The producers news. [volume] (Plentywood, Mont.) 1918-1937, 1929-01-11
County Financiers
By HANS RASMUSSEN

In the commissioners proceedings l
noticed a short while ago where the
commissioners had approved securities |
put up by the banks to the amount of
over $247, 100000 so take it for grant |
ed that the banks have borrowed
about that amount of the county
money at ONE HALF per cent inter
est.
Just why the bankers should be
handed this money at NO interest is
hard to understand. A person need
not be much of a financial wizard in
order to figure out that by investing
| it in government paper at 41a% he
would be making 40 without taking
any risk whatsoever. No wonder the
bankers are voting for one-half per
cent Commissioners. There was
time when the bankers paid 21a96 but
the commissioners in those days were
foolish enough to think this was to
the best interest of the county. They
did not know any better.
Some years ago Dan Olson invested
some of the county money in U. S.
! paper drawing 41a% and absolutely
secure. You should have heard the
| IOWl1 lbOG OIl1y 1IOIu IllG DdIlhGGS Dul
from the higher-ups in Helena. II
they could have done it Dan would
have been kicked out of office You
see, Dan had violated the law by in.
vesting the money where it would be
safe and draw more interest. Laws
E are funny aren't they. Most of then
: are fair only to those who had then
= made to order. Any honest person
= will agree that the present method O.
q investing county money is not fair t.
. the taxpayers. 1t would be interest
: ing to see what stand our newly elect
y ed farmer" representatives woult
! take if anything was brought up il
:, the legislature which would benefi
u the taxpayers but hurt the bankers.
Did you ever stop to figure out tn
reason why the bankers like to see tn
county in the hole financially. Tn
deeper in the hole the more none
they are making and the better the,
like it-discounting warrants is jus
a fat meal for them.
l am going to give you some fig
ures. l will admit they look crazy
nevertheless they are very interesting
am going to prove to you how
banker can make $6,052..79 by invest
ing $4,000 which does not belong t
him and on which he pays no interes
N We will take it for granted that tn
y county is in the hole and the bank
discount the county warrants 10%
Someone brings 800 warrant to tn
bank to have cashed. The banke
takes 500 out of your checking az
count money which draws no interes
He then pays 500 for the warrant an
keeps the $40. The $40 he puts OF
d. on SO interest for one year. Then h
rn takes the 500 warrant to the count
IN treasurer. The warrant is regarde
" as good security but the treasurer ca
sc not cash it as there is no money
10 the fund on which it is drawn bl
ne there is money in the county sinkin
or fund so the banker puts up the wa
en- rant as security and borrows $1(
III cash out of the sinking fund. II
a warrant which was left with Il
ce treasurer draws so interest. TT
all 500 which the banker got from Il
81 sinking fund is only drawing h%.
no Next day someone comes in aga
no with a 500 warrant. The bank
e still has the 500 in his pocket whic
re he borrowed the day before so tn
us time he need not take any money O.
re- of the bank. He pays the 800 for t
10 warrant, puts the extra $40 out at 6
ST. interest for one year, then goes to t
ne county and goes through the san
lp- performance as the day before and
en- on, and so on, every day for one yea
,,es Let US say that each warrant al
no each 800 sinking fund money will
ms called just one year after the tran
an action was made. On the first day
70 that year the banker collects the S
II with go making it $1,000 and pu
ge this in a pile. He then goes to t
county with the 500 in his peck
which he borrowed the day befo1
pays the 500 he borrowed one We
ago with Soc in interest. He then &c