More than one local official has beat the political drum for small-denomination bonds, both as a way to bring in local, small investors, and, in some cases where the issuer envisions direct sales, even as a way to cut out underwriters altogether.

Those on the other side of the question point out that such securities may be inappropriate for certain investors. They say it is impractical and inefficient to move $100 or $250 bonds in the secondary market if Mr. and Mrs. America decide they have to liquidate their positions before the bonds mature.

They also point out that roads and bridges and new sewer lines cost a good deal more than issuers can raise through nickel and dime bond sales on their own.

The problem is hardly a new one. The Daily Bond Buyer on March 29, 1897, carried the following editorial, entitled "The Absurdity of Popular Loans."

"We have often referred to the failure of various attempts to place Municipal bonds as popular loans, taking the ground that a popular loan necessitates expensive bookkeeping, the elaborate engraving of numerous bonds, and was in effect a depletion of the Savings Banks, without offering the investor equal protection from loss of bonds. We have also called attention to the fact that the issuance of the whole or part of Municipal Loans in bonds of small-demonstration injured the sale to large dealers, who prefer to handle nothing less than a $1,000 bond.

"Mr. A.B. Leach, of Farson, Leach & Co., of this city and Chicago, who is recognized as one of the closest students of the various Municipal bond problems, furnishes the New York Times of yesterday, a new illustration of the proof of the foregoing conclusion by citing the recent case of Racine, Wis., which thought to place a popular loan. Mr. Leach says.

"'This city sold a block of $20,000 5 per cent. bonds, and in order to carry out the popular idea, $10,000 of them were issued in denominations of $100 each, the expectations being that they would be taken by local investors. There were only two or three local parties bidding on the loan who desired small amounts of bonds, and these did not care to pay within several points of the price at which the bonds were finally sold to an Eastern municipal bond house. Bonds of the denomination of $1,000 are much more convenient, and also save a considerable amount of bookkeeping on the part of the city officials.'"

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