The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1932-05-02
HERE'S THE ANSWER
Bismarck, N. D.,
April 30. 1892.

April 30. 1892.
Editor, Tribune:
In letter appearing in the Bis
marck Tribune of April 10, 1882, Mr..
Emil Moses of Rock Hill township,
Wing, North Dakota. called attention
to cost of bonds issued to townships
and school district officers and re-
quests the state bonding fund to give
information.
The state bonding fund was not
established by accident due to a
spontaneous outburst of some legis-
lative assembly, but instead was eS-
tabliShed as consequence of long
demand from various political sub
the board Of county commissioners of
Cavalier county on January II, 1915,
1t was charged that bonds issued by
surety companies to the treasurer.
sheriff and clerk of court. totaling
SIS 900 cost only $4,000 in 1911, and
the premium on the same amount of
bonds for the same officials in 1913
and 1915 cost $4,000. At that time
the hazard in bonding public officials
was very small compared with the
last few years. They handled less
money and had no bank failures to
contend with, such as have been eX-
perienced since 1920.
A state bonding act was first pass
ed by the legislature of 1913, but be-
cause Of litigation in the courts, the
department was not allowed to func-
ton effectively until 1919, when the
legislature of that year enacted the
present bonding act under which the
department now operates. The rates
on all bonds certified by the state
bonding fund Is fixed at $3.50 per
81 900 for one year. A minimum pre-
MUM of $3.50 per year Is provided
for each official. The bond of the
state bonding fund covers any de-
fault or wrongful act for which the
bonded official may be liable under
the laws OF the state of North Da-
kota. The bonds of treasurer, clerk
and assessor of Rock Hill township
in amounts of $4,000, $500 and 81 900
respectively, for period Of two years
cost the township $40 in premium
According to a manual of rates pub
lished by surety company In 1914
the same bonds would have cost
$3.50 with a private company. Due
to increased hazards In bonding pub
lie officials it may properly be as
sumed that the charges by surety
companies would now be greatly in
creased over the rate of 1914, were
they writing the same business at
the present time. Then the question
is: What has the state bonding fund
accomplished to justify its existence?
Has 1t accomplished anything more
than to hold down premium rates?
Has it been of the intended service
to the taxpayers of the state?
It may be truthfully said that the
state bonding fund has more than
justified its existence. It has held
down premium rates and, at the same
time, made a profit Of more than SO
per cent. And 1t should be remem-
bered that the entire period during
which the fund has operated has
been most hazardous and clouded with
financial Universities, such as had not
been previously experienced in the
history of our state.
During the period Of operation the
department has collected $665 900 in
premiums and has paid out in losses
$3.50, 900. It now has q fund on hand
Of 1896, 900. The losses include pay
ment Of many claims to school dis
tricts and townships. The losses are
divided into three classes; the total
amounts paid being: $4,000 for en-
bezzlements and defaults; $1,000 fol-
negligence and error; and $4,000
for public funds illegally deposited
in banks closed.
The surplus in the fund Is invested
in North Dakota bonds, which guar.
antees the safety Of the fund ant
earns an annual interest income nov
amounting to almost so per cent Of
the average losses and operating ex.
penses combined. The amount in tn.
fund will eventually become large
enough 50 that the interest will pa!
all losses and expenses and the state
counties and various subdivisions viii
then receive good sound protection
without further cost to them.
r. E. TUNELL.
Mgr, State Bonding Fund.
|