The Richmond palladium and sun-telegram. [volume] (Richmond, Ind.) 1907-1939, 1907-10-14
PULLING FEATURES
IN NEW STATE LAW
Statute in Reference to De-
positories, Effective Dec.
Proves Troublesome.
CASTING OF WARRANTS.
THIS IS ONE POINT THAT is THE
SUBJECT OF DISCUSSION A.
MoNG OFFICIALS OF WAYNE
coUNTY-A SERIOUS DEFECT.

Puzzling problems with relation to
the depository law, which will become
effective December 1, have presented
themselves to Wayne county officers
as we'll as those in probably every
county in the state and likewise TO
the state officials themselves.
AS often is the case the General AS
sembly did not make every provision
of the statute as clear as might nave
been done and the result is that sew
eral interpretations can be put on sew
eral of the clauses. One of the ques-
lions that has been a subject of dis
cussion among Wayne county officers
IA with relation to the cashing of war
rants At the present time the county
auditors warrant is cashed by the
treasurer. Under the depository law,
It is believed, the treasurer may cash
them, If he so chooses, but as a rule
the warrants will be endorsed by the
treasurer and will be cashed by the
holder at the county's depository as is
DESIGNATED on the face of the warrant.
Much extra bookkeeping will be neces-
sary under the depository law, 1t is
believed, but the statute itself permits
county officers to develop for them
selves a system which will be ade
uuate. In various counties various
systems will be employed in conse-
quence.
Causing Rumpus.
Just at this time the question that
So fc hof
regarding the finance boards them
selves. Bankers over the state fail to
see where they will be secured for the
negotiable papers they file with the
finance boards as security for the
funds which the banks will hold.
The law provides that where banks
do not care to give their own bonds
as security for public deposits that
may be awarded to them may deposit
other securities, such as mortgage
notes or municipal bonds. The law
does not specify what kind of secur-
tiles and it is pointed out to the bank
ers that it makes no provision whatev-
err for liability in case member OF
the finance board, with whom the Sc
curities may be deposited, appropri-
ates them to his own use.
The law says that the securities
shall be deposited with the appropri-
ate board Of finance, but makes no
provision beyond that for the custody
of the securities. The question that
The bankers ask is: "Who would stand
the loss If some member Of the board
of finance should embezzle the secur-
ities?" Inasmuch as it is not the duty
OF the state bank department to con-
strue the law this question has been
referred to the banks attorney.
Defect is Serious.
The defect in the law is considered
a serious one at the Office of the audi
tor of state. AS in the case of town
ship board of finance, which has no
fixed office and which might consist
of men of limited responsibility, the
banks do not feel that they would be
safe in depositing securities with mem
bers of board of limited responsible
tiles and open the way for member
of the board, if he so chooses, to carry
off the securities and negotiate them
for his own. The law provides that
securities in the hands of boards OF
finance shall not be negotiable in cas-
es of this kind, but the bankers point
out that member OF the board of fl
nance intrusted with the securities. il
he chose to embezzle them, might fail
to indicate on the securities that they
had been intrusted to him under the
depository law and negotiate them out
side the state, where the parties with
whom he might transact were ignorant
of the law. Under the law the bank
depositing the securities with the
board of finance might recover them
but it would likely have trouble in 10
eating the securities and be forced tc
proceed with large amount of eXpen
sive litigation.