The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-02-02
THE STATES MONEY.
A Proposed Bill That Needs Careful
Consideration.

There is a bill in the senate and it has
also been in the house which proposes
to radically change the methods of
handling the states money. This bill
certainly on the face of it appears to
be full of holes.'' If there is any one
thing Kansas people are particular
about it is the proper handling of their
state funds Years ago they had some
experiences which were dearly bought.
In the state treasury today there are
probably three-quarters of a million
dollars of worthless bonds, but it is
worthy of note that under the present
law passed some eight years ago Kan
sas has not lost a dollar. This expert
ence, good and bad, goes to show that
the legislature should be careful in
has proved a good one for the state. If
1t is to be changed, it should be done
with care and only after new bill is
put to a thorough analysis.
This bill proposes to loan money to
any banker in the state who makes the
highest bid for any portion of idle state
funds, which are to be divided into
twenty parts and auctioned off. The
lowest bidder may be the best bidder
and the highest bidder may be the
worst.
What does the state of Kansas care
for some little margin of interest
against the absolute security which eX-
lists now? This new bill proposes to
loan the states money to banker who
township, county or state bonds. To be
sure the bankers have the privilege of
depOSiting state or government Secur1-
ties. but inasmuch as they now have
in their vaults, it is said, a large num-
Der of municipal bonds purchased be-
low par, it Is apparent that they would
let go of these before they would gov
eminent collateral. This proposed law
provides that the governor and the at
torney general shall approve the city,
township or county bonds which are
proposed to be put up as security for
the states cold cash.
The state treasurer is under million
dollar bond for the safe keeping of this
money, a part of which may be placed
in some short grass country bank on
the order of the governor or attorney
general who are not under million dol
lar bond. One feature of this proposed
law is that it permits the treasurer to
F.. retain for current business only about
$4,000 a day while the state treasury is
often called upon to pay out $4,000 to
800, 900 a day and under certain cir
cumstances 100000 or even $500, 0OO.
State Treasurer Grimes, upon being
asked by a Journal representative, eSti-
mated that the state would secure less
than $40 900 annual interest from money
so loaned. He states that at present
saved from $4,000 to 100000 annually
because the banks charge nothing for
expressage of money or for making coll
Iections on drafts sent by the various
county treaSurers to the state.
Whether the people of Kansas need
any new law on the subject is a QueS-
ton of considerable doubt but if a new
law be enacted it certainly should make
every dollar in the treasury safe as
it is now, and should not permit any
of the funds to be dependent upon the
future validity of certain township
county and city bonds, thought to be
good by the governor and attorney gen.
eral at the time Of their inspection.
Under the present law the state treas
urer is not permitted to deposit any
cash in any bank and he will not ac-
cept from county treasurers any drafts,
so that if a draft forwarded by a coun-
ty treasurer is on bank which fails,
as was the case in the First National
state loses nothing. Lyon county lost.
The collection of these drafts is placed
with certain banks who temporarily
have the funds from the proceeds, and
who secure the treasurer personally by
heavy bond the state being secured in
turn by the treasurer's large personal
bond.
Under the proposed law the state
treasurer might find himself in the posi-
ton Of calling, for instance, upon the
Russell bank which has just failed, for
funds to transact the states business.
The treasurer says he believes in the
principle that the state should receive
some interest on it's idle money, but that
nothing should be done to lessen the
present absolute security, nor to hamper
the transaction of the states business
II regard the bill,' said Treasurer
Grimes today, "as a dangerous measure
and if it goes through as proposed do
the Office of state treasurer so insecure
will be the states money and so great
the liability of the treasurer's bonds
men,"