Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1895-01-18

when interest account could be re
5 duced by their conversion is no
rational. Particularly is this true O
the State whose credit is supreme ant
whose pledge ultimate liquidation j
beyond distrust, secured as it is b,
positive yet immeasurable resources.
With the audited outstanding in
|, debtedness, $685., 1880, On Octobe
81, 1892, the treasury contained $I45,
6l099 in cash. October 81, 1894, tn,
treasury balance WAS $275, ,S9017, anC
the audited debt was 81 1,307 ,322 04
Looking backward to October 81. 1890
the treasury balance was 35,738.17
and the total debt 1915 O0624. Thu.
in four years, while the floating deb
was swollen by $932,4 the de
posita unavailable for the partial
extinction of the interest debt in.
creased by $240,052.
The following comparisons are COM
piled from audited reports:
| Interest paid
on redeemed Cash
Debt. warrants. on hand
October 81, 1890 s57j jOo6 "a s32,342 "a $3j7 Il
October 81, 1891. 4S0.625 81 26.l40 o. 6S.42i 81
October 81, 1892. SIS 900 % 5O0s2 3s 1860 ~
October 81, 1898. S75.022 q 55.155 43 26264l ~
October 81, 1891. SO7 ,32a Of 66s6l 29 275s9O IL
1t will be observed that an unpro-
ductive cash deposit is made by law
to increase steadily as receipts shrink,
while the public debt is Initiating con-
versely as the revenues contract.
Interest accretions could be lessened
and restricted to a minimum by turn
ing the idle money from all save the
bond interest fund into the general
fund for the redemption of warrants
in rotation.
INVESTMENT OF THE SCHOOL FUND.
OF the $4S6,000 in bonds offered for
sale during the two years past, the
board of State Land Commissioners
accepted 1864 500, subject to approval
by the Attorney General, who sane
toned the purchase of $l47 500. Since
October 3lst, an additional purchase
of $5S 900 in county bonds was made,
leaving about 100000 of uninvested
school funds. Opportunities for proper
investment OF the school fund are
inadequate. The State is at an in
I sHFmeaatable disadvantage in the
matter Of obtaining the most desirable
bonds. 1t cannot cope successfully
NTH the professional bond buyer, who
operates in person with the authori-
ties empowered to open and consider
bids. On gilt edge issues the State
invariably finds its offer triile under
the price at which sale is made. AS y
last resort, other markets failing, the
State is expected to convert the school
fund into securities incapable of en-
during the test of legal and financial
scrutiny. Relief from this embarrass.
ment lies within easy reach. The
school fund should be allowed to re-
volve through the s per cent. warrants
drawn against the general iund. Thus
unremitting Use of the surplus at an
interest rate exceeding that of bond
investments by more than 2 per cent.
would be assured.
No constitutional amendment for
this reform seems to be required. Sec.
OF art. xvi, in its first clause distinct
ly defines inhibition against the
investment OF the school fund
"to private persons or corpora
tions" and secondarily leaves the
matter open to the discretion and
wisdom of the Legislature, by declar-
ing ait may be invested in national,
State, county or municipal bonds" "
No mandatory Introduction, except as
to the two classes of investors specified,
is discoverable. Manifestly, 50 long as
the school fund remains permanent
and irreducible, and is not loaned TO
private persons or corporations, the
Legislature may provide for its lucra-
tive conversion through the general
fund of the State. 1t should be the
purpose to employ these moneys con-
stantly with profit, while insuring
their immunity from losses by forfei-
ture or deterioration OF security. and
no safer medium for steady sccumula-
ton from use could be devised than a
law authorizing investment in State
warrants.
REVISION OF THE REVENUE LAWS.
In remodeling the revenue laws it
will become apparent that the deeper
cause Of the disproportionate subsi-
dence of estimated wealth underlying
trade and Industrial reverses is trace
able to the application OF the high
assessment, lowlevy principle. Over
zealousness in creating and maintain
ing excessive local valuations has been
seconded by the wholly deceptive
notion that taxes are rendered less
burdensome when the levy is mini
mized on maximum assessments. The
false yet common tendency has been
to appraise real property on the basis
OF cost or price-at what property ex-
acted at speculative sale, or theoreti.
cally, should bring if sold-rather than
to adjust assessment on the basis Of
actual worth, in money, as determined
by utility and not by caprice. Once
the latter plan were adopted, though
the levy, fashioned to the revenue
needs, became specifically higher, the
further and beneficial effects would be
more equitable distribution of taxa.
ton, less perturbation OF property
values, a contraction of the delinquent
lists, and greater encouragement to
those processes OF investment and de-
velopment that are permanent and
not speculative in character.
From the County Auditors reports
1 have procured for the purpose of
informing the Legislature as to the
tren of extravaganza in government,
it appears that the annual outlay for
the assessment exceeds $l06,O00.
Assessment of real property is too
frequent, and therefore too expensive.
The public interest would be conserved
by extending the period of this assess
ment from one to two years.
In the line of curtailing cost, facili-
tating collections and expanding the
revenue, the latitude of indirect taxa
ton should be extended at once, in
accordance with the successful expert
ments OF those States having well
grounded fiscal policies, and the
stoutest resistance should be made to
the interference of lobbies inimicsl to
this reform. The tax most easily
collected is the least burdensome.
The transfer or inheritance tax
system of Eastern States should be
studied with view to adoption.
Temporary provision for semi
annual collection of the tax levy or