For school purposes, a separate municipality is often created with its own officers and territorial lines. Such geographical divisions are often called "School Districts." This custom is very common in the middle and far West, and " Board of Education" and "School District" bonds are those issued by such municipalities. The name "School District" is more commonly applied in certain sections of the West where the cities are subdivided into several districts and the same method of subdivision is extended to the rural sections; whereas the title "Board of Education" is more commonly in use in sections where practically the entire city is embraced in the district.

These bonds have, as a rule, proved very safe investments. The appropriation of money for the education of children appeals to the average American, which, together with the fact that many of the Western States have received financial aid in the way of public lands for school purposes, has made a sound basis for the establishment of good credit.