The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1926-04-06
ORR STARTS INQUIRY;
COSGROVE IN CHARGE
Says Shortage Incurred by
Pre- Payment of improve
ments Costs Causes Pub
lie to Lose Returns While
Bond Charges Go On.

Lawrence r. Orr, chief examiner
of the State board of accounts, to
day announced an investigation is
under way to determine the amount
Of the deficit incurred In the In
dianapolis Barrett law fund by a
Federal Court decree defeating the
intent Of the State law under which
it is collected, and met each year by
the city.
The fund is in custody of the
county treasurer, Who is ex-officio
city treasurer. The treasurer is not
to blame for the deficit. He is COM
plying with Federal Court decree
in 1908, which prevents the city con-
troller from investigating prepay
ments under the Barrett law in in
terst bearing securities to pay inter
est on bonds issued under the same
law.
The funds collected under the
Barrett law, which Orr said might
total from one to four million dol
lars, are installment payments on
streets, alley, sidewalk and sewer
improvements. The fund is to retire
bonds issued when improvements
are made.
Court DEGREES
The Federal Court decree and a
Marion County Superior Court rul-
ing holds the fund is not a public
one, but a trust fund with the treas
urer as trustee. Treasurers for years
have pocketed interest earned by the
fund, approximately $4,000 a year,
| while the city pays the deficit.
EFF the (Marion) County treasurer
carried the funds around in his vest
pocket and lost them or stole them
the State couldn't convict him of q
criminal charge or collect for 1t on
his bond," Examiner William Cos
grove, in charge Of the investiga-
ton, declared.
Proponents Of street assess
ments are made to escape interest
charges by persons who, when the
assessments were made, elected &c
pay in installments. When they pay
up in full, the treasurer deposits the
money and takes the interest ii
earns until the bonds are due. But
payment Of the bond interest must
be kept up, creating a deficit. AS
a result Orr declared taxes are
levied to meet it, on all property
owners instead of just those
benefited by the improvement.
What Law Meant
The law had contemplated meet
ing these bond interest payments by
interest from securities the city con.
troller would buy with such pre-
payments. But the city controller
cannot buy the securities because he
cannot draw a warrant on the fund
as the Federal Court decree restra1ns
the treasurer from putting it in a
public depository.
The Federal Court decree was is
sued on complaint of the Barber
Asphalt Paving Company of West
Virginia against former treasurer
Ed. J. Robinson, restraining him or
his successors from depositing in
any public depository money col.
lected through special assessments
made by the city for improvement
of streets or other public improve
ments.
Under this order treasurers de
posit the money in their own names,
and by law, according to Examiner
Cosgrove, are only morally and
legally responsible for having it to
pay off bonds and to turn over to
their successors.
Demurrer Upheld
| When Edward Sourbier was treas
urer the attorney general sued to
break up the arrangement in Marion
! County Superior Court, but Sour
bier's demurrer that the fund was