The Lexington intelligencer. [volume] (Lexington, Mo.) 1901-1949, 1902-09-20
The School Fund Amendment.

looking to some permanent DISPOSE
ton Of the school fund, will soon be
before us, and it is time we should
begin to think about it, if we wish to
vote intelligently in this matter on
election day. The case 10 this, fairly
put: Toe state is trustee for about
81, S94, 600 belonging to the public
schools Of Missouri This money
came from various sources, federal
land grants to schools, federal direct
war taxes returned etc. Under the
statutes of the states, for the sake Of
security, this school money cannot be
invested in anything but United.
States bonds or Missouri state bonds.
A part Of this the school fund years
ago, was invested 10 United States
bonds, which Yielded so small an in-
terest return that the legislature
! thought it wise TO sell these bonds at
premium and invest the proceeds 10
state securities yielding a better rate
of interest, for the state was 10 debt
and had to borrow money anyhow.
1t was thought wise for the state to
borrow the money Of its wi schools
and let them have the benefit of the
higher rate Of interest. These bonds
were issued 10 the form Of n%on-trans-
ferable certificates Of Indebtedness
so that they could never be speculate
ed in or diverted from the use aud
benefit of the public schools.
Meanwhile u state debt has been
growing less from year TO year until
now we are in sight Of the end. Un-
der the constitution as 1t now stands,
we arr. forced to use a certain part Of
the state revenues to pay our debts,
and therefore at the end Of the present
school year we will have paid all we
owe except the school money. When
this time comes, as the constitution
now stands, we will have to pay off
the school certificates and, as trustee,
find other investment for the trust
money. But the law will not permit
this money to be invested in anything
but state bonds or, United States
bonds. There will be no state bonds
So there will be no alternative but to
buy United States bonds at such
premium that they will yield less
than two per cent interest. This
will materially decrease %theincome Of
the public schools and we will bave
to tax ourselves to make it up. Now
what are we going to do about it?
Several plans have been suggested.
The ones most worthy of consideration
are the following:
First, to 50 amend the constitution
that we shall not be forced to pay the
debt we owe the schools, but let it
remain drawing a fair rate of interest.
Second, to pay the school debt, in
vest the proceeds in United States
bonds, according to law, and make up
the difference between the state bond
income and the United States bond
income by additional school tax.
Third, to so amend the constitution
as to enable us 70 pay off the school
debt, give up the trusteeship, and
turn over the school moneys to the
COUNTIES, according to some equitable
division, and to the State Univer-
/, sity.
From the standpoint of arithmetic
the first and second plans amount to
precisely the same thing. 1t would
cost the tax payers neither more nor
less to keep the school money, which
/, the state as trustee borrowed to
J apply to other uses, and to pay a lib
eral rate of interest on it, than it
: would to pay the debt, invest the
proceeds in United States bonds
! bringing a trifing income, and make
; up the difference by an additional
} school tax. The advantage is with
the first plan 10 that the investment
would be permanent, n%on-transfer-
5 able, could not be stolen, specialized
with, or tiDkered with by any fool
legislature in the future. The last
| plan might be BEST Of all in some
, counties, but worst of all in most Of
them. If all OF the counties had fiscal
agents who were always in their
Offices, and II hey could, under proper
, bond, lend out all the school moneys,
, all the time, at good rates, with good
! security, this plan might work. But
nine meu out OF ten believe from ex