The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1901-11-09
REPUBLIC SPECIAL.

I
jefferson City. Mo. Nov STo-day the
Governor gave out the Auditors report on
the present condition of the State School
Fund Auditor Allen. as part of the report.
gives an interesting history of the School
Fund. showing the identity in security oi
School Fund certificates with the bonds
which they replaced. In an address to the
PEOPLE accompanying Auditor Aliens re-
port the Governor shows that The hest men
of tcth parties have from the beginning
united in establishing the certificate method
of securing the fund. the object OF all
friends Of public education being TO guard
| against the possibility Of converting the
| fund TO improper Uses and TO insure HID
eral income to the schools. The Govern"r
| says:
| GOvcrnor's Address.
| To the People OF Missouri: l invite atten-
| tion to the report of Auditor Allen, which
| Concisely. and yet in sufficient detail, re-
! views the management OF our puh-lc school
| rua5s sirce January /. 1859. The Auditors S
| statement Is so comprehensive that but lit
! tie remains to be said by me.
! The fern Of the investment Of the school
I fumes was changed under the several acts
| To which he has referred from the bond"
\ form of Indebtedness to the certificate
| form of Indebtedness. Beth forms Of IN
| debtedness are, in contemplation OF the
| Constitution. bond forms of liability. and
| the question naturally arises why the State
should have changed from the one form
TO the ether.
A cursory examination disc!oses the rea-
son. The change was made for the pur-
pose of more perfectly safeguarding these
sacred funds.
Governor Hardin.
In this connection I desire to quote from
the messages of Governors Hardin and
Phelps. Governor Hardns opinion was
fotcefuily expressed in his message of Janu
airy ). 1877, in which. among other things,
he said:
This large increase in the several (schooD
funus. as we'll as the favorable purchase OF
the valuable securities in wnicn tine pro-
cteds OF the United states bonus were in
vested. Is argument enough TO prove the
wisnom OF the State Boaru Of Education in
making these conversions. The withdrawal
from the market OF such large amounts
Of our stocks. and for the benefit of such
trusts. coupled with the asserted confidence
implied from the act that these authorities
hau in the credit of The State. ana of ITS
good faith to pay them. had, no doubt. the
effect of aiding IN the appreciation of our
state stocks Ine bs process sol OF The ] sale OF OF
per cent bonds Of this State. payable to
bearer, and deposited in the vaults OF the
state Treasury. They are not considered
secure. and l, therefore. advise the Legisa-
ture either to direct by concurrent resou-
ton that the State Board of Education
bond and coupon. to be signed by its presi-
dent. and a suitable record of the facts
made in their journal. 10 the effect that
the bond or coupon belongs to the particular
fund, as the case may be; or II regarded as
the more preferable torn of security, to en-
act law directing the substitution Of con-
sodated bonds for those owned by the re-
spective funds. and transfers of interest
from the State interest fund az hereinafter
recommended in case of certificates of in
debtedncss. or that the State Auditor issue
and deposit with the Treasurer certificates
of Indebtedness for the proper amounts he
longing TO the respective funds. and On the
first days of January and July of ,,sch year
transfer the amounts of interest then dGe
from the State interest fund to the respec-
was established by the act of March %:
1872 One of the three alternatives should
be adopted. II either of the two latter. the
act should further require the Treasurer,
on the receipt of the consolidated bonds
certificates of Indebtedness. to deliver the
bonds and the coupons attached belonging
to the respective funds to the Auditor. who
shall Immediately, In the presence of the
Executive. cancel them by punches through
their faces. and note on the register Of each
bond and coupon that they have been re-
tired and the date of and the cause for re-
firing the same. The issuance of either the
consolidated bonds or certificates of indehi-
edness would not be in conflict. as l con-
ceive. with section "A of article of the
Constitution. for tho debt or liabilities now
due the funds were created by authority
OF law. and are existing and the issuance
IN trust for them OF new forms of security
and taking. up the present ones. is not the
creation Of a new debt. but merely the
change of one form of evidence of indebted
ress for another"
Governor Phelps.
Governor Phelps, in his message Of .Ianu-
airy 9. 1879. also urged a change in the form
of investme mt of our school funds. | quote
from his able message:
THE bonds Of the State belonging TO this
(schooD fund are IN the custody OF the
Treasurer. There is nothing to show upon
their face that the bonds belong to tie
title to which passes by delivery. If these
bonds should be improperly put in circula-
tion. and come into the hands of an in
tion whether the State would not be moral
ly bound for their payment. Let us obviate
all such questions when it can be so easily
done. Direct that all of the coupons shall
be destroyed. the bonds Cancelled by defac-
ing them, and that fact be made of record
I'm the Offices of State Auditor and State
Treasurer by a description of the bonds and
The date they shall become due. Issue
certificates of Indebtedness to the public
per cent per annum. and In such amounts
as will cause the certificate to become pay
able at the time the bonds would have be-
come due, and in such manner that the pub
lie debt shall not be increased, In violation
oS the Constitution. Let provision be made
teat when the certificates SSH shall u be redeem;
for this fund. and when delivered to the
Treasurer they shall. in like manner, De
Cancelled and certificates Of Indebtedness is
sued.
Seminary Fund.
There are $l22, 600 of the bonds OF this
State. bearing per cent interest. in the
custody of the State Treasurer. They are
coupon bonds, with nothing upon them to
derote they are the property OF the State.
l recommend these bonds be Cancelled and
certificates in lieu thereof be issued In the
same manner and subject to like conditions
with the certificates by me recommended to
be issued for State bonds held by the pub
lie school fund"
The school fund bonds were payable to
bearer" and were negotiable and trans
ever present. To obviate this danger. these
bonds, payable to bearer. were Cancelled.
and the new form of promise to pay to ;he
State Beard Of Education. nonnegotiable,
unconvertible and nontransferable." was
substituted.
The Constitution says that the school
funds shall be invested in bords of the
State Of Missouri or of the United States"
BY reference to the language OF the bond
and the language of the certifcate, as they
appear In the Auditors statement. 1t Is OBJ
vious that the certificates are in fact bonds
of the State. as required by the Ccnstitu-
tion. and no political party would ever dare
attemDt to repudiate these sacred oblga-
tions of this sovereign State In other
words, both obligations are promises of tbs
bond" the promise to pay was to bearer
and therefore negotiable In the case of
the Certificate the promise TO pay is to
the State Board of Education. and is nom
negotiable. That Is to say, by the change
made the negotiable bonds were Cancelled
and nonnegotiable bonds issued in lieu
thereof.
The Auditor has given the votes of the
various political parties upon the several
measures authorizing the certificates Of in