The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-07-02
THE STATE SCHOOL FUND.

THE STATE SCHOOL FUND.
If there is one fund belonging to
the state that should be sacred above
another it is the state school fund. 1t
was designed by the founders of the
state for the education of coming
generations, and wise men in the halls
of congress provided for building it
up. Stringent provisions were placed
around it by the trainers of the cor
stitution whereby it might never be
diminished, and when once a dollar
goes into that fund 1T can never be
taken from it or used for any purpose
except an investment to bring in funds
to use towards paying the expenses of
the public schools.
This is why the school fund COM
mission cannot legally pay pre-
MUM for bonds which it buys. 1t
can pay par. but no more. for this
would be taking some of the principal
of the school fund to pay the pre-
MUM, which the constitution does not
allow.
Another safeguard which was
originally placed around this fund to
keep from loading it UP with bonds
which might not prove a good invest
ment was a law prohibiting the school
fund commission from purchasing
bonds of municipalities if their total
Indebtedness exceeded 10 per cent of
their total assessed valuation. Three
or four years ago eastern investors
began to want Kansas bonds so that
it was difficult to keep all of the
school fund invested in bonds which
would come within this safeguard,
and the last legislature raised the
limit to Is per cent, doubtless expect
ing the school fund commission to ex-
ercise proper vigilance in investing in
any bonds which exceeded the 10 per
cent limit
There have been whispered rumors
during the past few months that the
state school fund was not being ad-
ministered with the diligence which
was expected of those in charge of it,
and the disclosures recently made by
the State Journal seem to bear out
these rumors. Nothing of a criminal
nature is apparent in the handling OF
the fund. but some of the deals which
the present commission have made
certainly do not reflect any great
amount of credit on those who were
responsible for them
The Dodge City deal, which the
state auditors Office held up until GER
tifcates were forthcoming to show
that it could be legally carried out,
did not warrant any investor purchas-
ing them at par. The investigation
made by the State Journal, showing
that these same bonds were offered
not long ago for rs cents on the dol
lar, and turned down even at that fig
ure, has probably spiked the deal, as
it is not believed Attorney General
n
chase of the bonds since he has come |
into possession of that knowledge
The parties who had these bonds
for sale displayed a great anxiety to |
dispose of them, and it is said that
one member. of the commission was
Just as anxious to consummate the |
purchase.
1t would doubtless have been good |
deal for the holders of the bonds. If
hey made even as much as IS cents
On the dollar for them, the price at
which they were refused by other in
yestors, they would have netted near
y 900 by selling them to the state
1t par, pretty fair profit on an in
7estment of $4,000 for a year in adj
Iition to the regular interest brought
0y the bonds. The investment GER
ainly is not one which ought to at
ract an investment of state funds.
because the bonded Indebtedness of
Dodge City is close to the 10 per cent.
INIT, even without considering $780,
700 of city warrants which are now in
litigation.
AS the State Journal has pointed
'ut, there was nothing Illegal appar-
sntly in the deal whereby Secretary
If State Burrow, acting as a member
purchase of some Smith Center bonds
rom a company in which he was the
principal owner and allowed himself
o clip not due interest coupons
mounting to $2,125, which would
otherwise have gone into the school
und. This seems to have been per-
ectly legal. but it does not reflect any
;reat amount of credit upon the COM
mission as a whole for allowing it, and
specially upon Mr.. Burrow himself
Who profited by the deal.
While there was nothing illegal in
his deal. Mr.. Burrows company Sc
'ured $73.14 more than it was entitled
o, apparently through a mistake of
ome kind. Mr.. Burrow has not yet
WINGED an inclination to correct this
rror, SO far as is known.
1t may be that the school fund COM
mission will use more discretion in the
uture in handling this fund. 1t GER
afnly should do so.