Omaha daily bee., 1897-01-08
upHoLDs THE DEPOSITORY LAW.
Faults I'm Its Application Rather Than
Its prlnclnIn.

Its Principle.
The depository law, enacted by the
legislature of 1891, has now been in opera
tlon for a period of time sufficient under
ordinary circumstances and normal con-
ditions to test its usefulness and advantages
or disadvantages as the case may be. The
wisdom and desirability of such a law has
been questioned by many, including those
who benefited by the operation of the
previous law. permitting the state treasurer
to use all funds of the state under his con-
troll for private gain and speculative purposes
during his term OF office. | have been a
warm supporter OF the depository law and
believe in the wisdom of its enactment. 1t
adds new source of revenue to the state
and removes the temptation to use public
funds for any other purpose than that for
which they were collected. The
law itself could be considerably
strengthened and l recommend for
your consideration the advisabilty
of amending it so as to remedy imperfections
which now exist. 1t is to be remembered
that its operation has been during period
when the loss of money, both private and
public, has been very general throughout
the entire country. can see no good
reason why, If the treasurer himself must
give a good obligation for the return of
funds placed in his hands for safekeeping
that the same may not reasonably be re-
CURED of the different repositories. Thus is
obtained a divided responsibility and an
aggregate security that is far better than a
simple obligation for the return of the entire
sum. The obligation of each depository
should be as strong in proportion to the
amount of money secured as can possibly
be had for the entire sum. | am of the
opinion that the law has been abused; that
1t has been used as a means of assisting
banking interests which may have been in
need of current funds for the transaction of
business, when the true rule should have
been to have made repositories Of banking
institutions Of unquestionable standing and
of unquestionable security, with the object
in view of having the funds at all times
subject to the call OF the state treasurer in
the ordinary course Of his business.
| would recommend the amendment of the
law so as to provide that sureties of state
repositories should be others than those
actively engaged in the management of
the depository bank; that a depository bond
should not entitle the bank to a deposit of
state money hereunder for a longer period
than two years; that the state officers
approving the bond should have the right at
any time they deem necessary to suspend.
as depository, any banking institution, and
to direct the state treasurer to withdraw all
state funds therefTom; that the state
treasurer. in the depositing Of state money,
should at all times be under the control Of
the board approving the bond respecting the
amount deposited in any one bank and that
the sureties on all depository bonds shall
Justify by making oath to the value Of their
property over and above their dcbhs and
exemptions. The general government has
found 1t desirable to designate banking in
stitutions as repositories fer funds which
would otherwise accumulate in the United
States treasury, and | can see no good
reason why this same rule should not obtain
in the different states, such repositories be-
ing made not only the means for the con-
venent and expeditions transaction of the
stGte's business, but also a source of in
come to the state.