McCook weekly tribune. (McCook, Neb.) 188?-1886, 1884-10-09
THE SCHOOL FUNDS.

corning the questions involved, the FOLLOWING
communication was addressed:
To the Honorable, the Supreme Court or
| Nebraska; We, the undersigned members or
the board of educational lands and funds.
would respectfully represent that doubt
exists I'm regard to the construction or section
| o, article 8, of the constitution, and section
20 of an act entitled IAN act to amend an act
| entitled an act to provide Tor the registry,
| sale leasing and general management or all
| lands and funds set apart for educationai pur-
poses, and for the investment or 1unds arts
| fng from the sale of such lands being arti-
| Gle l. chapter so, compiled statutes. ALSO 10
| repeal article OF said chapter 81. Approveu
| February "a, 1883" And II not inconsistent
| with the duties of your honorable court IN
| order to further the proper execution OF tho
| law, we would respectfully solicit an opinion
| upon the following questions: -,
First-Can the board of educatonai IahuS
| and funds under the said section OF the con-
stitution and law. invest the principal OF the
permanent school fund in the Uniteu otates
three 90 per cent bOndsI II so, can tney puy
premium therefor from the temporary
school fund? Or will the board in paying
such premium be compelled to draw from the
permanent school fund therefor! "
Second-Can the board In purchasing high
rate of interest registered county ponds ue-
tach coupons therefrom so that the remaining
coupons will net the state six 90 per cent from
the date of purchase to maturity!
Third-Have the board after purchasing
United States three CD per cent bonds ior me
law, to sell or convert such bonds INTO hlgh
rate of interest registered county bonds!
Respectfully submitted,
f. =. ROGGES, Secy. of state.
ISAAC POWERS, Atty. Genl.
JAMES w. DAWES. Governor.
Members of the board of educational lands
and funds. Treasurer p. ID. Sturdevant,
dissenting.
Upon presentation to the honorable supreme
court of the questions above written, It was
suggested by the judges thereof that the at
torney general appear with snch legal propo-
sitions as he might deem NJ ana snan ,ia the
file with said court the facts concerning, ana
reasons which called for action of the court,
whereupon the following communication was
prepared and presented. to-wit:
To the Honorable the Supreme Court of Ne
braska: We, the undersigned members of
the board of educational lands and funds of
Nebraska, having Joined in request to your
honorable court to answer certain questions
heretofore submitted, with reference to the
investment of the permanent school funds of
this state, beg leave to submit for your infor-
nation the following state of facts. and con-
illusions leading to the submission of the
aforementioned questions to your honorable
court:
1t appears from information filed with said
board, by the state treasurer. whose duty il is
to apprise the said board of the amount of the
permanent school fund on hand, and unin-
vested, at its monthly meeting on the second
Tuesday of each month; that since about
March, 1882, there has been accommodating in
nent school fund in excess of the amount the
board of educational lands and funds have
been able to invest in securities offered it.
That on November 80, 1882, there sur
plus of permanent school funds amounting to.
Sl36.S15.5l. 1t further appears that, though
the said board have endeavored to invest said
permanent funds in such securities as they
could approve, there is now on hand, and I'M
invested, the sum of about $3.50 being
q gain over investment of $4,000 in one year..
From the business of the land department in
the past, we are able to judge that during the
next three months there will be received by
the state treasurer large sum belonging TO.
said permanent school fund, estimated by
those competent to know at from $4,000 to-
100000.
And we further represent that, in our opin-
lon, we shall be unable to invest the said
amounts in registered county bonds of this.
state, bearing six per cent interest.
We believe that the accumulation of such q
large sum of money in the state treasury.
bearing no interest to the temporary school
fund, is of sufficient necessity to warrant us
In propound1ng the questions heretofore sub
mitted to your honorable court. And we ur-
gently request Il consideration upon your part,
that possibly may enable us to invest said
funds that the school fund shall derive every
benefit possible.
At the request of members of this board the
attorney general will appear in person, or in
writing, with such legal propositions as he
may deem proper
Respectfully submitted,
President Board Educational Lands and
Funds.
EP ROGGEN,
Secretary Board Educational Lands and
Answering the foregoing questions the
honorable supreme court replied as follows:
10 the Honorabie Board of Educational
Lands and funds:
GENTLEMEN: Deeming an answer to the
questions propounded by you in your COM
of the 18th inst, respecting the
investment of permanent school funds of this
state, not inconsistent with our duties, we
submit the following:
j, To the first question. taking them in the or
der in which they are put, we answer that
you are clearly in authority under the Sec
uons OF the constitution and statute to which
you refer, to invest those funds in United
States per cent bonds if you deem it advis--
able to do so. The doubt you mention of your
right to invest in these per cent bonds was.
very likely, by the low rate of in
terest which they bear. together with the pro-
viso in section % of the act of February ~
1873, relative to investments in thigh rate in
terest bonds" of counties which cannot be
made so as to net "a lower rate of interest
than per cent per annum." But this re-
stncton extends ut most only to the purchase
Oh county bonds, and evidently has no refer
ence whatever to investments in United
States and state securities
AS to the payment of premiums. If they be
necessary in the purchase of United States
oonds, these must be made out of the perma-
nent school fund, for there is no authority
for making them out of any other. The only
cases IN which premiums can be paid out OF
,he temporary school fund. are those of in
VestmentS, in high rate of interest county
julius, us PROVIDED IN the above mentioned
section, and even these, but for this special
provision, would have to be made out of the
permanent fluid. The payment of a premium
m making an investment when the market
Talue OF the security purchased iustifes and
,equlres 1t, is legitimate use of the money
IS part OF the investment. and does in no.
en- VIoitte tne constitutional provision that
ms fund shall remain forever invfolate and
Investments OF this fund in any OF the Sc
,urittes permitted by the constitution yyheth.
r at their par value, or above or below it. al
hough made IN the reasonable hope of an adj
rance in their market value and conse1uent
rain, must necessarily be at the hazard of a
.epreciatlng and consequent loss. Within the
estr1ctlon or the constitution, which limits
nese investments to United States bonds the
aW leaves them entirely to the Judgment of
your honorable body.
10 the second question we answer no.
While SO far as we now see, a purchase Of
high rate of interest county bonds, in the
node suggested by the question, might pro-
luce substantially the same result as would
hat designated by the statute If is different.