NATIONAL ASSOCIATION OF BOND LAWYERS
Voice from the Past
Chapter 23
One of the reasons I was hired by Chapman and Cutler in 1950 involved the sudden
increase in the number of schools that had to be built around the U.S. in the years following
World War II. The baby boomers, who are now mostly in their fifties, were about to enter
school, and buildings had to be readied. So I was brought up in the bond counsel practice
believing that almost all bonds were for schools. There were also a few issues here and there
for water, sewers, and streets, to provide for the subdivisions into which the parents of those
children would move when the grandparents found living conditions crowded and the veterans
got jobs.
Most of the work I did on school issues was for districts in Louisiana and Utah
(because of the way that work was parcelled out among the partners), but there were several
in Georgia, Florida, Oklahoma, Texas, Arizona, and Idaho. Everywhere the bonds were
general obligations and were voted at elections that very seldom failed to carry. In those days
issues were much smaller than they are now, and $100,000 was considered a good size. I
recall one issue of $7,000 to improve or build a school gymnasium. One week I found that I
was working on the largest bond issue covered by the Weekly Bond Buyer's pink sheet. (This
used to show all bonds coming to market). Mine was a $750,000 monster for a school
district in Idaho.
Bond issues kept coming and coming. I recall one day when twenty-seven pieces of
mail arrived in my boss's office while he was away; all related to bond issues we were
working on, few of them the same. The issues were not particularly complex, but there was
enough difference among them so that (with one exception that I knew of) a lawyer could not
simply turn a form over to a secretary and have her type up the papers. That exception was
my boss, Joseph Matter, who had a particularly adept secretary; yet even he reviewed
carefully every document she typed, and usually required several changes. This was before
Xerox, or even stencil machines. All documents were typed on one heavy red-lined sheet of
paper, with three thin red-lined sheets and two plain sheets, all separated by carbon paper.
The copies on plain paper were kept for use as forms on future transactions, and the letters so
inked on them were far from crisp. Making a correction on any page was a chore, as the
typist had to erase the error on six sheets of paper and then re-insert the pages into the
typewriter so that the corrected items were not readily noticeable. Woe betide any young
lawyer who had made a mistake in marking up a form that required one of the more
experienced secretaries to correct a mistake that she did not make. And if the lawyer's error
required retyping a page or more, his palms would sweat at the thought of facing that
secretary.
At this time we were still examining a number of transcripts prepared by local lawyers
and submitted to us after the sale of the bonds but before delivery. We prepared the closing
papers: the signature identification certificate and the treasurer's receipt. The latter included a
clerk's certificate to cover any matters of fact that had to be tended to at the last minute. We
also became adept at patching up mistakes that had been made in the preparation of the
documents included in the transcripts. I recall a letter we sent from time to time, pointing out
that the voted proposition as it appeared in the proceedings calling the election differed from
that appearing in the ballot. Our letter suggested that perhaps the certified copy of the
proceedings sent us was in error and that the original proceedings as they were of record
might have had it right; if so, we would say, please send us a certified copy of the minutes as
actually of record. It was surprising how often our surmise proved correct, and the actual
proceedings did conform to the ballot. Once in a great while this did not work. Then I
researched the law about the power of a governing body to amend its minutes to make them
speak the truth: i.e., the real intent of the governing body. The law proved pretty
accommodating in this respect. At least once a governing body came to the conclusion that
what it had really intended, when calling a bond election, was to submit the same proposition
as was on the ballot; amending the proceedings calling the election made it unnecessary to
call a new election. On one occasion the notice of bond election prescribed by the
proceedings was not published. There was plenty of publicity about the election, in the press
and elsewhere, and the election carried handily, but nevertheless it was hardly a valid
election. However, the State Supreme Court had held that the Legislature could cure any
defects in the giving of notice, even though the election itself was required by the State
Constitution. I was not popular with the governing body when I told them that they had to
get an act of the Legislature, but they preferred this to holding the election again.
All the letters and forms we sent out bore a punch mark, either the letter "J" for Jay
Altfilish or "H" for Henry Cutler. These two senior partners had quit examining every letter
and form personally, but the punch marks still identified the pages that we sent out, so that
any forms returned without the punch mark were a cause for suspicion. Little paper H's and
J's littered our floors like confetti before each night's cleaning crew arrived.
One feature of World War II was the lack of building materials for local water and
sewer systems. It was well into the 1950's when I got a call from a lawyer for a rural sewer
district who wanted to know what to do with the proceeds of bonds that had been voted and
issued for sewer purposes before the war. The shortage of materials to build the sewer
system prevented the district from spending the proceeds for the voted purpose, but the
district had continued to levy and collect taxes to pay the bonds and now they were all
retired. The usual rule is that unused bond proceeds should be used to pay off the bonds, but
this could not apply here. I asked if the sewer system had been built after materials became
available, and was told that the bond proceeds were insufficient because of inflation, so the
district still had no sewers. My response was that the only thing that could be done with the
bond proceeds would be to pay part of the cost of a new sewer system, with the rest to be
paid from the proceeds of a new bond issue. I don't recall any other time when I advised a
client that the law required it to issue bonds.