Bulletin HASKINS & SELLS 79
THE already long and diversified list of
securities available to the investing
public is being continually augmented. As
new and difficult situations arise in the
course of financings, the seemingly never-failing
ingenuity of financiers creates a new
kind of securities for the occasion.
One of the most recent additions to the
list goes by the name of rental certificates.
An issue of $3,351,000 State of Georgia
4 ½ % Railroad Rental Certificates was
offered to the public early last summer.
The circumstances surrounding the issuance
of these securities are particularly interesting.
Something Slightly New
The State of Georgia was in need of
funds for certain purposes. It was precluded
from obtaining the necessary moneys
through the medium of an orthodox bond
issue, however, because of a very conservative
limitation in the State constitution
as to the amount of funded debt which
it might incur. Consequently, it was forced
to cast about for other means of financing.
The State owned a railroad, which it was
leasing to private interests at a rental of
$45,000 monthly. Using as a basis the
future income from this lease, a financial
plan was evolved whereby the State could
obtain the funds it desired.