The Mena weekly star., 1907-03-07
INVEST THE SCHOOL FUND

which authorizes the Stdte DoaIu VI Commissioners to invest the per- naanent school fund in the bonds, mortgages, notes or other evidences of indebtedness of special school districts.
 The permanent school fund is now invested in Sl ,250. 800 of Arkansas bonds bearing 3 per cent interest. To illustrate how the Goodwin measure. if enacted into law, would work. let us say some special school district wants to put up new build inr and issue bonds to the amount of S25. .000. These bonds. under present conditions. would have to bear, say. 6 per cent interest. Un- der the Goodwin bill the Common School Commissioners could sell s25. GOO of the state bonds in which the permanent school fund IS now vested and invest the $25, 900 thus realized in the bonds of this special school district. The bonds thus sold to the permanent school fund would bear a lower rate of interest than if they had to be sold in the outside market, but would bear higher rate than 3 per cent. which is all that the school fund now receives from it's investment in state bonds. Let us say that in the case of this special district the bonds bore 1 per cent interest. The special district would be saving ? per cent a year on its s25 900 and the permanent school fund would be receiving per cent instead of 3 on that $25 900
 Little Rock bankers have said that the 3 per cent bonds in the perma- nent school fund can be sold at par. Of course the Common School Com missioners would have to sell these 3 per cents in order to get money with which to buy the securities of the special school districts. i.
 Naturally, the argument will be made that the school fund would not be so safe invested in special school district securities as it is in state bonds. But the Goodwin bill provides for the following safe guards:
 Sec. 2. The bonds, mortgages or other evidences of indebtedness held by said common school commis- sioners shall constitute a lien on all the school property of the district issuing the same. and said boad ot common school commissioners shall have the power to sell said property at any time there is default in the payment of the interest or any part of the principal.
 Sec. 4. The State Board of Com mon School Commissioners are here by empowered to retain any money due any school district at the time of making any annual apportion- ment and deposit the same to the credit of that district in the pay ment of any sum due from said dis trict to said Board of Common School Commissioners. Provision shall also be made for the payment of the principal of the said indebted ness either by the providing of a sinking fund or the payment of a certain portion of the whole each year, commencing within three years after said loan has been made.
 Sec. s. The State Board of Com mon School Commissioners shall re uuire all districts building houses under this act to keep all buildings insured for three-fourths of their value in favor of the State Board oi Common School Commissioners, the premium to be paid by said school district, and to arrange any other details or to make any rules govern. ing their action in making said Tn. veStments that shall not be contrary to the laws of the state of Arkansas or to the provisions of this act 1T order to make all investments under this act safe and secure.
 Notice that section 3 provides that the Common School Commissioner may retain any money due any schoo district at the time of making any annual apportionment and deposit that money to the credit of th' district in payment of any sum du' from the district to the Common School Commission.
 The opposition to this measure was doubtless expressed in a nut shell by Senator Amis. who said tha he believed the permanent fund i safe as invested now tin state bonds and that the school flnd might nof be safe if invested in warrants oi special school districts. But on ths other hand there is no doubt thai the new plan might bring great benefits. When school districts could borrow money at 1 per cent instead of ( and : and s. as at pres ent. the building and equipping oi new and better school houses would be greatly stimulated and the bur den on the taxpayers would bt lighter. Moreover. the permanent school funds revenue would be in creased by reason of it's moneys h.sit,u invested in securities drawinQ