Content area
Full Text
It's spring of 1921, and the state of North Dakota has a big public relations problem.
"The impression has been spread far and wide that a dangerous experiment in Socialism is being tried out among the state's Norwegian and German farming populace," declares a notice in the May 28 issue of The Daily Bond Buyer. "The leaders of finance have blacklisted the State's bonds"
Undaunted by threats of a market boycott, George Webb, director of the Bank of North Dakota, journeys to Wall Street to launch a major public information campaign to dispel market rumors that the state is going red. The move pays off for George Webb, who may be one of the bond market's first apostles of municipal disclosure.
A subsequent notice points out that the bonds have been selling like hotcakes since Mr. Webb's arrival in New York.
"This man is no long-haired Socialist," the notice says. "He is as far removed from the type we call Bolshevist as anyone could be: He displays no sign of 'red' unless it be in his healthy complexion, and all he is looking for on behalf of the sovereign State of North Dakota is a 'square deal.' "
George Webb may have been one of the first issuers to ponder how to get accurate information about his bonds out to potential buyers, but he certainly was not the last. The issue is as fresh in 1991 as it was in the days of anti-Bolsheviks. Moreover, digging through The Bond Buyer archives shows that over the past century disclosure has surfaced repeatedly as a major area of concern.
Take, for example, a notice in the April 10, 1919, issue of The Daily Bond Buyer lamenting dealers' difficulty in getting financial statements from small issuers of municipal bonds.
"The education of the small municipal official is a slow and discouraging task. He is not usually acquainted with financial matters and he, naturally, fails to comprehend what to the bond man is so obviously necessary to any consideration of the value of a bond issue.
"The larger places generally respond promptly to requests for data and usually a financial statement of some sort is furnished. But in the small communities, the public official in charge of the...