The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1906-12-21
The State Public Examiner
Submits a Report.
WOULD MAKE SON: CHAN IS
Recommends Mileage Basis for Tax
on Railroads, Suggestion as to
the State Banks.

ST. Paul, Dec. l5.-Public Examiner
Kerst has filed his report with Govern
or Johnson. 1t covers "A period OF two
wears and declares the finances of the
state to be in Il satisfactory condition.
All the state departments have been eX-
amined and little calling for censure has
been located.
The state board of control Mr.. Kerst
finds. has been conducted strictly in
compliance with the law. Contracts have
been at all times awarded to the lowest
bidder.
While all funds and moneys in charge
of the state treasury are correctly ac-
counted for, Mr.. Kerst thinks some of
the methods there are not strictly in ac-
cordance with the constitution and the
law. He holds that there has not been
a proper investment of the permanent
funds, that the states borrowing habit
is not comtenanced by the constitution.
and that the law authorizing it is wrong.
As remedy for overdrafts he suggests
that railroad taxes be paid semi-annual
ly.
An examination of the accounts of the
state university showed conflict between
the survey and university funds, but
these have since been rectified.
Irregularities, Mr.. Kerst says, were
found i'll number of county offices, but
as a rule, county offices generally were
found up to the standard. He thinks
that the bonds of county auditors in
some of the counties should be increas-
ed. The premium should be paid by the
county.
During the two years ending with
June. 1906, the number of state banks
has increased from 325 to 427, net
gain of l02. In the same period the
gain in capital stock has been over ST.
100000. There has not been failure.
The total banking resources of the
state, not including private institutions,
amount to $780, 032 SO. The total de-
posits are over $2l0,000,0O0. 1t is recon-
mended that private banks be brought
under state control
Under the present laws bank is not
permitted to make loan in excess of Is
per cent of its capital stock and curplus
and Mr.. Kerst recommends that the
banking law be amended permitting the
making of first mortgage loans on i'm
proved farms, located within the state,
equal to % per cent of the capital stock
and surplus of the bank; all such loans
to be limited to and not exceed 80 per
cent of the cash value thereof; provided,
that no bank shall invest in that class
OF loans in the aggregate, more than 80
per cent of its deposits.
There We're nineteen failures of private
banks in the two years and the deposits
leopardized were over 81, 100000.
Relative to examinations of the cities
of st. Paul and Minneapolis, Mr. Kerst
thinks there has been serious infrac-
ton of the law i'll compelling the street
car company to report properly the mum.
Der of cars in use for taxation purposes.
He claims that the cities do not come
any way near getting what is due them
from this source
From the examination of gross earn
ings of corporations, omissions and mac
curacics were found which realized the
state $1,71l.43 in taxes. Relative to the
present method of collecting taxes from
railway companies which is on a gross
earnings basis, Mr.. Kerst recommends
that 1t be changed to a mileage operated
basis. He thinks it would be more ad-
vantageous to the state. Express com
panies do not pay in taxes what they
should and Mr.. Kerst asks that the laws
be amended The companies, he SAYS,
should be compelled to file with the state
full statement of their earnings, with
other Details
The department has been considerably
handicapped in its examination Of tax
paying corporations, and Mr.. Kerst rec
ommends that the production of all need
ed books by the companies be made man
datory. He suggests heavy fine when
the demands of the department are not
complied with.
Joint stock concerns, such as telephone
companies, Mr. Kerst holds, should be
more stringently regulated by state laws
The destruction of books should also be
prohibited.
The telephone tax law, he also says, is
defective, in that it allows the companies
to escape the payment of much lawful
taxes. Sleeping car companies, the pub
lie examiner says, practically get off scott
free when it comes to the payment of
taxes. From 1900 to 1901 all they paid
in taxes was 1852. He says the whole
thing is a farce and that it should be in
quired into.
The public examiners department. has
an annual appropriation of about S25,O0O
and this, he says, is inadequate. He rec
ommends that it be increased to $780,
00C