Bismarck weekly tribune. [volume] (Bismarck, Dakota [N.D.]) 1884-1943, 1893-02-17

n. va AAVCAOoV ~ IcCCkvCus
Inc bonds having been purchased by said
BOARD or university and school lands so as
10 net the state 4 per. cent. per annum on
the entire amount invested; that Is to say,
the face value of the bonds with the prem
iums paid added thereto. The entire
mount Of bonds purchased from said
paid to said Fulton & Co. Is $5l,3 1885, As. In
regard to charges In said editorial that the
principal part of the bonds were bought
under a contract with +. r. Fulton & Co.,
this committee finds that the only contract
entered into with snid Fulton Il Co. was of
date June, 1891, and in which they con-
tracted to furnish the board OF university
and school lands bonds of the face value
Of $4,000 to net the state 4 per cent. IN
terest: And no exclusive contract with +.
II. Fulton u Go. or any other firm or per-
SOn exists.
Another charge in said editoria! is,
That the board Of university and school
lands did not go upon the open market to
purchase bonds, on the contrary we find
that said board has purchased from school
districts within the state and other holders
OF school bonds exclusive of said Fulton &
Co.. bonds to the amount Of $124,O 84. 10,
upon which a premium of $20,6lS.O9 has
been paid. Several of the districts selling
bonds to said board at 4 per cert. flat, that
Is, no premium being paid thereon. A
member OF this committee visited the city
of Grand Forks and made IN examination
OF the records of +. r. Fulton & Co., where
IN 1t appears that Of the entire amount
OF bonds purchased from said Fulton &
Co., $ll6,90O. 90 were obtained ny them from
eastern holders at heavy premiums based
on eastern rates OF interest, this applies to
all bonds dated prior to June IL, 1891.
And several large issues contracted prior
to that date and issued soon after. Bonds
dated after June IL, 1891, were by them
bought direct from districts at premiums
ranging up to Is per cent. In reference
to that part Of the editorial in regard to
Colonel j. 3. Power, selecting agent for
the board OF university and school lands,
after consultation with Colonel Power
and an investigation of the records of this
office, this committee is Of the opinion that
c%essive. This committee also finds that
Mr.. Gregg did not receive double pay as
implied in said editorial. That the records
show that while at work for the board of
university and school lands he did not re-
ceive compensation as a clerk in the au-
ditor's Office. This committee finds that
while Fred w. Cathro was acting in the
capacity Of deputy state superintendent Of
public instruction at a salary Of $l,5OO per
annum did receive. by resolution of the
board, $500 for two years. services as clerk
OF the board of university and schOOl
lands. MI. CathrO came before this COM
mittee and claimed that he was entitled to
this extra compensation On account of the
great amount of work devOlving upon him
In connection with school land matters.
Mr.. CathrO claimed that he was frequently
compelled to continue his work outside Of
Office hours. In response to q request, ex-
Governor Burke appeard before this COM
mittee, and his attention was called to the
charge In said editorial as to 500 received
for his services. MIR. Burke claimed that
he had paid out Of his own pocket about
$1,000 for clerk hire and stenographer over
and above the amount allowed by law for
the executive Office. That his position as
president of the board of university and
school lands neceSsitated much CORE
sp0ndence. and that helhadIfgured that the
proper proportion of the work done for the
board of university and school lands by
the clerical force in the executive Office
he had so stated to said board of university
and school lands, and said board by reso-
luton duly authorized the payment of
necessary clerk hire"
In regard to the other matters of clerk
hire mentioned in said editorial, we find
the amounts therein to be substantially
correct. While this committee recognizes
the fact that a very large amount of cler-
ical work has been done for the board of
university and school lands, it is not pre-
pared to state whether the work could not
have been performed with a lesser clerical
force.
In regard to the charge in said editorial
that there has been improperly used q pOr-
ton Of the interest and income fund to de-
fray the expense Of selecting lands, adver-
Using, etc., we believe this to be a fact;
but that no appropriation having been
made to cover these expenses, no other
funds seemed available. The author
ity of the auditor, however, to issue war
rants on this fund, is contained in section
IL. chapter IS, of the laws of 1891. The
legislature should, in the opinion of this
cient to reimburse this fund, and an
amount sufficient to meet like expenses in
the future. This committee finds that a
large proportion of the amount of pre-
miums paid has been drawn from the in
terest and income fund.
1t is the opinion of this committee that
under section 1854 of the constitution of the
the bonds purchased should not have been
paid from the interest and income fund
and that the amounts so paid should be
charged as part of the investment to the
permanent school fund and credited to the
interest and income fund, and as the in.
terest falls due and is paid a prOportiOnate
amount sufficient to liquidate the premiums
| pnlu ollOulu UO ClCulGCu W VlO pol 0AlC
school fund, 10 that when the bonds be.
come due the amounts so credited will
equal the premiums paid at dates of pur.
chase.
In reference to the ACCESSIBILITY of the in
vestments made by the board of university
and school lands. this committee had be.
fore it prominent financiers from different
portions Of the state, the general impression
was that owing TO the limit placed upon the
board Of university and school lands by the
law as to the investment of school funds
and the fact that fOur.fifths OF the proceeds
of the sales of lands are secured by con.
tracts of sale, it is not deemed advisable tt
invest the remaining One.fifth in land
securities, and from the fact that these
bonds were largely held by eastern in
~vestOrs, and nnless so purchased, the money
must have remained idle in the hands OF
the state treasurer, and the further fact
that the bonds of the state have been sold
at a premium that nets the investor So per
cent. per mum. The board of university
and school lands were justified in the in.
vestments they made. In regard to
the charges of collision between the mem
bers of the board of university and school
lands or their agent. the state treasurer,
and Messrs. Fulton & Co., this committee
is, after a thorough investigation, entirely
satisfied that said charges are without
foundation. This committee las a CON-
municatiOn from f. II. Fulton & Co., in
which they state ''the state has our con-