El Paso herald. (El Paso, Tex.) 1901-1931, 1913-10-02
MURCHISON NOW
SCHOOL TREASURER

Continued From Page Il
to no more than S45. 600. This balance,
the bankers held did not justify the
making of a bond of $4,000, which
would cost $3.50 at the rate of 81 per
$1,000 However the banks of the
clearing house consented to contribute
literally to the subscription fund Tor
making this bond. The other reason
given for declining to bid for the
school money is that there remains ap-
proximateIy $170O of an old interest
warrant unpaid and the banks have
been advised that there is no legal way
that this can be paid In view OF these
facts the banks did not feel 1ustlIled IN
making a deal directly with the school
board as the legality Of such an ar
rangement had been questioned
Interest Warrant Not Paid.
Two years ago, the banker says, the
interest warrant was turned down, as
it was held that the school money
could not be diverted for the payment
of interest and the warrant was there
fore not legal The warrant amounted
to about $500, the total amount of in
terest due on warrants drawn prior 10
that time To cover the discount on
the warrants, the school board added
five percent to the teachers salaries
and this amount was discounted al the
banks when the warrants were pre-
scented for payment. It was found that
this was more than was necessary 10
cover the interest on these particular
warrants, to which it was added The
banks voluntarily applied the excess,
with the consent of the school board,
to the payment of the dishOnOred in
terest warrant, which amounted 10
about $500. If the warrants Tor May,
1918. the banker says. had been ham
died as all other warrants for the pre-
vious months of the same year had
been handled. the total amount OF the
dishonOred interest warrant would
have been discharged
May Warrants Cause Trouble.
But instead of turning the May war
rants over TO the banks for the teach
ers to call and endorse, then get the
net amount of their salaries, the
banker says the warrants were handed
directly to the teachers by the school
board and without the knowledge OF
the banks As there was then a suffi-
cient fund n the treasury to pay them,
the teachers received the full amount
of warrants, including the five percent
which had been added to take care OF
the interest, and more than their con-
tracts called for. The result was that
the banks were left with $500 of the
old interest warrant unpaid. and it
still is unpaid. It was this unpaid in
terest warrant that the banks were
advised could not be legally paid
VIII Return TO Old Basis.
Inc bankers say LnaL the uelnOQ Of
handling the teachers warrants will
go back to the basis which has been
used in the past by which the school
board VIII issue the warrants and the
teachers will make their OWE arrange
nrents for depOsiting them. each bank
taking care of its own customers.
An FL Paso attorney. speaking OF
the warrants says that the constitution
holds that debt against a city is not
valid unless provision is made for the
payment of the debt at the time OF its
creation To protect the holder OF
school warrants he says the city coun-
ell would be called upon to meett and
pass an ordinance fixing the school tax
rate for the fiscal year March 1 to
March I, this to be done before the
warrants are issued. Then when the
warrants were issued to care for the
expenses of the schools, they must
specify that they are payable out of
the collections received by virtue of
such tax levy. If warrants are is
sued before such provision is made, the
warrants will not be valid under the
constitution, he holds.
See 'The Fire Bugs at the Greeian
Observation-Disclosures