76 THE FISCAL PROBLEM IN MISSOURI 
It may be concluded that during the period in question 
Missouri was able to dispose of its debt obligations under 
circumstances that resulted in a very moderate cost of 
money. Market conditions were favorable during most of 
the period, and the tax exemption feature helped to keep 
down the cost of money. The most significant factor, how- 
ever, was the excellent credit position of the state, together 
with the fact that in floating the highway bonds ample pro- 
vision was made for the receipts necessary to meet interest 
and principal payments, which carried an assurance that 
the high credit standing of the state would be maintained. 
INTEREST RATES oN LocaL Bownbps 
It is to be regretted that the cost of money analysis as 
applied to the receipts from the sale of state bonds cannot 
be used in the case of bonds issued by Missouri local govern- 
ments. Such an analysis would unquestionably be most 
instructive, but the requisite information concerning sales 
prices and maturities is not available. However, informa- 
tion concerning the coupon rates of interest borne by local 
bonds issued is accessible, and in lieu of an analysis based on 
actuarial computations of the cost of money, Table 26 was 
compiled. This table, while indicative of the cost of money, 
cannot be used to draw conclusions of so definite a nature as 
those arrived at in the case of state bonds. If it were assumed 
that the coupon interest rates on local bonds are adjusted to 
market conditions so that on the average they will be dis- 
posed of at par, the average rates as given would be the 
approximate cost of money expressed as a percentage of the 
principal sum, but such an assumption is perhaps too liberal, 
and for that reason the discussion will be confined to coupon 
rates as such. 
The average coupon rate of interest borne by bonds issued 
by Missouri local governments during the years 1926 to 
1929 was 4.35%,. The highest average rate in any year was 
4.539, for 1929, and the lowest was 4.189, for 1927. The 
average rates are influenced by several factors, the most im- 
portant of which perhaps are bond market conditions and 
the credit position of the issuing governments. Except in