The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1896-12-17
INTEREST ON STATE BONDS
OPINION GIVEN OUT BY ATToR-
NEY-GENERAL BISHOP.
Matters of Interest TO Those Who
Hold Warrants Against the State.

Attorney General Bishop yesterday
transmitted to State Treasurer Chapman
an opinion relative to the setting aside
of moneys for the payment of interest
on state bonds. incidentally the treas
urer in his statement gives some in
| formation that may be of interest to
those holding warrants against the
state The treasurer asks:
Kindly give this office your opinion
on the following subject: The law
provides that the state treasurer shall
pay the interest on the various issues
of territorial and state bonds on the
first days of January and July in each
year. and that the sum of forty-three
/ thousand dollars (s43,000) or so much
4 thereof as may be necessary, is appro-
priated and set aside annually from
the general fund of the state from year
to year TO pay the interest on said
bonds.
I'VE wish to be advised if this sum
should be set aside in a separate fund
at the first of each year out of any
funds then in the general fund ac-
count of the state, or out of the first
money received by the treasurer be-
longing to that fund?
During the latter half of the year
the receipts on account of the general
fund are ample TO take care of that
part of the interest which falls due on
the last day of the year, but this Of
flee has no assurance of the receipt of
any amount which will be paid into
the treasury for the account of the
general fund after the first day of
January in each year which may be
applied to the payment of the half of
the annual interest which falls due on
I
pend on the receipt of a sufficient
amount on account of the general fund
to pay such amount of interest ($21,
500 on the LIST day of July, after the
LIST day of January, February, March.
April. May or June in any year, and
the same not be received by him and
there be no funds in the general fund
account, or not sufficient amount,
then the interest on the bonds out
standing would default and doubtless
criticism would fall upon this office.
When. in your opinion, should the
treasurer set the amount necessary to
pay the interest on the bonds aside,
and to what amount?
The taxes assessed for the year 1896
would be received by this office be-
tween now and the 31st day of Decem-
Der, 1896, and we have no authority 10
presume that any will be unpaid.
Should this be the case. should not
sufficient amount be set aside TO pay
the interest on the various issues of
bonds for which these warrants will he
drawn by the state auditor on the LIST
days of June and December. 1897?
Should not a sufficient amount
be set aside for the June, 1897, warrant
of $21 500 at all events?"
The attorney generals reply is in
part as follows:
The real question involved in your
inquiry. which would be pertinent for
this office TO advise you upon. is
whether there are any provisions of
law which would authorize you as
state treasurer to set aside from the
general fund of the state, from year to
year, sufficient amount of money
outstanding bonds of the territory and |
state of Utah, and if so. when such |
amount should be set apart.
The various acts of the territorial |
and state legislatures under which the !
outstanding bonds were issued were |
uniform, in providing that the interest |
thereon should be paid semi-annually. |
In all of these acts the provision re-
lating to the payment of interest is |
substantially the same. Section of |
chapter Il of the laws of 1896, provides: /
The state auditor shall draw his |
warrants on the state treasurer for the |
amount of interest which shall fall |
due on the first day of January and |
July of each year, which said interest |
warrant shall be drawn at least one !
month previous to the maturing of the |
interest and the sum of $4,000 annually |
or so much thereof as may be neces-
sary, is hereby appropriated and set |
apart from the general fund of the
state from year to year to pay the in
terest upon said bonds"
1T will be observed that the interest |
is payable semi-annually, on the first /
day of January and July of each year.
Under this provision, it is the duty of
the state auditor to draw his war
rants on the state treasurer for the
amount of interest falling due on these
respective dates at least one month
previous TO such dates. 1t will also be
observed that the exact amount of the
annual interest has been appropriated
by the Legislature and set aside from
the general fund of the state from
year to year to pay the interest upon
said bonds.
L am of opinion, that it was the in
tention of the legislature that there
should always be a sufficient amount
of money in the hands of the state
treasurer to pay the interest INSTALL
ments as they mature. and the express
sion set aside from the general fund
of the state from year to year clearly
indicates that it is your duty as state
treasurer. to eliminate from the general
fund a sufficient amount of money once.
each year with which to pay said in
terest.
by the expression set aside is
meant. to take out of. to remove from,
SO that it would not be subject to dis
bursement upon warrants drawn upon
the general fund of the state, and when !
so set aside. the. said fund could not
be used for any other purpose than
the payment of the interest upon the
said bonds.
The evident purpose of this legis-
lation is to insure the payment of the
interest on outstanding bonds at the
time of its maturity in order to pre-
serve the credit of the state other
wise, as you suggest. there might be
no funds in the state treasury at the
time the said interest became due To
pay the same, and should such a con-
tingency arise. not only would criticism
fall upon your office, but the credit
of the state would suffer irreDarable
loss
You are therefore advised, that I'M
der the express provisions of laws of
1883, 1890. 1892 and 1896, under which
the outstanding bonds of the territory
and state were issued, it is your duty
as state treasurer to annually set aside,
out of the general fund of the state,
a sufficient amount of money to pay