The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1913-09-04
A FEW PLAIN FICTS.

| A FEW PLAIN FACTS.
Minnesota sells certificate of in.
debtedness to draw per cent in.
terest, and keeps a lot of cash in.
vested in Virginia and other state
bonds at 3 per cent. If mar
would run his business on that
principle he would soon go bank.
rupt. browns Valley Tribune.
At the time Virginia and other
state bonds were purchased for the
permanent funds of the state the
state board of investment had nc
option in the matter of investing
funds-the board was obliged to in.
vest in bonds of the United States
or bonds of other states when a
certain amount had accumulated in
! the permanent funds. Until 1897
the board of investment was also
authorized to loan permanent funds
at five per cent interest to the sew
eral counties or school districts of
the state, to be used in the erection
of county or school buildings, to the
amount of three per cent of the
assessed valuation of the county or
school district. (See sec. 5, art.
state constitution.
Thus it will be perceived that
under such restrictions very little
money could be loaned to counties
and school districts, and the board
of investment was compelled to in
vest in the bonds of other states.
The legislature of 1895 submitted
an amendment, which was adopted
in 1896, (sec. 6, art. 81 providing
that the permanent funds might
also be loaned to any. city, town or
village, as we'll as counties and
school districts, at not less than 3
per cent and to an amount that
together with the entire bonded
indebtedness of the municipality
would not exceed per cent of the
real estate valuation. Thus the
field for investing the permanent
funds in local securities was en-
larged, yet for several years after the
adoption of the amendment the sur
plus, after the local municipalities
had been cared for,-had to be in
vested in the bonds of other states.
Was the board of investment blam-
able for complying with the plain
terms of the law and the constitu-
tion? -;
In 1903 an amendment to section
6, article s of the constitution was
submitted, and was adopted in 1904,
which provided that an amount not
to exceed Is per cent of the assessed
real estate valuation, including all
indebtedness, might be loaned to
municipalities. >
Since 1902 not one dollar of the
permanent funds has been invested
in the bonds of other states.
The present state auditor and his
predecessor always favored increas-
ing the amount that could be loaned
to municipalities in our own state.
But the Union regards Is per cent of
the assessed real estate valuation as
high enough.
| When the bonds of other states
were purchased for the permanent
funds it was ever the aim of the
investment board to secure if pos
sible the bonds of northern states,
But there were few northern states
bonds obtainable. 1t was impossible
to get northern bonds that would
net the fund three per cent as re-
Quired by law. Minnesota funding
bonds could not be purchased to net
more than 24 per cent. The board
was compelled to purchase Ten.
nessee, Alabama, Virginia and Other
state bonds. Massachusetts, ; mel
cent bonds were selling at a pre-.
MUM most of the time when Mime.
sofa had funds to invest.
! "
At the present time and for severa