The Topeka state journal., 1898-02-16
SCHOOL FUND INVESTMENT.

The Chicago Record in furtherance of
its efforts to secure for the country a
system of postal savings banks has
been prosecuting some inquiry into the
manner of investing state school funds
sn a number of states and the results.
This has been done with a view to show
ing how the funds accumulated by post
al banks could be safely and prohtably
placed.
It will perhaps be surprising to learn
that out of a total of % states reporting
to the Record only one shows any loss
and that one is Kansas.
To the papers request for informa-
ton superintendent Stryker replied as
follows:
'sThe state permanent school fund,
amounting to over $6,000000, and the
university and state normal fund, ag-
gregating in all upwards of $4,000 .OOO
are invested by a board composed OF
the attorney general, secretary of state
and myself. The inclOsed shows the
class of investments we are permitted
to make under the law Something like
S25O,000 of worthless bonds are now in
the hands of the treasurer, the property
of the school fund This is due to two
things: First, depreciation in the value
of boom towns in the western part OF
the state; second, carelessness on the
part of those who have had the in
Vestment in charge.
I'VE have now on hand some $250,O0O
which will be invested during the next
week or two; arrangements are prac-
tically completed for all of it. We are
tnvesting mostly in city and county re-
funding bonds. Those now OutStand-
ing draw and z per cent. Those that
we are taking draw 5 per cent"
Commenting editOrially on the result
of its Investigations the Record says:
The great majority of the state gov
ernments are not so efficient as the ma
tiOnal government in the management
of business affairs. What the form
er can do, the latter certainly
should be able to do also. Many Of
the commemorative have had thrust
upon them a duty similar to that which
confrOnts the federal government in
connection with the proposition to es-
tablish the postal savings bank system.
They have had to take charge of the
investment of funds OF large amounts
that are to be forever held in trust for
the benefit of the schools. Most of
them have worked out satisfactory
plans for the safe investment of these
funds. A large proportion follow in
whole or in part the plan of making in
vestment in national, state and munich
pal bonds, which is the manner of in
Vesting savings funds outlined an the
postal bank bill.
Entire satisfaction is expressed with
this plan of investment in the states
having it in operation. In some, nO-
tably Wisconsin and New Jersey, there
has been a development toward this
plan, and since its adoption there have
been no losses whatever from invest
ment of the school funds. The only
state thus investing funds from which
losses are reported is Kansas. The
loss, sustained over q, considerable peri
Cd of years, has been $3.50 600 out of ag-
gregate funds of 81 900, 900, which makes
the percentage of loss about 31h per
cent for the period. The Kansas law
did not contain sufficient restrictions
II permitted loans to new and small
towns to 10 per cent of the assessed val
uation. The investment section of
the postal bank bill limits investments
TO cities and counties whose total debt
does not exceed 5 per cent of the asses
Sed valuation. It also makes impOssi-
ole loans to municipalities of mushroom
growth and small population.