The Red Cloud chief., 1897-01-15

ItTtlduPIlt StUODl .%ltl,U0t %
Permanent university ............ 1855 So
Agricultural endowment ........ 81. a55 10
Making the total sum of........$ 54. 55S IL
COUNTY BONDS SCARCE.
These several funds, by a decision OF
the supreme court, do not come within
the provisions of the depository law, and
were therefore under the control and
disposition of the state treasurer when
not invested as above provided. and
~unlnvested were OF no benefit to those
who should derive advantage from the
interest in case OF an investment in in
tercst-bearing securities, as contemplate
ed. During the last biennial period but
few county bonds have been issued and
these were chiefly refunding bonds to
take up other outstanding indebtedness.
Hence, II has been extremely dificult
to secure for the state enough county
bonds TO absorb the accumulation OF
these different funds, to say nothing Of
the large amount on hand at the begin
ming OF the biennial period. During the
year 1895. the board OF educational lands
and funds obtained only the sum of $40,-
900, being Otoe county refunding bonds.
bearing interest at the rate of W per
cent. These bonds were obtained at par.
During this time a large amount of state
warrants. drawing 5 per cent interest,
were being issued from time to time.
4 TckdTutu lntse WdTIdnlS dS utSiTdDit
Investments for these trust funds, mas
much as 1t would provide a ready means
for the investment OF the entire sum,
strengthen the credit of the state and
bring its warrants, which were below
par, to par value. and. in effect. put
the state on a cash basis.
WARRANTS AS SECURITIES.
In a decision of tho supreme court,
concurrcd in by all of the Judges. and
found In the 25th Nebraska, at page $50,
II was decided that state warrants were
state securities within the meaning OF
the constitutional provision referred to.
In addition to this. a precedent had been
established by the purchase Of these war
rants under the administration of my
predecessor. Governor Crounse. The SUI
preme court also, On a more recent case.
referred to the first decision above
quoted I'm the following affirmatory lam
guage: we must not, however. be UNI
derstood as holding that warrants
against the general fund ore not state
securities within the meaning OF the con-
stltutfon. Although that question Is not
presented by THIS record. following On re
state warrants, Is Nebraska, $50. and
State vs.. BARLEY. supra, we assume them
to be legitimate investments FOR the per-
manent school fund; but II the state. as
trustee for aid fund. desires TO invest
inthat class OF securities, 1t Is required
to do 90 on terms Of equality with other
Observation-Disclosures OPINION.
Assuming, therefore, that warrants OF
this character were legitimate investment
for this large fund. and as they were In
every other respect n very desirable FORM
Of investment. / introduced a resolution
before the board OF educational lands
and funds, ait a regular meeting In jan
uary, providing fer investment OF $5oO'-
600 OF this idle fund in warrants already
Issued and those thereafter to be issued.
Som doubt was expressed oy some OF
the other members of the board respect
ing the legality OF IN Investment OF this
kind. and. at their request, the reso1u-
tion wal referred to the a~ttorney-general
for an opinion, which was finally rem
dered at the regular meeting in April
following. This opinion was. In enect,
adverse to the decisions OF the supreme
court cited above. as well as 10 uhe
precedent established curing Vhe aur"ln-
istratiop OF Governor Crounse the at
torney-general held that state warrants
were not state securities and were not a
legitimate investment under the proVis-
hons of the constitution. The opinion was
concurred in by a majority OF the BOARD
thus cutting of every avenue TOT a
speedv and profitable investment or this
Another resolution was then introduced
nv me looking towards tho investment
of the unemployed school FUND In United
States bonds. In this effort to ma tue
hest possible Investment after we were
prevented from purchasing state warrants
failed to receive the cooperation OF any
other member OF this board and no In
vestments were made In that direction.
Registered county bonds, the only re-
mainins investments permitted by the
constitution, have been ~rchas from
time to time as reported In detail by the
state treasurer. These bonda have been
purchased upon u basis OF interest or ~
per cent or more. 1t will be observed
mat there was secured for the investment
OF the permanent school funds. county
bonds In the total sum OF y3%5.7h,97. There
now remains of these trust FUNDS, as
ahown by the report of the state treas
urer. tho total sum Of Sos. 55s.h.
A constitutional amendment providing
district warrants. as well as specifically
nxmdn9 state warrants as legitimate In
yestmsnt, was submitted to a vote OF the
people at the last election. but Its adoption
IL az yet meter OF I'M
certainty. think. however. l
can safely assume that In any event the
board of educational lands and funds. as
constituted by the election of the present
officers, will cooperate with me In the
investment OF this fund In the state Sc
curiues mentioned, which. II successful.
will furnish an ample opportunity for the
profitable investment OF this entire fund
Yet. I am Of the opinion that as nearly
as practicable, II would he advisable by
constitutional amendment to make more
comprehensive provisions for the invest
ment and management Of this trust fund,
which is constantly increasing and which
in time will grow to enormous proper
lions. This fund Ii the patrlmony OF the
children of the state. to be invested and
the interest applied for their education.
Such q magnificent endowment IL well
worthy the jealous care n watchfulnes
OF those entrusted with Its custody. and II
10 of the utmost importance that provi'
sions be made for its Investment upon
advantageous terms. and yet with all rea'
sonAble precautions for the permanent
safety OF tho principal. How soon thi,
may bN brought about u perhaps YET
uncertain.
Expenditures In State institutions.
II has been the custom heretofore fol-
each legislature TO mako appropriation
for the biennial period ending with Marcf
81. Section 10 ot article . NJ the constitu'
ton provides that each legislature shal
ms Va apnronrta tiopa far Ana exDenHoa q