The daily silver state. [volume] (Winnemucca, Nev.) 1903-1907, 1903-06-29
THE BOARDS EKPiANA Ton

The Silver State presents herewith
the explanation of the state board OF
education OF the exchange of govern
ment bonds belonging to the school
fund for Massachusetts bonds. The
article is reproduced in full, and in
view of future comment. we urge all
u readers to study it carefully; h
lay it away for future reference. The
explanation:
TO THE PUBLIC-The State Board
OF Education, having completed the
sale of United States bonds which fell
due in 1907, now makes a full state
ment of the facts and reasons which
nave governed them in the transac-
ton for the information of the people.
HISTORY
1t will be we'll in the first place TO
give a brief history of the bond trans
action from the beginning until the
completion of the sale. About two
years since, Governor Sadler advocated
the sale of the United States bonds
due in 1907, then in the treasury, and
the purchase of United States Govern
ment bonds maturing in 1928. he
showed, and we think clearly, that the
State of Nevada would benefit very
much by the exchange. The State
Board, not being acquainted with the
details of the financial operations, hes
itated until too late about accepting
the recommendation of Governor Sad
Ter.
During the past winter the atten-
ton of the State Board of Education
was called to the necessity of making
an investment in the public school
funds at once or losing the benefits
by depreciation of the bonds and of
a lower rate of interest that would fol-
low. The members of the Committees
on Education of the Senate and House
were called into the governors office
to confer about the matter. No def
mite action was taken by the members
of the House; but they agreed that if
the Mass. bonds, were found to be
valid bonds, the exchange of the U. S.
bonds for the Mass. bonds seemed to
be a good and advantageous exchange
for the benefit of the public school
fund of the State. Two members OF
the Board, keeping in mind the rec
OmmendatiOn of Governor Sadler some
two years ago, were in favor of max
ing the exchange of bonds according
to the offer of Messrs. Kelly & Kelly,
OF Topeka, Kansas, but the governor
was unwilling to engage in the rams
action with the amount of knowledge
hat he then had. Correspondence
was entered into with the Treasurer
of Massachusetts. the Chemical Ma
tional Bank of New York and the
First National Bank of Chicago and
two or three other banks respecting
the q I4r1 nf thara hnvAr otto.~ frOro
the various banks gave indubitable ev-
idence that the bonds were regularly
issued and were a valuable invest
ment. During the inquiry the fact
was brought out that the Massachu-
setts State bonds had been accepted
by the United States Government as
deposits in the Treasury in place OF
United States bonds, thus showing the
esteem in which the United States
Government held these bonds. Al
though this evidence seemed to place
the transaction beyond question. the
governor requested a member of the
Board to go to Chicago, Washington
and Boston and inquire as to the
value of the Massachusetts bonds be-
fore he was willing to take any steps
toward their purchase. The members
o. the Board left home Immediately
at the governors request n advised
with the officers of the First National
Bank of Chicago, with the Assistant
Treasurer at Washington and with the
Treasurer of Massachusetts at Boston
The value of the Massachusetts bonds
was established beyond question and
the fact telegraphed to Governor
Sparks.
THE LAW
The powers of the Board of Educa-
ton have been called in question. The
statute which applies to the invest
ment OF funds is found in Section 1887
of Cuttings Revised Statutes. II i.
provided first. that in no case shall
any bonds be purchased without the
State Board of Education making due
and diligent inquiry as to the financial
standing and responsibility Of the
state or states whose bonds it is pro-
posed to purchase.
II is very clear that the State Board
OF Education complied with the pro-
visions of the statute and made the
fullest inquiry into the financial stand
ing of the state, satisfying itself hat
the bonds We're a safe and valuable
investment.
2. The statute says that the Board OF
OF Education shall require of the At
tnrney-General OF this State his legal