§ 8. Refunding bond issue authorized for territorial debt payment. The territorial treasurer is hereby authorized and empowered to issue refunding bonds to the amount of one hundred seven thousand five hundred dollars, bearing interest not to exceed the rate of four percent per annum, for the purpose of refunding the following described indebtedness of the territory of Dakota, to wit:
Seventy-seven thousand five hundred dollars, five percent bonds, dated May 1, 1883, issued for the construction of the west wing of the insane hospital at Yankton and thirty thousand dollars, six percent bonds dated May 1, 1883, issued for permanent improvements [of the] Dakota penitentiary, at Sioux Falls, such refunding bonds, if issued, to run for not more than twenty years, and shall be executed by the Governor and treasurer of the territory, and shall be attested by the secretary under the great seal of the territory.
In case such bonds are issued by the territorial treasurer as hereinbefore set forth, before the first day of October, 1889, then upon the admission of South Dakota as a state it shall assume and pay said bonds in lieu of the aforesaid territorial indebtedness.