Omaha daily bee., 1872-12-31
THE SCHOOL FUND AND STATE
FINANCES.

Treasurer Koenig and Mr.. Owen,
Of the State National Bank, are get.
ting up n scheme for improving the
finances of the State by buying up
her 1925, 900 in warrants, and issuing
in lieu thereof coupon warrants,
bearing ten per cent. interest, using
for this purpose the permanent school
fund, now invested in United States
bonds.
1t would be bad policy, we think,
to put the school fund into any other
form than it now is. If it is desira-
BILE to bring State warrants up to par
(as it no doubt is), the State had bet
ter bond itself, and not tamper with
the school iund.-Beatrice Express.
We would respectfully refer the
Express to our State Constitution,
which prohibits the State from in
curing more Than $4,000 of in
| debtedness at any time without SUBJ
hitting the question of "bonding" to
the people at a general election. A
proposition for funding the outstand-
ing indebtedness Of the State, and
raising a sufficient amount to cover
the estimated expenses for tho next
two years, could have readily been
submitted to the people at the last
State election, but we presume Gov.
James and certain other political
powers we're disinclined to chance an
extra session Of the present Legisla-
ture.
The proposition to invest the per.
mancnt school funds in State war
rants bearing ten per cent. interest,
was brought forward and urged forci-
bly, at the last session of the Legisla-
ture, but the scheme failed, owing to
the dive rsity Of opinion as to the
proper manner of carrying it into
effect. Now we presume the finan-
cial problem Is not merely to raise q
certain portion of the outstanding
warrants to par, but to redeem them
all, and create n capacity
for their permanent redemp-
tior hereafter. II this could
be accomplished by issuing the $780,
900 of State bonds, authorized by the
Constitution, and the investment Of
the permanent school fund in State
warrants, the problem would readily
be solved. We incline to the opinion,
however, that it is an impossibility,
simply because there have already a
sufficient amount of warrants been is
sued to cover that amount, with the
prospect Of at least 800, 900 more war
rants being added this winter, to cover
the floating indebtedness not yet au-
dited. If therefore the amount real
lied from the conversion of the per-
manent school funds into State war
rants, and the issuing of $4,000 in
bonds is insufficient to redeem "all"
the warrants now outstanding, or to
be issued this winter, this policy
would necessarily benefit only a GER
tain preferred class of warrant-hold.
ers, while Others would perhaps be
no better off than they are to-day.
While we regard the investment ofthe
school fund in State warrants, or
so-called State certificates of indebt-
edness, as perfectly safe and more re-
munerative than tie present invest
ment, there is no good reason why
the State should pay more for these
certificates or warrants than their
value in the financial market. We
incline to the opinion that the
State Treasurer should treat the school
fund, precisely like any fund trans
mitted to him by outside parties, for
the purchase of warrants or bonds.
He should first sell the L. S. and
Union Pacific bonds, now in the
Treasury, to the highest bidder.
Having converted these bonds into
legal tenders, he should advertise for
proposals for State warrants, just as
Secretary Boutwell, does for ". 8.
bonds, purchasing those offered by
the lowest bidders. Thus all warrant
holders would be placed on a perfect
ly equal basis, and the State could
secure the benefit of the discount.
Any other proposition looking to the
conversion of the school fund into
warrants, or certificates of indebted
ness at par, must demonstrate beyond
a doubt that not only all the State
warrants now outstanding will be re-
deemed for cash by the State Treas
urer, but that all warrants to be is
sued during the fiscal year will also
be cashcd without fail. Otherwise
there would necessarily be discrimin-
alton and partiality in favor of GER
tain creditors, and against Others who
are equally entitled to their money.
--Ay ear ago a fashionable tailor
in Boston made an elegant robe de
chambre for a lady, who presented it
to her afianced husband. 1t was a
gorgeous affair of silk velvet and
satin, with n smoking cap and slip
pers to match. They were married
but after six months of fonnubial
life they separated. and now the gar.