The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1911-06-29
Z. SAFEGUARD PERMANENT FUNDS.

| SAFEGUARD PERMANENT FUNDS.
At every session of the legislature
there are members who insist upon
the enactment of legislation that will
require the state board of Investment
to dispose of the bonds of other states
held in our permanent funds so that
the proceeds may be loaned to home
municipalities. At the last session a
bill with that purpose in view passed
the house but failed of passage in the
senate. The original bill was amended
in the house so as to require that state
bonds held in our permanent funds
could not be sold for less than par
and accrued interest.
The present state board of invest
ment would never sanction the sale of
any of the state bonds held in our
permanent funds at less than par and
accrued interest, but We may not al
ways have such state board of in
vestment, and if a large amount of the
securities were unloaded on a de-
pressed market at what they would
bring the permanent funds would
suffer great loss.
On June 1st Massachusetts, three
per cent gold bonds we're quoted in
the market at S5A. Our permanent
school and university funds have in
vestments to the amount of So, 1925, 900
in these bonds. The bonds we're
bought at par and are safe invest
ment-they are as good as government
bonds. But just at present they could
not be sold for more than probably IS
cents on the dollar. In other words,
if the state of Minnesota we're to dis
pose of it's holdings in Massachusetts,
bonds today at market quotations it
would stand to lose S408, $50.
Massachusetts, bonds or any other
state bonds in which the permanent
funds of this state are invested should
never be sold for less than par and
accrued interest, for state bonds held
by another state can never be repudi-
ated-they are as good as gold.
AS the law now stands investments
in our permanent funds can be dis
| posed of by unanimous vote of the
state board of Investment, which
board consists of the governor, presi-
dent of the board of regents of the
state university, the chief justice of
the supreme court, state auditor and
state treasurer, at any price the board
may determine upon, but the law
should be changed to impose the re-
striction that bonds held in our per-
manent funds can not be disposed
of for less than their par value with
accrued interest.
In this connection we believe it
would be good business policy on the
part of the state to hold on to it's in
vestments in the bonds of other states.
There will be sufficient funds to care
for all legitimate applications for
loans by the home municipalities
without disposing of our gilt-edged
securities at sacrifice.
It is not good business policy to
loan to some municipalities all that
the law will permit them to borrow
| Our permanent school and university
funds must be safeguarded by the men
who are entrusted with that sacred
duty; not a dollar should be loaned
to any municipality unless the Sc
curity offered is ample and all re-
quirements of the laws governing the
granting of loans have been complied
with in every particular.
Plans to bury the last vestige of
war talk by pensioning confederate
civil war veterans are being discussed