An obligation in the form of a bond issued by a State, the payment of which must be accomplished through the collection of taxes assessed upon the taxable property embraced within its corporate limits.

Some State issues have valuable assets in the shape of income-producing property, which contribute towards the payment of the principal and interest of its obligations; such, for instance, are the large income-producing State-owned wharves and docks in San Francisco.

Again, an indebtedness of this nature may be incurred for some improvement more or less local in its nature, the particular section benefited being primarily responsible for the liquidation of the debt, for which, nevertheless, the State has obligated itself for payment. An example being bonds issued by the Commonwealth of Massachusetts for the benefit of the Metropolitan Water District.

1 The difficulty experienced in keeping silver dollars in circulation is shown by the following excerpt from the Report of the Secretary of the Treasury for 1905: " The silver dollars in circulation June 30, 1898, were $58,482,966. The amount of this coin distributed at Government expense for transportation, from July 1, 1898, to June 30, 1905, was $275,536,512, but the amount in circulation on the latter date was only $73,584,336."

The interest return from most of our State securities is not large, and, consequently, their purchase is more or less limited to institutions such as insurance companies and savings banks, or to trustees of estates, or to those seeking a particularly conservative form of investment, and who can afford the low rate of interest.

The past record of "State bonds" has not been a very happy one. Many of the issues have entailed great losses upon the holders. These debts, however, were incurred under different conditions than at present existing, and there is not to-day any reason to believe that any of our State issues of recent date are anything but safe holdings.

The fact that States cannot be sued by an individual is a point which has always deterred some investors from placing money in securities of that kind.