The Snyder signal. (Snyder, Tex.) 1887-????, 1914-09-18

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ltablshing u Central State Bank at
Austin with a capital Of twenty mil
lion dollars secured by bonds and
permanent school funds will have
great many supporters. but will also
meet with some strong opposition
probably enough to defeat It.
The Houston Posts Austin report
or says:
Gov. Colqultt's proposed State
bank. the capital Of which Is to be
secured by pledging the bonds and
land notes now held by the perma-
nent school fund, has given rise to
the cry that there 10 being attempt
ed IAN unwarranted breach OF a sa-
cred trust" The cry is only heard
among certain members Of the legis-
lature and probably the majority OF
OOln nuuhth Ithhlu Aht pi'PS''b'H
as good one. Extrayagant praise
of the idea Is to be heard. but during
the day there has developed a group
who will oppose any such legislation
on the ground that the State not only
should not endanger the school fund
by pledglng them against an unsta-
BILE security. but that II has no power
under the constitution to do so.
Some Legislators contend that
there will not be time to consider the
measure at this session, others think
II would not be constitutional, some
hint belief that the Governor Il
'lplaylng politics, but there is a con
siderable contingent favorable to the
measure.
There are those who contend that
to pledge the bonds and the land
notes Of the school fund for the pur-
pose Of capltallzing bank by the
state would be to divert the fund
from It's purpose To this It is replied
that the fund will not be diverted
II put to such use, but that II will
be invested In a legitimate manner.
The laws Of the state prescribe Just
what kind Of securities the school
funds may be invested In. and 1t is
contended that all that is necessary
Is that a clause be contained In the
law creating the new bank that will
give authority for such Investment
Gov. Colquitt contends that the
school funds will not be diverted. but
would be used as capital stock and
would continue to bear interest as
now and the Increment would be re-
Invested by the board OF education
There are bankers and bank stock
holders in the senate. some Of the
senators are interested In national
banks. These very same men however
seem to be In favor Of the proposal
Of the governor and to think that the
establishment Of such a central state
bank practicable.
In regard to the possibility Of loss
on the school bonds. Governor Col
quit stated that the currency issued
on the capital stock would be 1876
per cent and that money put out on
cotton warehouse receipts would be
25 per cen; less than the face Of the
receipt. giving a leaway Of 30 per
cent. The state school bonds are guar
anteed under the constitution and
any loss must be made good by tax
alton. In the event a small state bank
went out Of business. the state would
stlll hold the warehouse receipts on
which currency was Issued and would
sell the cotton to cover the loss
It is a pretty big proposition to be
thrashed out In ten days and unless
Gov. Colqultt shall cali another spe-
clal session the scheme will lose ex-
ecutlve force. for since Mr.. Fergu-
son would not favor investing the
school money In farm lands. he will
certainly not favor using Il 70 capit-
l. mama.