12 | BULLETIN 393, U. S. DEPARTMENT OF AGRICULTURE. ieee 
ment. In consequence the financial burden rested at the outset 
entirely upon the two districts named, although traffic from the other 
two districts passed over the roads of these two in going to and 
from Fredericksburg. In spite of these drawbacks, Courtland dis- 
trict voted $60,000 and Chancellor district $40,000, and the bonds 
were sold at intervals between February 8, 1910, and September 
17, 1912. The first $18,700 issued carried 44 per cent interest 
and the remainder carried 5 per cent imterest, payable semi- 
annually. All of the bonds were to run 30 years, but were callable 
after 5 years. In all cases the bonds brought par and accrued 
interest. Callable bonds ordinarily do not bring as high a price in © 
the bond market as noncallable bonds which are payable at definite 
periods. This indicates that the bonds were marketed shrewdly and 
intelligently. Arrangements were made to secure 3 per cent interest 
from the banks on sinking funds. Even then marketing of the bonds 
would not have been accomplished except for the loyal support 
given by local investors. Furthermore, as pointed out in the pre- 
ceding chapter of this bulletin, the combination of long-term and a ~ 
call provision leaves so much to the discretion of the local authorities 
from year to year as to inject an element of uncertainty into the 
matter of bond retirement and tax levies. It might readily occur 
that when officials are in authority who are actuated by an eagerness 
to get the district out of debt, an excessive tax rate would be levied 
and the bonds called in at an unnecessarily rapid rate; or the reverse 
might be true if negligent officials, or those who, for any reason, 
might desire to hold the tax rate down to a minimum, should neglect 
to callin bonds. The district then would earry the burden repre- 
sented by the difference between the 3 per cent obtained on sinking 
fund and the 5 per cent carried by the bonds. It would have been 
better if a 5-30 year deferred serial bond had been adopted, as the 
annual retirement then would have been fixed and the tax rate 
subject to no wide fiuctuation. 
Our subsequent investigations enabled us to see just what financial 
steps were taken in connection with the bond issues. As the bonds 
were not callable until after 5 years, it followed that the first call 
year was 1915. If it were intended that the payment on the debt 
should begin in 1915 and extend to the thirtieth year the logical 
plan for Courtland and Chancellor districts would be to pay off 
$4,000 of the principal each year, from the sixth to the thirtieth year. 
For the two districts for 1915 this would require an average rate 
of 32.7 cents on each hundred dollars of taxable valuation for interest 
and principal for the 30-year period. Of course this rate would 
decrease as the assessment increased at 5-year intervals. 
The plan actually followed in Courtland district was to levy 40 cents 
on the hundred dollars for 1910 and 1911; for 1912, 45 cents; for 1913, 
