The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-02-02
SCHMIDT BILL IS DEBATED
BEERS OF THE GREATER
HOUSE.
COUNTRY BANKS WANT A SHOW
And Point to the Sum of State Funds
in Suspended Banks in the
Cities.


representatives. yesterday, when all
hour or two was given to discussing
ntoney-the individuals money in gen.
eral, and the states money in partic-
ular-and, at the conclusion of the dis
cussion, 1t was the expressed view Of
the members that the time had been
we'll spent. The debate was largely
caused by Representative Schmidt, Of
Duluth, who introduced, some days
back, q bill to create a board of the
state officials, to wit, the governor.
state auditor and bank examiner
whose duty it shall be to name banks
which shall be state repositories. They
are also to provide that the interest to
be paid, regardless of the rate to be
paid, by the repositories, shall accrue
to the state treasurer; that at no time
shall the said deposit exceed 20 per
cent of the paid-up capital stock of
any bank, and that, when the treasurer
has complied with the law, he shall not
be held responsible for money in suci;
repositories
The point is made by the bill that,
under the present law, the state treas
LILY is, 10 all III the Edf1QS
Of the bondsmen of the treasurer
When the matter had been fairly
launched, the friends Of the country
banks rallied to the support of Mr..
Schmidt, and alleged that these smaller
institutions had been Disseminated
against by the state treasurer in the
interest of the large banks in the cities,
the officers of which constituted a large
part of his sureties. Immediately Mr..
Schmidt had made a brief explanation
of his measure, the fun commenced
first in the shape of amendments. Rep
resentative Ferris making the first,
namely, that the bill should require
at least 2 per cent interest. Repre-
sentative Scott then made the motion
which, at the end, was put and carried,
that the bill, as amended, be sent to
the banks and banking committee.
Mr.. StockweA. of Hennepin, ex-
pressed the belief that the passage Of
the bill would relieve the state treas
urer of all responsibility for money i,
the repositories, in which he was
warmly seconded by Mr.. Jacobson, OF
Lac qui Parle, who Interposed the
most strenuous objection to the bill.
The motion of the Ramsey member
brought Mr.. Schmidt to his feet with
the statement that the bill had. in the
first place, been sent to the proper
committee general legislatfon), hal
been reported for passage by that COM
mittee, and that any further reference
amounted simply to a delay. He urged
that the bill contained every safeguard
in the present law, that the state would
be, as row, the preferred creditor, and
that the system proposed in it was
practically the same as now in force
IL, .A,-s@
rot the treasurer, has the designation
Of the county repositories. Here is
Where Mr.. Jacobson came in. In the
high-pitched forte voice with which
he is wont to discuss important mat
tiers, he attacked the bill, evidently
nett1ed by the calm defense Of it made
by its author.
Il want to call the attention Of this
house, he said, that if the bill passes.
the state treasurer will not be re-
sponsible for a single dollar in these
repositories. By this one act we will
relieve not only him, but his bonds
men, from the slightest responsibility
for the moneys he Is supposed to have
under his control. I also want to state
that if the state treasurer had done his
full duty the state funds would not
now be In their present condition.
There are over 100 country banks that
could give bonds which could be col
lected, and they are willing and anx-
fous to get the states money ON de-
post, and pay per cent for tts use
too. The money had to be kept in the
city banks, which are almost, If not
always hard up, and If there was any
money ON deposit in the country banks
it had to be withdrawn to add the
city Institutions"
Mr.. Jacobson said this was no new
measure, but that the legislature had
to meet the question bienr1talIy. in
the form of relief Of the state treasurer.
He could not blame that official. he
explained; he too would probably want
the law changed if he were state treas
urer, but there appeared to be no
trouble about getting men to take the
Office, as Mr.. Schmidt had suggested
there might be. up to this time" he
said with dry sarcasm, there has
never been need to enforce a draft-we
have never lacked volunteers" Going
back to first principles, he commended
that the trouble was that the funds
were not deposited in the country but
in city banks, in proof Of which he
stated that while $3.50 900 of the state
funds were tied up in suspended city
banks, there was but $4,000 caught In
the rural establishments He moved
am indefinite postponement of the bill.
Mr.. Fefg who had hitherto listened,
asked: Has the state lost any money
under the present SYSTEM"
Mr.. Schmidt-No, believe not There
are several thousands tied I'D, but
there has been no loss so far
Mr.. Feig-In case the provisions Of
this bill were in force and the same
bank failures had occurred. would the
state have lost amy money?
Mr.. Schmidt suppose Il would:
but 1 refuse to argue the matter In
this cross words manner
Again did Mr.. Schmidt review the
good points in his bill, whereat Mr..
Donnelly entered a mild sort of op-
position by calling attention to the
TACT that at some future time there
might be dishonest board, and the
state would have absolutely no security
against their turning the funds out
in the most reckless manner. Mr..
Feig was opposed to the bill; he said
with considerable warmth that the
present system was, in his opinion all
right. but that under its operation, not
the best banks, but the banks with a.
political pull were favored with the
states coin. Mr. Schmidt argued the
same fault with the present system as
being in favor of his bill, and referred
to the criminal action brought against
Charles Stuckey, Of Duluth, which
brought out the facts about the State
'e~ith VI IHdI CfIys III WHICH, the state
had $4,000 en- deposit, Of which 1t has
been able to regain only $1,000.
Mr.. Abbott spoke in favor of the
bill and against the law which makes
the state a preferred creditor, saying
that 1t made the state a tyrant and
robber Of the smaller depositors.
After more general discussion of
minor details, Mr.. Scott renewed his
motion that it be referred to the banks
and banking committee not to loao a.