Daily capital journal. (Salem, Oregon) 1903-1919, 1914-12-29
GOVERNOR SUGGESTS
INCREASE Of BOND
Says Bond Of State Treasurer
Should Be $5OO,OOO---
Passes II Up to Successor

Acting under the law which provides
that whenever the funds in the hands
Of the state treasurer shall exceed
three-fourths of the amount Of his
bond " it is the duty of the governor
before the first of each year to re-
quire the treasurer to furnish bond
which, in his discretion, shall be suf-
ticient to fully protect the state from
loss from any cause, and also upon the
decision of the circuit court in the case
now pending upon an appeal to the
supreme court in which it was held
that the state land board, and not the
state treasurer is the custodian Of over
S6,000,O00 in school fund mortgages,
bonds, etc. Governor West yesterday
afternoon notified Treasurer Kpy that
he had fixed his bond at $500, 900,
which is an increase of $l50,OOl over
the bond now furnished by Mr. Kay
BY incorporating into the letter Of
notification the qualifying clause "un-
less the govemorelect should recon.
mend smaller amount >, however.
Governor West has passed the burden
of responsibility of an increase up to
Governor elect Withycombe.
State Treasurer Kay departed yes.
terday afternoon for Seattle to be gone
for a couple of days and a statement
of his opinion upon the matter could
not be secured. He has previously ex.
pressed an opinion upon the subject,
however, and he has stated that he
will be perfectly willing to supply a
bond in any amount which the'govcmor
secs fit to exact from him but states
that, before such bond can be executed
the emergency board will have 10 meet
to provide for a deficiency for the
payment Of the increased premium
which it will require.
Treasurer Kay said that Governor
West was exercising his prcrogative
under the provisions of an old law
which has been on the statute books
since 1896 under which the state treas.
wer was required to furnish a personal
bond and pay the premiums out Of his
own salary, In 1907, he explains, when
the state depository law was enacted
this old statute was nullifiol and, while
the governor is still required to fix the
amount Of the bond the state is re-
quired to pay the premium and it is up
to the legislature to provide a special
fund sufficient to cover such premium.
The last Legislature provided that no
premium should be paid upon the treas.
urer s bond in excess Of one.third of
one per cent of the amount Of the bond
and, acting upon the basis of a $3.50.
600 bond which the state treasurer is
now required to furnish, made an an.
nual appropriation of $1,000 to cover
the premiums. This is sufficient to
pay the premium upon bond Of $780,. .
600 but bond Of 100000, such as
Governor West has fixed. will require
q premium Of at least 81 900,
Treasurer Kay takes the position |
that, under the emergency board act of
1913, IL is n misdemeanor for any state
officer or head of o department, com.
mission or other state institution to
create q debt in excess Of the funds al .
lowed for the support aud maintenance
Of his department. such premium can.
not be provided until the emergency
board has been called together by
Secretary Of State 0lcott and takes
action upon tho matter Secretary Of |
state Olcott stated last evening that |
no request had been made to him to
call the emergency board together aud
uBtil so requested he saw no reason for
doing 80,
Az present there arc approximately
81 100000 Of state funds held in the
custody Of the state treasurer which is
not only protected by His surety bonds
In the sum of $350,000 but also mon
The securities furnished by the banking /
with which the funds arc
deposited amounting TO 81 100000. Mr..
Kay has stated that IL makes no dif.
ference to him, so far rs he IL person
ally concerned whether the bond Is
fixed at 100000 or S5,000,000 as he
could furnish them just as easily aud
the bonding companies would he assum.
ing no greater risk than they are at
the present time but that the state
would have TO bear the additional
burden Of increased premium
As TO the protection Of the school
fund securities, which the circuit held
should properly bo held In the custody
Of the state land board Governor West
states that II Is a matter which will full
upon the state land board, through the
hopding Of its cust0dan-'which would
be Clerk Of the State Land Board
George q. Brown, and the governor
saws "that board is being so ad.
viscd.' In fixing Treasurer Kays
bond at 100000 Governor West also
specifics that emo more than 100000
is to he written by any one surety