Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1919-01-19
GOVERNOR DAVIS ACTS i
TO SAFEGUARD FUNDS
Compels Banks in Which State Money Is Deposited to
Discard Personal Security Bonds-Makes Close
Study Of Practice Of Other Commonweaths ,

AS a result OF an examination made
BY GHyernor Davis Into the methods 9,,, Of
state Treasurer G. y. Johnston advises
nc Governor that a total or se,oso.00o
cent arc approved surety bonds. are
now held by him to protect State funds
on deposit in the ihirty-siN banks that
dep6si,ories When Governor Davis
began I" look into this matter he found
that the combined bonds which had
been executed by the state repositories
amounted To only $S,15O.000. OF which
more than 40 per cent were on per
sunal security, including bonds amount
ing to i,G0o.00O that were detective
because OF death OF, sure,ies., Two
for half a million dollars each exc
cuted by but Il single surety: while
Two two, other banls so had had given corp3rate
legal maximum risk which the bond
ING company could assume.
WILL NOT ACCEPT ANY
MORE PERSONAL BONDS
When this situation was revealed,
iovernor Davis ruled that he would
not approve and accept personal bonds
surety was responsible for more than
20 per cent OF the total risk or for
s an nmopnt Erea,"r, than $1,000 Tho
Mad tho effect OF cutting the amount
Of personal surety bonds from n total
q total Of only $4,000 on January l. j,
ds1s. substituting IN their place sound
corporate surety bonds. whereas on
october i there were twenty banks
With surety bonds amounting TO $500
oeo. and fourteen with personal bonds
aggregate OF ,s.45o.o00 surety bonds
100000 each.
EIFTY-EIGHT BANKS
DESIGNATED DEPOSITORiES
The Virginia depository law desie-
n na.Gs by tity r. ss banks That can be
tories for state funds. Under spo-
c,hi act there Is ono other bank. in
be used by certain local officials 10
deposit money due the Commonwealth
ana from which tho state Treasurer
can draw out funds, but in which he
himself cannot p!aee deposits. Cover
nor Davis found t%o Of the nifty cigh,
ness. and .hat only thi"ty-nve Of thpn
Sond o 81 ,ho 81 t EH"F 6a the rGaInirsh
other fifteen are State banks Trihi..
dssigna,ed repositories are located in
thirty-iive that have qualifi.d are
scattered in twenty separate cominuni-
PRINCIPAL NEQUIREMENTS
OF THE VIRGINIA LAW
PROVIDING that no State money shall
he placed in n designated depository
until II shall have occurred some per-
son other than The hank itself in its
behalf TO enter Into a bond approvn1
ana accepted by thc Governor. for a
sum III the penalty OF at least 500 900
which sum, however shall at all times
DC double the amount OF money or
the Commonwealth that Ia on dpDosI,''
Ine Virginia iaw viii not permit more
IMAM about Si.iyo.O00 TO be on ucposii
AT any one time unless the present
hmouHt OF outstanding guaranty bonds
~ Increased so "a; always 10 be a: least
oo per CeSt greater than total amount
OF the deposits. The total amount of
money IN the state Treasury nj any
one time has never been as much AZ
So,oveDQt; and. when the 80 per cent
pond limit Is reached additional tom :
porary bonds have TO be called for
ny the Treasurer.
It is interesting in this connection
10 note that while outstanding state
uepSsLlS nave never reached The S.
opoo"e MARI they are now protected
WIN effective bonds amounting to more
than S"opn.po0 and by the combined
i'diu. UP capita! SUI Mus and undividcd
proh,s OF tho qualified depos!torIas
Whiscn on November l. 1915, amounted
SURETY BONDS CARRIED
IN EIGHT BONDING COMPANIES
The information on this subject de-
Vetoicd by Governor Davis shows that
me, sst"t 600 OF surety bonds whicn
tnrtes on January l. was carried hy
WEiSh are located in New York, three
IN BaltlE>or one in Hartford. conn
and one in Rlchnold The bonds o.