The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1901-01-31
SHOULD PAY INTEREST.

A bill has been introduced in the
Legislature to require the State Treas
urer to give his bonsi in surety COM
pany and deposit all public moneys in
State banks. The argument is that if
the State Treasurer gives personal
bond, he will be under obligations to
deposit the surplus money in the banks
whose officers make up or sign his bond,
and that the use of the surplus money
compensates the bank officials for be-
coming sureties of the State Treasurer.
1t has long been a custom in North
Carolina for some banker to volunteer
to "get up" the bond of the State
Treasurer. He would then get other
bankers to go on the bond with him,
and the State Treasurer would then
keep most of the States money in those
banks whose officers or owners had
made his bond. In most instances these
bankers have been officers of National
banks, and therefore the States money
has been deposited mainly in National
banks.
The national banks do not pay cent
of taxes to The support of the State
government while the State banks are
taxed by The General Assembly. The
owners of State banks are making this
argument in behalf of the bill to make
only State oanks repositories of State
funds: "The United States government,
which charters national banks, makes
national banks exclusively the deposit
| tory of national funds. The State of
North Caroliua. witch taxes State
banks, ought to do by the banks it
creates what the national government
does by the banks it creates to-wit:
make State banks exclusively the de-
positories of State funds" There is
| logic in this argument.
| But the money In the State Treas
! ury belong to all the people and If its
use by any tank, State or national, is
worth anything to the bank. the bank
ought to pay the State what it is worth.
If the present State Treasurer's bond
has been made by bankers who expect
| the State deposits in return for signing
his bond, the State ought now to adopt
a new policy. and lei the State Treas
urer give his bond in a surety company
so as to owe obligations to no bankers.
Nearly all our State Treasurers have
owed obligations to bankers who sign
ed their bonds. We are not criticiZing
the present State Treasurer for this
course, for he is follovin the precedent
of most of mis- predecessors. 1t is the
system we criticize.
Why should two little savings banks
pay interest on the deposits of State
money in their banks and the large
banks, State and national to which are
given the bulk of the money, pay no in
terest whatever? If the money is
worth anything to the banks, they
ought to pay interest on it, and the
/ money of the State ought to be deposit
ed in those banks that put up collateral
and pay interest on the balances. OF
course much of the money is in the
banks a very short time and no interest
could be collected, Dut the banks that
are the repositories of State funds
ought to pay interest OH the balances
that are kept on deposit. Enough
money would be derived from this
source to pay the expenses of the State
Treasurer office. In Michigan for the
wear ending 1898, the interest on public
moneys amounted to 6,596.S0 and in
1900 $S4, 1854.
The following letter shows that Wis
consin derives a good sum annually from
the interest on the State money
Treasury Department,
Madison, Wis, Jan. 2S 1901
Josephus Daniels, Esq. Raleigh, n. &.
Dear Sir PURSUANT to your request OF
the 25th inst. ! herewith enclose copy
of the law governing the State deposit
tories. The amount of interest received
from the State repositories averages about
$4,000 year.
Yours very truly,
j. o. DAVIDSON.
State Treasurer.
Other States derive a considerable