The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-11-16
THE STATES ACCOUNTS
INDIANA CAN BE CLEAR OF DEBT
WITHIN NINE YEARS.
Treasurer SchOIz's Forthcoming Re-
pOrt-The Endowment Fund
Loan to BE Repaid.

The forthcoming report of State Treas
urer Scholz will be an interesting document
to people generally throughout the State.
principally for the reason that it deals with
a project for the reduction of the state
debt in a comprehensive manner.
On Nov. l, 1897 there was 1896, 724.51 in the
treasury. During the year which closed
with the first day of the present month, the
total receipts were $6,99S, 1883, including all
advance payments from the counties and all
transfer warrants. The disbursements ag-
gregated $7549, 25l.13, and in this amount is
included sos, 267.S3 advanced to the govern
ment in equipping and mastering the troops
last spring. The latter item is the subject
of a lengthy recommendation from the
treasurer He holds that if the government
pays back to the State the amount ad-
vanced, it will be possible TO redeem $500, $50
worth of bonds this winter out of a total Of
S4S4,000 which are just now source of en-
barrassment to the State. The aggregate
amount was taken from the permanent en-
dowment fund in 1887 to meet interest
charges for which the State had no money;
$4,000 Of the amount was taken from the
fund belonging to the Purdue University
and $4,000 from the State University fund.
Five per cent. interest has been charged,
amounting to $1,000 to Purdue and 81, 200 to
the State University. The loan was made
under law incorporated in the act Of 1883
levying a tax for the establishment of q
permanent endowment fund for the col
leges, and providing for the loaning of the
money by the state treasurer to individuals
at per cent, with the reservation that
should the state require the money it should
De considered q preferred borrower The
state TOOK the money and transferred it to
the sinking fund and charged itself with
per cent. interest, which il has paid ever
since. While the interest money goes to
the credit of the endowment fund ard is
used to pay salaries in the colleges, Treas
urer Scholz believes it would be a better ar
rangement to have the State pay OF the
debt it owes to the endowment fund and
loan the money out to individuals, who will
De glad to get it at per cent. In this man.
ner more money will be earned for the
fund and the State will be rid of it's most
expensive obligation. All other bonds Of
the State bear 312 per cent.
The question Of paying the bonds, how
ever, presents a complicated state of af-
fairs, About year ago the State made an
efort TO pay the debt to the endowment
fund, but was unable to do so as there was
no one to whom 1t could pay the money.
None Of the university officials were au
thorized to receive it, and the treasurer
was poWerless to cancel the debt although
at that tima the money was available for
the purpose. Since that time the attorney
general has been consulted, and 1t is learned
that the only remedy for the condition is to
recommend TO the coming Legislature that
the money be transferred back to the en-
doWment fund as soon as received in the
general fund. The Legislature will also be
asked to arrange for the distribution of
the money when paid into the endowment
fund by the treasurer, each county receiV
ing portion of it and the county treasurers
loaning it out to individuals at per cent.
After the December settlement the yield
Oh the state debt sinking fund Will be $780,
e00,and ii the government repayS the $685.,
1913 it owes the State for war advances,
there will be enough available to take up
the $4,000 due the endowment fund, and
by the time the June settlement is made
there viii be enough money at hand to re-
tire the temporary loan bonds Of 1889,
amounting to 100000.
The treasurer reports that the State is in
good condition and in q fair way to be alto
gether clear of debt within eight or nine
years, at the most. The only thing to be
feared, in his opinion, is that it may suffer
from outside interference by the Legisa-
ture. Some of the candidates for legislative
Offices have publicly stated that they be-
Ieved the taxes were too heavy and should
be reduced and if some of these Legislators
by SONS sensational effort in this direction,
ii is possible that a bill might be passed
which would reduce if not altogether wipe
out the sinking fund tax, under the pretext
that it is burden on the people. In event
of such course, there is, according TO Mr..
Scholz, no way Of telling how long the
State would have to stagger under a debt.
One thing he is sure OF, and that is that if
the taxes are left alone for a few years,
the State will be in the novel position of
being totally out of debt