Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1901-10-31
BANKS TO PAY INTEREST
State Treasurer Gilbertson flakes y
Recommendation.


Des Moines, Oct. 24.-In letter to
Governor Shaw, transmitting the
financial report of the state treas
urer for the biennial period ending
June 80, 1901, State Treasurer q. ).
Glbertson recommends that law be
enacted authorizing the treasurer to
deposit the funds of the state in such
depository banks as will pay q rea-
sonable rate of interest on the aver
age daily or monthly balances. The
recommendation is q decided depart
ure from the position taken by any
treasurer in former years, and II
adopted means that the state would
derive an annual income of from
SIC, 900 to 900 from source that at
present yields no revenue.
During the period covered by the re-
port the treasury has carried a
monthly average balance of about
100000 in the several depository
banks of Des Moines permitted to re-
ceive such deposits. Mr.. Gilbertson
states that it is safe to assume that
the balances in the future, or at least
for many years to come, will aver
age nearly as much il not more than
they have for the last biennial period.
He says that the state should derive
some benefits from the balances and
he accordingly makes the recon-
mendation stated. !.
The letter of transmittal of the re-
port does not enter into details as to
what the system of charging interest
should be, but Mr.. Gilbertson stated
in an interview that he believed min
20 - INA ehnrl1 ha lived
by law, about one and a half per cent.
This would bring in ten or twelve
thousand dollars in interest annu-
ally. There is another expense to be
taken in consideration, however, that
would be incurred in the event the
banks were required to pay interest
on state deposits. That is the cost
of the state treasurer's bond. The
cost of bond such as is required OF
the treasurer is greater, twice over
than the salary paid to that official,
which is $4,000.
The bond of State Treasurer Gil
bertson is 100000, and that of Dep
uty j. S. McQuiston is $150,000. The
cost of guarantee bonds aggregating
$950,000 is between $4,000 and $4,000
Under the present arrangement OF
allowing depository banks the use OF
state funds without the payment OF
interest, it has been the custom OF
the favored banks to provide the bond
of the treasurer without cost to that
official or to the state.
If law is enacted requiring the
banks to pay for the use of state
funds it cannot be expected that they
will provide the bond of the treasury
officials. Neither can it be expected
| that the officials themselves will sup
ply the bond unless one of a per.
sonal character is accepted. The plan
that suggests itself is that the state
| by the bond.
The financial report of the treas
urer covering general revenue shows
that no Understanding Indebtedness
has existed at any time during the
period, and the states floating indebt-
edness has been reduced. Revenues
have been increased, although that
derived from direct taxation has been
reduced. The following table shows
the relative receipts of general rev
enue from the various sources during
the two last biennial periods:
Period end. Period end
June 80, June 80
1899. 1901