The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-10-12

for governor. NAY cEsckzy Dc Scown ~
reference 20 rae corSzSutzasn and sAe
ssArutes OF the s.Ase 90 Washington and 20
the tacss oe record which are open 10 al
Men-
Mr., Rogers charret .. Csehasss. Accord
tng 10 your special cspAtcA frczn That
place. rs1at the <cAccl fund had hsen
manipulated FOR re prcHs % cs-eaa1
hanks wAieh have pull xsth she state
ot1czais. and that the state Lard connrEs-
Ing STaAao9 n S-ase warrants q; par, wssca
are now worth Gay - cecsx"
Il vas hardly reAscnAase Tor Mr.. Rogers
20 assume 40 BE mast have done. that no
one knows what the exact Amounts Of the
eehcoi fund have e<en ard are when ne
said they average si5a ase and that SIT. so
S=s AZ me $sSAAN hare been invested And
u - No compliment 70 the inte@ageSce
OF ms audiences 70 think that they would
bAaieve chat X sf-s.aae have been in
vested in state warrants 1T rnrt then ILL.,
80 have been iosR 20 the state because war
rant buyers are now ofezanG only - cents
on the dollar. and that therefore, the
state OF "Wzshingscn win Esos redeem
these warrants 81 par" Docs ae mean TO
kapsy that the oeA<e % 20 lost to honor
that IL VII not pay 30 cents en- TIE dollar:
M. Kcge<U must know thar not only the
warrants but the aonts owned BY the
state And al the other property IN the
state has shrunk IA sailing vzsge. ard very
iarEeay since the passage % the Chicago
Ss1 rneSe Mr.. Rogers Is not swing them
The fAcss are these:
The constitution. A-esc,e XVI. section s
oec4&rce that "none OF the permanent
school fund shall ever be loaned 70 prf-
vase persocD o. corporations. but ID uxzy
b invested IN rAttcrsai. state. county or
municipal honda" TIE successive land
= r~pf a. ~ -
Is. $50 OF he state have embodied tho
constitutional provision win tire prosiso
that such bonds purchased shall bar rot
ess than per cent interest annually. =
The purchase Of United States bonds has
necessarily been out Of tie question be-
cause Sne4r rate o. snterest has been less
Tran the statutory rate.
Cntil the passage % the act o. March -
fEe. The state land commission, created in
isso and IN iSss. bought al the county
bonds. giving sussctens interest and secur-
ity. for which they had funds available
and which we're approved ~ to their le-
sality and validity by the presen, aitor-
Mr. Rogers. In some Instances the stale
was unable TO buy county bonds. either
because TIE attorney general did not ap-
prove the bonds or because bond brokers,
who could offer premiums or ether induce
nents. while the state was confined BY
law 10 q par bid. secured the bonds. This
matter was fully stated on pages IL TO Is
OF the printed report Of the board made
10 the legislature last year.
This state OF things led 10 the gradual
accumulation OF very considerable fund
0lI.S4s1 April l. 1850. and placed the
state practically q. the mercy OF bond
brokers II IL wanted 20 buy honda. The
best purchases that could be made from
brokers n = rule did not exceed 81 Per
fr~f r. oxft~ - 49, ~
has managed up 20 date TO secure SIS. $50
worth OF cotSsy ard school district bonds,
which latter we're decided By the supreme
court 20 come under the head OF munich
pal bonds in the fall OF 1884
II Mr. Rogers WI refer TO Gov. Me-
Graw's message to the legislature OF 1893
he VIII ind that he says gage ID:
''Of the $4ss.GH N bonds offered for sale
during the svo years past. the board OF
state land commissioners accepted 81. so,
subject TO approval by the attorney gem
ersi who sanctioned the purchase OF yi47.-
sea Since October 81 an additional pur-
chase Of $500 In county bonds was made.
leaving about 500. 90 OF rninvessed school
funds. Opportunities for proper invest
rnent Of the school fund are inadequate.
The state r. At an insurmounsahle disad-
vantage In the matter OF obtaining the
most desirable bonds. II cannot cope sue
cessfuily with the professional bond
buyer. who operates sn person with the
authorities empowered 10 open and con-
s;der bids. On E.is-edxe Issues the state
invariably finds its ofler q tride under the
price 81 which sale II made As las, re-
sort. oshsr markets. failing, the state Is
expected TO convert the school fund into
securities Incapable OF enduring the test
OF legal and hnancza, scrutiny Relief
from this embarrassment lies within easy
reach. The school fund should be allowed
81 ~t~aA
rants drawn against the general fund
Thus unremitfine use OF the surplus at an
interest rate exceeding that OF bond IN
vessmerts by more than per cent would
be assured"
No constitutional amendment for this
reform seems TO De required Section OF
article XVI. IN is FIRST clause 6fstiac.iy
defines snhs5f.oas agzsnss rsse investment
OF tbs school fund. ito private persons or
corporations" ana secondArsiy leaves The
matter open 20 The discretion and wisdom
cs the legislature. sy declaring. ut may
De invested n national. state county or
municipal honda" No mandatory inter
dscti5n. except as 20 the two classes OF
investors specified. is d!scovsrahe Mani
festiF. 80 long As the schoo. fund remains
permanent and irredacgble, and IL no.
loaned 20 private persons or corporations.
The legislature may provide Tor Its iuera-
tive Conversion through the general fund
% the state Il should be the purpose 10
employ these moneys constantly w!Na p~o-
az. while insarfng their immunity from
losses by forfeiture or tstersorz ton OF &C.
curity. and no safer rne6sum FOR steady
accumulation from Use eculi Re devised
than law authorizing investment ia state
warrants
This - the view taken BY the ierissasurs
Of which Mr.. Rogers was . member. The
swollen condition os the school fund at mat
time, March. fxs. the irupos~o;fify OF Sc
curing enough u the classes 0. bonds sn~-
csfed In tire constitution. the tsreafs o.
the bond brokers fne aroun, Of hana.
already purchased. the fact ia, som. Of
THE counties were de-a1,f4ng on Their In
ssress- the Imperative nee: OF supplying a
safe means OF investment. al these ana
more facts we're presented 20 the l~xs~a-
rure % ISIS hv the commission, ard a
clause vas inserted In the law nss=es
March y. 1855. which permitted the carn
MISSION 70 invest the permanent. school
fund IN state warrants
What has been ne RESULT No. .hs .sa
vesimenr Of t17s.nso in warran,s AZ ca,
which are now worth only 20 cents" a.a.
he Investment since Agrll l. is-s xh@,
me present board organized. OF r1s GA "a
at which 40 were bought 5y rae
state a. par wfsn professional warrant
buyers we're paying a premium OF Der
cent. saving he STATE E.x's.ss on the cur
c1ase.
Algnt here let me cal ass-nrlon to ,as
fact that state warrants have heen stsas
ily sold o; a premium antl August / ,A.t
when ne SINAI investors wFso had s-e-n
n ne habit OF haysnx warrants rsow re-
fused 20 Go So giving n many cases as a
eaSon tn@&r fear % PcpastSt ssscc@sx