Omaha daily bee., 1921-08-28
Governor
Says State
Is Solvent.
Open Letter to State Treas
urer Shows Nearly $2,0OO,-
900 Available for Use
AT Once.
Road Work Not to Blame

Lincoln, Aug. 27-(Special)- y
Governor McKelvie in an open letter
to D. B. Cropsey, state treasurer, de-
nies the reported insolvency OF the
state of Nebraska and takes the fol-
lowing shot at certain Nebraska
newspapers, who have advertised to
the world that the state is broke:
II deprecate the erroneous and
misleading construction that has
been placed upon your statement by
some designing newspapers and poll
ticians, but time. alone will prove the
inaccuracy of their statements just
the same as it has done in the past. "
Governor McKelvie also informed
Cropsey that if he really wished to
help out in relieving the situation,
pending the receipt of the winter tax
money, that he has at his disposal
100000 worth of securities as cash,
to be reimbursed out of the per-
manent school fund when the money
comes in.
Had Additional $400, 900.
"You have at your disposal in ad-
dition to the $1,39l,72l.35, now on
hand for immediate relief, 100000
whenever you relieve the cash fund
of this burden" the governor wrote.
Continuing, the governor told
Cropsey that this situation was anti
cipated by him many months ago
and in his budget message to the leg
islature he recommended that a law
be passed making it possible to col
lect tax money at the same tirae that
the legislative appropriations become
due. Without such law, which the
legislature failed to pass, the COVER
nor outlines the situation as follows:
"The entire situation, created as
it is by the disparity between the
date when appropriations become
available for expenditure and the
date when taxes are collected to
cover them, is rather beyond the
control of anyone.
Sought Relief.
However, I have sought to re-
lieve it by requesting the more inn
portant expending agencies to set up
a 10 per cent surplus in certain
funds. l have also requested that no
contracts be let for capital expendi-
lures that will require payment be-
fore the tax money begins to come
in to meet such claims"
The governor also presented facts
and figures to deny the charge that
the road construction work under
way is responsible for the gaunt con-
dition of the state treasury. He
said:
"The roadwork that is being done
now, except that which is being
done by the state with prison labor,
is not being paid for and will not be
paid for until taxes have come in to
cover these claims.
No Money Paid.
"Of course, the money that comes
from the federal government is paid
over to the contractor without delay.
Thus. you will understand that of
the $2,728,726.46 that was appropriat-
ed for road construction, only
enough is being paid out now to
cover the expenses of administration
and engineering"
Treasurer Cropsey repeated today
a statement that the reported use
Of interest bearing warrants to
carry on the states expenses prob
ably would not be necessary.
The Bee explained the true situa-
ton this morning" Cropsey said.
THE state is just like a man work.
ing by the week, it isn't as flush
with money just before pay as it is
on pay day. The states pay day
will come when the taxes begin roll
ing in during the winter"