Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1898-10-28
PHILLIPS, RECORD.

/
When Kirk Phillips was inaugurated
as treasurer of this state he found the
treasury practically bankrupt, only
about 81 1000 being found on hand. He
Immediately sold $3.50, 600 worth Of
funding. warrants There was no pre-
tense of a necessity for selling so large
an amount of funding warrants. There
was no such sum necessary to meet
the obligations of the state. At the
same time he sold 100000 worth of
school bonds to make good the money
stolen from that by Taylor. just how
the state could be reimbursed" for
money stolen by borrowing money on
the credit of the state is specimen of
finance which can only be thoroughly
comprehended by such financiers as
Kirk Phillips. If John Smith steals
800 from Peter Jones, all Jones has to
do is to issue his bond and borrow 500
to reimburse himself. Taylor stole
500, 1000 of the school money and Phil
! lips, to reimburse" the state, borrows
$10O, 900 on the credit of the state to
make it good! And this is the man
who is held up by the Republican press
as the greatest financier Of modern
ages.
The constitution provides that the
only use to which the permanent school
fund can be put, is that it may be
loaned upon real estate or invested in
local school bonds. Thus Phillips is
placed in the position of borrowing
800, 600 on the credit of the state for
the express purpose of loaning it on
real estate or investing it in school
bonds. Was not that fine financial
problem? But the fact is, that money
or a greater share of it, has been lying
in the banks ever since that time, as
there is no demand for school money
to be invested in real estate loans or
local school bonds.
Although Phillips found an empty
treasury on January l, 1896, the state
auditors report of June 80, 1895, shows
that he had on hand in the banks
$500, ,489. 81, every dollar of which was
borrowed money-borrowed on the
credit of the state for the express pur-
puee of being deposited in the banks
that Phillips might draw interest on it.
We say that this vast sum was practi-
cally all borrowed money, because the
receipts of the state between January
| 1, 1895, and June 80, 1895, including
that which was received from Taylor,
just about paid the expenses of the
state, and this balance of 1920, ,4s9. 81
about represented the amount which
Phillips had borrowed during that
| time.
The auditors report for the year
ending June 30. 1896, shows that he
had on hand $414,79O.1O. The state
auditors report for June 80, 1897,
shows that he had on hand $4O7, 744.s6.
The state examiners report for Aug.
| 1, 1898, shows that he had on hand
over $499. 600. Thus for the past four
years Phillips has had on hand in the
various banks in the state and in Chi
cago, an average of more than $780,,
600, the greater share of which was
money which Phillips borrowed on the
credit of the state for the express pur-
pose of piling up in the banks for his
own enrichment.
That he has been drawing interest
on this vast sum is beyond any ques-
ton. Indeed Phillips himself has not
dared to deny it. The deposition of
the Gather of the Dokota National
bank is conclusive of the fact that he
did receive interest on the deposits in
that bank It is said that the rate of
interest which he has received upon
most of his deposits in South Dakota
has been per cent, but we will call it
per cent. That rate upon $400, 900
means $12, 900 per year, or $48, 900 for
the four years. Every dollar of that
interest money belongs to the state of
South Dakota. This has been decided
by every supreme court in the United
States which has passed upon this
question. It was 80 decided in Iowa in
the case against Treasurer Rankin. It
was SO decided in Wisconsin in the
suit of that state against Ex-senator
Sawyer, one Of the bondsmen of the
state treasurer, and the state actually
recovered from Senator Sawyer $780,
900 as interest money taken by the
treasurer upon deposits of state funds.
Senator Sawyer appealed this case to
the supreme court of the United States,
and the decision of the state courts
was affirmed.
The necessity of this law as laid
down by the various supreme courts is
well illustrated in Phillips case. If
that were not the law, holders of pub
lie funds would purposely do just what
Phillips has done, namely, put the
state to all the expense possible to pile
up funds for them to draw interest on.
But we notice that Mr.. Phillips must
account to the state Of South Dakota
for every dollar which he has received