The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1900-10-17
THE LoAN1NG OF STATE FUNDS.

!
BILE financial ruin being wrought.
THE LOANING OF STATE FUNDS.
| On Nov. 6, election day, the voters Of
Minnesota will be called upon to vote for
or against an amendment to section six
stitution. AS this section stands at pres
ent it provides that the permanent school
and university funds may be invested in
the bonds of any county, school district.
city, town or village, provided the entire
| bonded Indebtedness of the applicant
county, school, district, etc., does not ex-
| coed per cent of the total assessed valu-
alton of all their taxable real property.
The bonds so purchased are to bear 3
per cent interest annually.
The amendment now submitted provides
| that the state board of investment may
make such loans to the extent of Is per
cent of the assessed realty valuation, so
that 1t increases the power Of the borrow
ers very materially to obtain state loans.
This is one of the most important ques-
tons the voters have been asked to de-
eide for many years. The safe invest
ment of the permanent funds of the state
| is a matter that vitality affects every tax
ing them In poor securities upon which
the interest payments might not be sure
would result In reduction of the
amount of the apportionment made by
would entail either an increase of the
school tax levy or the curtailment Of edu.
cational facilities.
In favor of this amendment 1t may be
urged that the present limit placed upon
the borrowing powers of counties, school
districts, towns, cities and villages is I'M
necessarily low and could be safely raised
| from : per cent of the assessed realty
wonld III no way impair the security and
! would afford the municipalities and dis
tricts and other borrowers an opportunity
to extend their educational facilities and
| anu III l1SCSoSea1S 1OCoNI improvements.
Tt may also be we'll to note that the
law authorizing such loans provides that
the interest upon these bonds is made
first lien upon the taxes of the county,
and it's prompt payment is thus practical
Iy insured
The principle of making loans to our
counties, towns, cities. villages and school,
districts, seems to be generally accepted
as an Improvement upon the old law
which restricted the investment Of the
permanent school and university funds to
| the bonds Of the United States and of a few
states which were specified in the act of
the legislature It has been argued that
investments made in bonds of Minnesota
municipalities, districts and counties are
as safe as any that could be made IN state
bonds, and the rate of interest was about
the same as on United States bonds, TAX
ing into account the premium which such
bonds demand. In addition to this, the
fact Of the money being loaned In Min,
nesota is a. direct and permanent ad-
vantage to our own citizens.
On the other hand it has been urged
that loans made to ourselves are not as
secure as loans made to another; that
when an individual borrows from himself
he is apt to neglect the interest pay
ments, but this is met by the fact thai
the interest is first claim upon the tax
es of the borrower and the security Is
thus made gilt-edged, especially when the
limit Of indebtedness is kept at such g
low figure.
This is an important matter fer the
voters to consider, and In the heat Of
partisan strife 1t is apt TO be overlooked
by the voter until he is actually called
upon to mark his ballot. The politica,
party committees are busily engaged II
looking after the personal interests Of
candidates and in presenting questions Of
national interest SO that this constitution
al amendment Is liable to be forgotten
1t does not deserve such treatment, fol
it affects not only our educational sys.
tenn and the safety Of the permanent edu
cational funds, but 1t affects the develop
ment Of every city. county, school dis
trict town and village, and the pocket
book of every taxpayer In the state