obtain- 

 ing over the entire period an average of more than 4 per cent on its 

 sinking fmid, it will have accomphshed more than could reasonably 

 be expected. 



As an indication of how the smkuig-fund method compares with 

 the deferred serial method, it might be pointed out that the annual 

 outlay for interest and retirement of the $250,000 bond issue under 

 the former, with interest on the sinking fimd at 4 per cent, would be 

 $16,957.53, and under the deferred serial method, with the bonds 

 running 5-30 years, the annual outlay v^^ould be $15,833.33. If the 

 county, however, succeeds in obtaining 5 per cent on the sinking' 

 fmid throughout the entire period the annual outlay will be 

 $16,262.85. 



It would, therefore, appear that if the deferred serial plan had 

 been adopted instead of the sinking-fund plan, with interest on 

 sinking fmid producing 4 per cent, a total saving of $33,725.75 could 

 be realized, but if the sinking fund produced 5 per cent the saving 

 would be only $12,855.50. This latter sum is, however, equivalent 

 to about 5 per cent of the total bond issue and would have been 

 sufficient to pay for aU engineermg expenses. 



To provide an annual outlay of $16,262.85, a levy of about 2 mills 

 on each dollar of assessed valuation will be required on the basis of 

 the present assessment, but naturally this rate will decrease as the 

 assessed values increase. 



The tax levy for the road bonds in 1910 amounted to 7 miUs and 

 in 1915 to 3 mills. The sinking fund contained $47,396.98 on 

 December 1, 1915, which indicates that the rate of accumulation is 

 greater than necessary to retire the bonds in 30 years. 



A comparison of tax rates for the years 1905, 1910, and 1915 

 reveals the fact that there has not been a very great increase in the 

 rate on account of the road improvement, as the total rates were 24 

 miUs in 1905, 26^ mills in 1910, and 26 mills in 1915, and that while 

 the 24-niill rate produced only $49,472.86 in 1905., the 26-mill rate 

 produced $178,420.89 in 1915. In other words, while the tax rate 

 increased during that period only 10 per cent, the receipts increased 

 260 per cent, indicating a remarkable increase in taxable wealth. 

 While there was a levy of 3 miUs in 1915 for road bonds, as compared 

 with no levy for that purpose in 1905, the levy for general county 



