St. Tammany farmer., 1910-02-12
ASK NEW BOND PLAN
GOVERNMENT EMPLOYEES PAY
$1,noo,oGo YEARLY FOR SURETY.
Companies Expend Only 100000 An
nuaIIy for DefaIcations-Indem-
nifty Scheme Is Strongly Urged
at the National Capital.

Five billions of dollars is the
| amount of security demanded by the
government from its officers and en-
ployes who have the handling of its
money; $1.00O,o00 is the amount paid
by the officers and employees to bond
ing companies for going on their
bonds; 100000, or ten per cent. of
the premiums paid, is the amount the
bonding companies have been called
on to pay to the government for losses
through the delinquency Of it's agents.
Such, in brief, are the facts .ascer-
tanned by the congressional joint com.
mission now investigating the subject,
and it has created great interest in
Washington, where the government
employs thousands.
The investigation was occasioned by
an attempt, a few months ago, by the
bonding companies to increase their
premium rates from 200 to 600 per
cent
The matter was partly Investigated
at the recent special session, and a
law was enacted instructing the Sec
retary of the treasury to accept no
bond where the premium charged was
more than 35 per cent. in excess Of
the rates in force in 19QS Since then
officers and employees have found
great difficulty in procuring bonds.
So heavy was the burden imposed
by the new rates that the director of
the census went before congress at
its special session and asked that the
salary of his disburs.ng officer be in
creased $500 to enable him to pay the
premium. and congress did give him
an increase of 1915 on that account.
The whole bonding business has had
a complete airing before the congress
sional commission. For several years
there was no uniform schedule of
rates, different companies charging a
different premium.
When Leslie NJ Shaw was secretary
of the treasury he became dissatisfied
with the companies for what he
termed their recklessness in giving
bonds, in many cases the amount of
a single bond being double the total
assets of the securing company. He
issued an order that he would not ac-
cept of any bond in excess of ten per
cent. of the capital and surplus of the
company.
This called for strong protest
from the companies, but the secretary
remained firm, and his ruling has
been followed by his successors. To
relieve themselves of a part of the
burden imposed by the heavy pre-
MUM demanded, the officers and en-
ployes required to give bond have
suggested to the treasury department
an indemnity plan, doing away entire
ly with the bonding system.
AS the facts show that the losses
are only about ten per cent. of the
premiums paid, it is suggested that,
or employe be required to deposit
with the government sum equal to
25 per cent of the premiums now
paid to the companies, and out of this
sum the government shall reimburse
itself for all losses.
When an officer or employe retires
from the service the amount so de-
posted by him, less his pro rata share
of the losses, would be returned to
him. 1t is claimed that this plan will
prove one of actual economy to the
government, as the collection of
losses has hitherto been very expen-
sive. 1t is said the post Office depart
ment recently expended 100000 to re-
cover $4,000 of losses.