The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-03-13
HOCH HAS A PLAN
Would Sell Oil Refinery Bonds
by Popular Subscription.
Scheme That Might Advertise
the State.
TO THE SCHOOL FUND.
Sale to This Department Also
Suggested.
Take Money Out of One Pocket
for Another.
70 THE SCHOOL FUND.

Governor Hoch is advocating SELL
ing the state oil refinery bonds by
popular subscription irstead of to the
state school fund. He argues that 1t
would be Il great advertisement for
the state if the people would speedily
subscribe for the entire issue.
There is little doubt that the bonds
would be taken up without difficulty
if offered to the public, as four per
cent state bonds would ordinarily
bring a premium There is good argu-
ment in what Governor Hoch SAYS
also, but there is also another side TO
the question.
1t has been proposed heretofore to
sell the bonds to the state school
fund, and it is question if the ad-
vertisement the state would get from
selling the bonds at public subscrip-
ton would overcome the argument in
favor of selling to the state school
fund.
If the state school fund should bay
the bonds the state would simply be
loaning the money to itself. It would
be taking it out of one pocket and
putting it into another and the state
would simply pay the interest to itself.
on the other hand, if the bonds
should be sold at popular subscription
the interest would be paid out to pri-
vate individuals.
The interest on the bonds. S21OOOo
at four per cent, amounts to $S.4OO 4
year. If they should run to maturity
it would amount to $4,000. II sold
to the state school fund this money
would go towards running the schools
of the state, while if sold to private
indiVi5uals it would be Paid out to
those individuals
Another thing: The bonds need
not necessarily run the ten years to
their maturity The legislature has
made provision to raise money enough
! to take a tenth u-F,
But if they are sold at private sub
| scriptfon they cannot be taken up for
Al Ieast hve years The bonds are
made to run ten years, with the option
of paying them at any time after five
years. Thus the sinking fund for
/ which the legislature has provided
would simply accumulate in the treas
/ ury and lie idle there for five years If
! the bonds are sold to private fndfvid-
uals. On the other hand, the school
fund law provides that any bonds held
/ by the school fund may be taken tfp
at any interest paying period, regard
/ less of their maturity as provided for
in the bonds themselves.
! The sinking fund will amount to S2f,-
600 q. year. so that S1O50 900 will accumu-
| late in the state treasury before any of
it can be used if the bonds go to private
individuals.
All of these things seem to argue in
favor of selling the bonds to the school
fund. Notwithstanding the advertising
the state would get from a popular sub
scription.
It has been claimed that there will
not be money enough to buy the bonds
in the state school fund fora good while.
This seems peculiar in view Of the fact
that for several years the school fund
commissioners claim they have had a
great deal of trouble in finding invest
ments enough to keep the school fund
invested, and that sometimes they would
have several thousand dollars on hand
without investment. One of the argu-
ments used to justify the iniquitous
Comanche bond purchase was that the
school fund commissioners had trouble
finding bonds enough to buy. Yet here
is a gilt-edged investment and now 1t IS
claimed the school fund will not have
money enough to buy them for several
months. The bonds need not all be
purchased at once, for the state will
certainly not need all of the money
right on the start. In fact, it would
look like good fnanciering not to sell
all of them except as the money is need
ed in building the branch peniteptiary
and the refinery In that time the
school fund certainly ought to have
enough money to take the bonds.
There has also been some argument
about testing the legality of the bonds
before they are issued If the school
fund should purchase them 1t would
make little difference whether they are
tested or not The state would simply
owe itself, and the state would certain
1y not dispute the legality of bonds held
by itself If the bonds are legal, well
and good; if they are not legal the leg
islature would still be bound to reim-
burse the state school fund for the
amount. The state would get the use
of the money in building the state re-
fnery anyway. 1t would get value re-
ceived and nobody but the Standard Oil
company would be injured thereby.
Speaker Stubbs estimates that the
new depository law will put $4,000 q
year into the state and county treas
uries in the future. Two years ago at
the instigation of State Treasurer Kelly
ures. That action therefore, according
to Mr.. Stubs estimate, has kept the
state and county treasures out of $780,
600 in the last two years.
Charles Gobbs, who was W. r.
Stubbs' secretary during the campaign
and since then has been Governor
will go into the stationery business IN
Kansas City. Mr.. Kellogg, son OF l.. 3
Kellogg of EnpOria, viii succeed him IN
the governors office
one of the new pluTns created by the
legislature for which there is a big de-
rnand is secretary of the board of con-
and carries with it an office in the state
house There will be a great deal or
bookkeeping and accounting in connec-
ton with it, and a thoroughly compet-
ent man will be required.
Among the candidates for the place
are Fred Knapp, who has been chief
clerk of the house: W. Z. Pitts OF
Sherman Elliott of Lawrence, Harry
Bowman Of Newton. and others. Elliott
and Bowman have been candidates for
places on the board of control, but IL