22 BULLETIN 1177, U. S. DEPARTMENT OF AGRICULTURE. 
has been much more sensitive to district failures than to district 
successes. The earliest districts, after considerable effort, found an 
outlet for then securities in this country and in foreign markets. 
The failures of the early nineties, however, made the disposal of bonds 
on any great scale practically impossible for some years. But bonds 
continued to be sold in small quantities, mainly to local buyers, until 
the revival of interest in irrigation development during the first 
decade of this century caused a ready sale of irrigation securities in 
the Chicago and eastern markets upon the recovery from the finan- 
cial depression of 1907. Then came the second series of district fail- 
ures, coupled with the failure of a Chicago house which had been 
financing Carey Act and district enterprises, the net result of which 
was a second collapse of the market. 
The present market is limited by several factors, important among 
which are the small amount of correct information on irrigation dis- 
tricts among bond investors east of the Mississippi and the prejudice 
against such bonds, particularly in the East and Middle West, as a 
result of the defaults mentioned. Most of the districts that defaulted 
10 years ago were speculative enterprises. Many sections in which 
speculative bonds were sold are too far removed from irrigation cen- 
ters to keep in close touch with irrigation district affairs and to learn 
of what the good districts are really accomplishing. Only in the 
irrigation States of the West has the district come into sufficiently 
close contact with the public to retain recognition. The old preju- 
dice against buying district bonds is still found even in some sections 
of the West; but in several States, by a long process of education, 
strengthened by satisfactory records of local districts, markets have 
been built up capable of absorbing most of the sound local issues and 
some issues from neighboring States. Faced by the possibility, how- 
ever, that local markets may not prove inexhaustible, those inter- 
ested in the financing of large projects are turning their attention to 
means of overcoming eastern prejudice and reestablishing the market 
there. Within the past year a few issues have been sold in Chicago, 
St. Louis, and New York. 
Irrigation district bonds, which are sometimes referred to as 
"municipals," usually bear higher interest rates and sell to net 
higher yields than do the true municipals. Municipal bonds as a 
class are much more numerous, older, and more seasoned than dis- 
trict bonds and have outgrown the effects of early cases of default. 
Likewise the element of hazard, which enters in greater or less degree 
into agricultural and reclamation undertakings, is less pronounced in 
the case of municipalities. These factors necessitate a greater amount 
of advertising for district bonds, the cost of which, together with 
other greater expenses of handling, selling risk, etc., makes the mar- 
gin between the price dealers pay for the bonds and the price at 
which they sell them to the ultimate investors usually greater than 
that for good municipal bonds. This margin grows smaller in the 
case of old settled districts with established reputations. 
Measures taken in recent years to strengthen State supervision 
over district activities, and particularly to provide for State certifi- 
cation of bonds of feasible projects, are generally thought to have 
had a very beneficial effect upon the salability of bonds. Most bond 
houses in" States which have provided for certification handle only 
