The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1893-12-07

tSFGSTMEAT OF SCHOOL kCSD&
False Aeersssssas Against the state
LAnd Commissioners
OLYMPIA. Tee a--f Special What p7r-
port 20 Be The statements Of m zrknox q
Seattle correspondent. puslisned In the
Tacoma Ledger 81 this morning, are maui
testify compounded Of ignoranee and
rnaIice- Ii il therein charged thas IN the
performance Of their casses - conssTva-
tors Of the permanent school funds the
present board Of state land commissioners
have refused 70 invest any OF thoss funds
in bonds In order that certain banks In
which the moneys we're placed might b
favored by .hs indefinite extension OF
these dsYoait. Before specifically r.
plYing TO such an irresponsible and
wholly unjussieabls accusasicn il 10
necessary 20 state SONS general facts.
Within the constitutional limitations the
board Of land commissioners may order
the Investment Of such school funds La
national. state, county or m1nicipai
honda Under the Law. and IN the exes-
else OF thsir findings, is should Be proper
for the board ia make such investments TO
the very best advantsgs for the state Be
yond the consideration o; the tender Of
bonds, the ascer,ainment by comparison
and negotiation Of the most profitable and
securs purchases, and the procurement OF
the requisite legal approval Of the validity
and vorthiness Of the issue. the
land commission have no other
control over the school funds than
virtually to certify to the auditor
Of state their acceptance Of the bonds and
their approval of the issuance OF warrant
for the amour, of purchase. From the
auditor the purchaser goes 20 the state
treasurer and receives his money. OF the
places Of deposit used by the s-ate treas
urer the land commission personally OF
officially has no more knowledge than any
citizen in Tacoma
The animus Of the Misrepresentation
contained in the Ledger correspondence
may be traceabIe to certain brokers who
dIeraen with the state In the sale of bonds
of which they wished TO be quickly rid in
order 70 obtain additional commissions or
for other purposes Of profit Shortly after
the present land commission came into ex-
istence there was presented TO il q PROPOSE
ton from bond brokers ~ Tacoma to
purchase $4,000 Of 5 per cents OF
Snohomish county road and bridge bonds.
n
were about $4,000 OF school funds de-
posted among the banks OF Tacoma. Sc
attic. Olympia and Vancouver. the princi-
pal officers Of which were sureties on the
bond Of the state treasurer. The financial
crisis was a. its height. and banks were
failing in all directions. A crushing
sense of the insecurity of banking institu-
tions weighed upon the commercial life of
the state. Three considerations actuated
the board in rejecting the offer of the
brokers Of the Snohomish bonds: First
That to enter at that time upon the pur-
chase Of bonds would imperil the soivency
of several of the state banks, the ruin of
which would entail disasters to the credit
OF the state and infict personal in
juries Of q far-reaching and irremediable
character. Second - The hagglIng offer
of the brokers was not satisfactory at all.
Third-The commission had decided that
hereafter when the state purchased bonds
the board would endeavor to buy them di-
rect If possible from the source of issue.
so as to save the commissions TO the tax
payers. The board was further prejudiced
on this case by having been privately in
formed that the sale of the bonds to the
state under any Of the conditions pro-
posed by the brokers meant to them a re-
ward of S. 900 from the taxpayers Of Sno-
homish county without the knowledge or
consent of the latter. In disposing OF this
proposition, therefore, the board on June
. adopted . resolution that, lin view OF
the present condition Of the money market
the board of state land commissioners
postpone the investment Of the permanent
school fund IN bonds for thirty days"
The next offer received by the board was
of date OF July L. II came from Oscar +.
Rea, chairman of the board Of directors of
school district No. "a at Everett. He had
been authorized to offer SIS. 900 8 per cent
twenty-year school bonds. The matter
was referred promptly to the attorney
general, and on July Is he returned to the
board bis opinion that, while he thought
no more appropriate use could be made Of
the school funds of the state than to in
vest them in the bonds of school districts,
he declined to advise the board that.
under his construction of the constitu
tional provision, school bonds could be
bought as municipal bonds. Ii the board
had desired not 10 invest the school funds.
IL could have refused the Everett offers on
the ground taken by the attorney general.
Far from mantfesting any such inciina-
ton and, on the contrary, in order TO aid
the school district interested in con-
summating the sale. the board on
August l made proposition to Mr..
Rea TO purchase the $50, 600 of Everett
school bonds at par. On this favorable
action of the board the attorneys for Mr..
Rea went before the supreme court. and
finally succeeded in obtaining a favorable
decision, which enables the board here
after to invest in school bonds il they
choose 10 do so. without question as TO the
constitutionaIity OF their proceedings
This decision was not handed down until
short time ago Immediately the form
of bond aud accompanying data of pro-
ceedings Incident thereto were presented
To the attorney general for his opinion as
TO their sutficiency, precaution which is
essential, in ali cases of purchase, and
upon receipt OF his declaration that the
issue was legal as TO form and method, the
fac. OF purchase was certified to the audi
tor of state. and warrant Immediately
issued TO the Everett school district for
the sum of SIS, 900. The Everett bonds are
now par, OF the permanent school fund
securities of the state.