Bonds to Finance School Buildings

Abstract

A LARGE PORTION OF THE LITERATURE pertaining to school bonding is to be found in connection with municipal bonding. There has been a considerable number of accounts written which are descriptive of successful bonding campaigns or suggestive of trends and best practices. These, however, would hardly be classed as research. One of the first primers on bonding which has been considered basic in the field was Fraser Brown's Municipal Bonds (1). Even though it dealt with municipal bonds, most of the content was equally adaptable to school bonds. The study considered the bond as a negotiable instrument, types of maturity, the sale and award, validation, and the functions of the attorney. Fowlkes (7) in 1924 made a study of the entire area of school bonds. He covered all the phases of the bonding program-justification, marketing, retirement, and bond accounting-and included the public relations aspect as well by suggesting many campaign devices and materials. Different kinds of bonds were described and their relative advantages and disadvantages pointed out. Clark and Royalty (4) studied the effect of broad seasonal swings in the bond market on the timing of offerings and the accuracy with which trends could be predicted. Halsey (9) also studied seasonal fluctuations in the bond market and criticized the bases of the Clark-Royalty predictions. Garvey (8) studied the legal requirements in the various states on school bonding. The state laws dealing with the purposes, authorization, debt limitations, sale, refunding, and redemption were presented in tabular form. Smith (14) surveyed the debt limitations in all the forty-eight statesthe amount of the limitation, its base, and its source, whether statutory or constitutional-and drew comparisons by reducing them to a common denominator. The study contained the pertinent extracts from the school codes of all the states. Complete tables set forth various state bonding regulations with reference to the kinds of bonds, maximum duration, vote required, type of sale, minimum sale price, and maximum interest rates. In 1927 Chamberlain and Edwards (2) published a revised edition of their scholarly and frequently quoted text dealing with all types of bonds. This was written from the investment standpoint. The first part contained a basic treatise of bonds as investments and also a classification of bonds as to the obligor, the security, the purpose, and the conditions attending payment. Part Two discussed civil loans-their nature, history, security, and validity. During the same year Engelhardt and Engelhardt's Public School Business Administration (5) made its appearance and continues to be the school administrator's most common reference. Its section on school bonds considered the kinds, life, authorization, and sale. A complete bond trans-