PWA Municipals

Already waist deep in the commercial banking business, the Federal Government last week for the first time set itself up as a dealer in municipal bonds. Public Works Administrator Ickcs has on his shelves some $58,000,000 of such securities which he bought to finance labor-making projects. Like any smart bond dealer he saw in the present municipal bond boomlet a fine opportunity to turn over his capital. Last week while financial sections of the Press blossomed with municipal bond advertisements, Bond Dealer Ickes offered for public sale his first batch of PWA municipals:

$100,000 Belair, Md. sewage system 4 1/2 of 1934-1950

$125,000 Cedar Rapids, Iowa 4 1/2 of 1937-1941

$250,000 Erie County, N. Y. read & bridge 4 1/2 of 1935-1936

$200,000 Lynchburg. Ya. 4 1/2 of 1936-1950

$162,000 Richmond County, Ga. school 4 1/2s of 1935-1950

"Purchasers will have the benefits incident to the examination PWA has made of projects and communities represented in these securities." BUT:

"These bonds are not to be considered in any way 'guaranteed' by the Federal Emergency Administrator of Public Works, the United States or any agency of the Federal Government. Should any of these bonds ... be subsequently offered for resale with any statement indicating or implying any Federal Government guarantee, such statement will be fraudulent misrepresentation."

The bonds will be sold to the highest bidder, with bids to be opened March 6.

For some town & county elders PWA's offering came as a shock. Their contracts permitted PWA to sell the bonds, but every municipal and county official had hoped against hope that these securities, which represented 70% of the cost of local projects, would eventually lapse to a par with the 30% outright grant. Bond Dealer Ickes, however, was dead set on turning over his inventory so he could buy more bonds, make more work.

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