Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1891-01-23
Interest on state Funds.


Total. .. ......... .............. sS2, 424 90
Interest on state Funds.
The Legislature of 1876, having ascer-
tanned by the report of the state treasurer,
in response to a resolution of inquiry, that
deposits Of the moneys remaining in the
had been custOmarily made in various banks
in the state, and that the treasurer had
derived considerable sums OF interest
every year from the banks which carried
these funds, enacted a stringent law by
which he was required to keep within the
wants Of the treasury all public moneys
committed to his custody, and in com
pensatiOn so far as the legislature rega ded
compensation justly due, for the de pliyation
of interest and fees previously enjoyed by
the treasurer. the salary of that officer
was changed from 200 to s., 600, and
he was directed to pay INTO the treasury
all fees and perquisites received Icy him
from every source. This law was in
cOrpOrated with the revision of 1873 and
still remains upon the statute book, Il
plain and unmistakable declaration Of the
policy of the state, as determined by the
legislature; and its enforcement il charg-
general, as an additional sanction, who
are required. at least once in each quarter
year, and at such other times as the
governor may think fit, to examine and see
that all money appearing by the books of the
secretary of state and state treasurer as
belonging to the several funds, shall be in
fact where the law required it to be, in
the vaults of the treasury. II was un-
questlonabiy the purpO-e OF the legislature
to prevent the use of public funds for any
purpose of gain to the treasurer, to any
faVorites, or to the state itself Notwith-
standing, 1t now appears that this law has
been Systematically and continually vio-
lated for years, by the deposit OF most of
the funds of the state, amounting to many
hundreds of thousands of dollars, in
various banks. and public rumor, so strong
" confirmed by circumstances as to be en-
tirely credible. imputes the practice to
the banks holding these deposits, of pay
ing interest for the use of the money.
either to the treasurer or to other persons
whom he has permitted to receive 1t.
there are many reasons which render 1t
prudent and even desirable that the pub
lie mOnevs should be kept in repositories
outside the treasury. The risk which the
treasurer and his bOndsmen assume in the
custody of SO large a sum of money, if re
quired to keep it all together, both from
fire and robbery. Is such as would seriously
interfere with that officers obtaining
sureties for the high liability imposed by
his official bond. 1t would be some dis
advantage that SO much currency should
be withdrawn from common use, and es-
pecialiy is it convenient TO the creditors
of the state that payment be made by drafts
of the treasurer payable at commercial
centers. These considerations have Oper-
ated to check criticism Of violation of the
law, among those to whom the facts be-
came known. and seem, nth others, to in
dicate that the policy declared by the legis-
lature of 1876 is not the wisest for the state
to pursue.
DurInC many years the average amount
Of public moneys available for deposit
has probably been above 100000, and
banks of the most approved responsibility Y
are ready and willing to carry these de-
posits. subject to check on demand, and
pay the usual rates Of interess common to
those institutions where laIge sums are
kept 10y depositors for a length of time.
This rate of interest ranges, as am in
formed, from two to three per cent. and it
is obvious that the deposit of these funds,
under proper restrictions. might therefore
not only subserve the useful purposes In
dfcated, but rightfully and properly af-
ford to the state 4 moderate source of rev
enue, which would be to that extent a
relief TO the people from taxation. To
secure the safe operation of such a policy
careful legislation is necessary Among
other things it should require abundant
security from every bank admitted TO tie
list of public repositories; it should make
the state preferred creditor, and provide
every other reasonable safeguard to pro-
teet the funds from loss and insure pay
ment to the treasury of all interest aris-
ing from them. This implies, of course,
radical change of Pchey from that here
tof0re prevailing in our law. There ap-
pears to me. however, no reason why that
change should not be made. Even larger
sums than the st2te would be likely TO de-
p0sit In any one Institution are often en-
trusted to banks by private parties, and it
need not be said that loss, more especially
among the well established and approved
banking institutions Of the state, Is a
thing Of very rare occurrence. Properly
guarded. ! cannot think any risk viii
De encountered which the state cannot
wisely accept. The pTaod .e prevails with
authority of law IN some other states. and
more often still With municipalities, and