Eureka daily sentinel. [volume] (Eureka, Nev.) 1871-1887, 1881-07-06
OUR STATE FINANCES WITH
REFERENCE TO THE SCHOOL
anhNEKS

MONEYS.
1t is extensively believed that Nevada
is financially in cxtremis. The remark
is not that the State is bank
rupt. 1t is not uninteresting to inquire
to what extent this is true, If 1T be true
at all; and t determine the condition OF
the Public School Fund, about which
much is being said. The State OF Ne
yada owes to-day $425,o00 The prin-
c;pal item in this amount is $3.50, 0oo-a
debt inherited from the Territory OF
Nevada. OF the remaining $4,000,
$40. coo of debt has accrued since the
adjournment of the last Legislature for
current expenses, and $1,000 to defray
the preliminary costs Of constructing the
States Insane Asylum at Reno. This
Indebtedness is in the form Of an ire
decmabie bond for $3.50, 600, bearing in
terest at 5 per cent, payable semi-annu-
ally, and 49, 600 in 1900 bonds at 4
per cent interest, payable, also, semi
annually. At present there are in the
Treasury about Sl00,00 in coin and
Sl00, 600 in United States 4 per cent
bonds. TO whom do We owe this debt?
Not to the German Jews of San Fran
cisco or Of Frankfort on the Main. We
" it to our State School Fund, and
this fund owns the coin now in the
Treasury. This School Fnnd (Nevada's
wind-fall), as everybody knows, has been
accumulated from the sale of lands de-
voted by the General Government to the
State for educational purposes. There
has been considerable criticism on the
action Of the financial officers Of the
State under the laws of the last Legis-
lature concerning this fund. They are
acting, it is said, with indecent haste
under unconstitutional laws, and are
robbing the children Of the State of the
moneys sacredly pledged and set aside
for their education in the public schools.
This criticism comes out of the discus
sion of the Insane Asylum bill princi-
pally. The Supreme Court have this
bill under consideration and are exspected
to render their decision at an early day.
The bill is attacked on the ground Of its
alleged unconstitutionality, in two par
ticulars; first, as to the insufiiciency of
the title-its not including the whole
text-and secondly, that money cannot
be taken from the State School Fund"
for tho purpose.
Neither this law nor that authorizing
a State Loan" has been technically, or
verbally, complied with. They are both
being carried into effect, however, by
means of pre-existing laws which are
plainly constitutional and with which
these later enactments do not conflict.
No money is being either borrowed" or
transferred from the State School
Fund. The method under the statutes
is simply this: The State Board of Ed
u~cation, the custodian of the school
moneys, upon being notified by the Con-
troller that there is money in the Treas
ury to the credit Of the School Find
subject to investment, directs hi to
draw his warrant in favor of the 2 reas-
urer for the amount; and the Treasurer
is then ordered by the Board of Educa-
tion to invest these moneys. Under the
law governing him in these premises he
has no alternative but to invest them in
State or Government bonds. He, of
course, invests in State bonds, 4 per
cents, at par, rather than in United
States bonds, 4 per cents, at an
premium-such a premium as nobody
pays unless he has more money than he
knows what to do with or is too cowardly
to use it in business enterprises.
The faith of the State is solemnly
pledged to its School Fund for the
moneys taken therefrom for investment.
To question the propriety or policy of
the State thus deriving a benefit from
one of its plethoric funds, suggests a
doubt of the States financial integrity,
and indicates a want of familiarity with
the situation. In the outset, this fund,
which has been so "robbed," was in
creased by $55, 900 transferred from the
General Fund in order to place the $780,
600 irredeemable bond to its credit. The
name of the bond ("irredeemable y has
given rise to severe criticism. What is
the value of a security that is not nego-
table; that, on its face, carries the ex-
press contract that its principal shall
never be paid, it is asked? The Terri
torial bonds in the place of which this
bond now stands, would have matured in
1887, and the "irredeemable" bond was
SO framed as to abolish the necessity Of
paying the face of the other bonds at that
date, to say nothing of the 81 per cent
interest. payable s~emi-annually, during
their life. The bond was never intended
to be negotiable, and was not framed with
any such reference, although (f Nevada
holds any respectable place in the o
market) it is negotiable in its present
form, and could, no doubt, be sold at a
handsome premium. But why make a
stumbling block of so harmless a word
as i~rredeemable? The next Legislature
can change the nature OF che bond as the
people may desire, and make it payable
at any time they deem best. The gist OF
the consideration is whether it is better
to have the $3.50, 600 and other amounts
invested az nccasinn ronr;ran n