78 THE FISCAL PROBLEM IN MISSOURI
cases where a large amount of bonds is issued by a local
government with a particularly strong or an unusually weak
credit position, differences due to the respective credit posi-
tions would tend to offset one another, with the result that
market conditions would be the most influential factor
affecting the average rate.
The modal, or most typical, rate for the four-year period
was 4149%,. More than 439, of all local bonds issued bore
that coupon rate. The modal rate in this instance is not so
significant as the average rate, for the reason that the mode
is largely the result of the predominance of 4159, bonds
among those issued in 1929. Since the bonds issued at rates
of 49, and 414%, when combined, exceed those issued at
the modal rate, it may be concluded that, although the modal
rate indicates the point of greatest density, because of the
concentration at the lower rates the average is better suited
for purposes of interpretation. Reference to the percentage
distributions for individual years indicates that the modal
rate is not particularly significant except in the year 1929.
In all other years the average is to be preferred.
For the year 1928 the average rate borne by local bonds
issued in Missouri was 4.319%, a figure close to the average
for the four-year period. This average of 4.31%, compares
favorably with the average for all state and local bonds issued
in the United States in that year, which was 4.44%.
INTEREST PAYMENTS BY MissoURI AND OTHER STATES
The interest payments made by a governmental unit in
any fiscal year cannot be said to represent the aggregate
cost of money in that year. Interest dates are adjusted in a
manner that will accord with fiscal requirements, and as a
result the payments made in a given year are not exclusively
for money used in that year. At the close of a fiscal period
there is an accrued interest liability on account of interest
due on obligations that do not bear an interest date the
same as that for the close of the fiscal period, and allowance
would have to be made for this fact if interest payments were
1 National Industrial Conference Board, Cost of Government in the United
States, 1927-1928, p. 55.
