MUNICIPAL SECURITIES 
201 
of real and personal; Ohio 8 per cent of real 
and personal; California 15 per cent; Missouri 5 
per cent of taxable property; Indiana 2 per cent; 
North Carolina no limit—each issue requires 
legislative enactment; Michigan subject to any 
limitation passed by the legislature; and so on. 
We also find in some cases that a popular vote is 
necessary in order that a bond may be legally is 
sued—a vote in many cases of all citizens entitled 
to vote; then again we find in some cases that only 
tax-payers can vote, and it requires the male and 
female vote. Moreover, in issuing municipal bonds 
it is necessary that they be issued for strictly munic 
ipal purposes. 
It will therefore be seen how very important it 
is that all these legal features be complied with; 
for, if the bonds are not legally issued, the city or 
town can at any time stop paying the interest and 
refuse to. pay the principal. But this is not the 
only way that investors lose money by municipal 
bonds. Here is a case of a small city in Minnesota, 
which was to use the proceeds of a bond sale to 
build a bridge over a river. The total issue 
amounted to about one hundred thousand dollars, 
the bridge being quite expensive, but it was not 
erected where the leading business interests wished 
it. The fact that the city had only one important 
business industry was the bottom of the whole trouble. 
In short, at the beginning of this affair some of 
the politicians of the town voted for certain reasons 
to build this bridge, issued these 6 per cent bonds 
in payment therefor and the bridge was built.