The Nebraska independent. (Lincoln, Nebraska) 1896-1902, June 11, 1896, Page 2, Image 2
3 June ir, 1896. THE NEBRASKA INDEPENDENT. NEBRASKASCHOOL FUND (Continued from tnt page,) officers expressed themselves as being of the opinion that tne law wouia not per mit the Investment of the state's money in Nebraska state warrants and wanted an opinion from the attorney general. Th governor sent the resolution up to the attorney general's office next morn ing with this letter of transmittal: Executive Chamber, Lincoln, Neb., Jan nary 16, 1896. . Hon. A. 8. Churchill, Attorney General. Dear Sir: Agreeable to a desire as in formally expressed by yourself and other members of the board of educational lands and fnnds for time to consider the resolution presented by myself at the meeting on yesterday looking to the in vestment of a portion of the permanent school fund in registered warrants here to fore and hereafter to be issued I beg to enclose herewith a copy of the resolu tion for your consideration and, in do ing so, to call your attention to certain provisions of the law and opinions of the court which I have collated in my exam ination of this question and which, per haps, will assist you in your considera tion of the subject, towit: Sec. 8, Art. VIII of the constitution; Sections 24 and 26 of chapter 80, compiled statutes of 1893 edition; 25th Neb. C50; 40th Neb. 298 and 41st Neb. 277. Yours very truly, (Signed) Silas A. Holcomd. Now the duties of the attorney gen eral's office are not so engrossing but that they admit the frequent absence of the chief, his deputy and stenographer at Omaha where each holds his residence and takes care of his share of the politi cal machine. An entire week's absence of the attorney general from his office look ing after his political fences,, sometimes leaving the office in the hands of a clerk and at other times without even an office boy to tell where he has gone does not seem to interfere with the disposition of the legal affairs of the commonwealth, yet it took three months for him to frame an opinion to the effect that state warrants were not "state securities" within the the meaning of the law. The other members of the board declined to meet after the session of Jauary 15, giv ing the ready excuse that it was useless until General Churchill was ready to sub mit his decision. Here is what he said in overruling the supreme court, at the next meeting held April 18: Attorney General's Office, State House, Lincoln, Nebraska, April 13, 1896. To The Board of, School Lands and Fnnds. Gentlemen: In answer to a desire ex- Sressed at the January meeting of this oard, as then constituted, relative to the investment of the permanent school fund in registered state warrants, I have the honor to make to you the following reply: In the case of the state vs Bartley, 41 Neb., 281, it appears that this board as then constituted, passed a resolution substantially the same as the one offered by his Honor, the governor, for the action of this board. The difference be tween the two resolutions will be found in the following: The words in brackets are in the former but not in the latter. Those italicised are in the latter but not in the former. Therefore, be it resolved that the sum of (two hundred thousand dol lars) of the permanent school fund of the state of Nebraska, or as much thereof as may be necessary, be and hereby is set apart from which to purchase (pay) out standing warrants drawn upon the gen eral fund, which wan-ants are registered, and more drawn Between the first days of March and the thirty-first day of D( cember, 18i)G, (and bearing numbers from Nos. 12293 to 1C000) inclusive, and which are drawn in pursuance of an ap propriation made by the last legislature, it being determined by this board that said warrants so drawn are secured by the levy of a tax for their payment, (to gether with accrued interest, it being de termined by this board that said war rants are drawn in pursuance of an ap propriation made by the legislature) and therefore are state securities; and the state treasurer is (hereby authorized and) instructed to at once notify the (several) parties in whose names said warrants are registered of his readiness and willingness to pay the face value of said warrants and the accrued interest thereon, as they may be presented until said sum set aside is exhausted, and when so paid the warrants shall be held by the treasurer as an investment of the permanent school fund; and purpose to pay said warrants, bo that the interest on the same shall cease, as provided by chapter 93 of the compiled statutes of Nebraska) and shall be stamped and signed as provided by law. Resolved, also, that the further sum of two hundred and fifty thou sand dollars) of the permanent school fund of the state, or so much thereof as may be necessary, and is hereby set apart from which to purchase (pay) cur rent registered warrant already drawn, as well as those which may hereaftei be drawn against the general fund under appropriation made by the last legisla ture, it being determined by this board that such appropriations and the war rants drawn thereon are secured by a levy of tax for their payment and are therefore state securities: and the state treasurer is hereby authorized and direct ed to purchase (pay) as they may be presented at the state treasury, paying thereafter their face value and accrued interest thereon, if any, and to stamp, sign and hold the same as an investment of the permanent school fund as provid ed by law. Resolved further, (that the state treas urer) a member of this body be, and hereby is, empowered to act in his be half in determining any questions as to the genuineness and ownership of any and all warrants presented under the foregoing (two) resolutions and when (he is) in doubt he will refer the matter to the chairman to be , submitted to the board for its decision. It will thus be seen that these two res olutions differ in substance only in the use of the word "purchase" instead of the word "pay" but there exists no dif ference in what would actually take place; "the law regards the substance rather than the form" is an old axiom of the law. Section 9, article VIII. "And shall not be invested or loaned except on United States or state securities, or reg istered county bonds of this' state." They "shall be deemed trust funds held by the state, and the state shall supply all losses." Under this section it is clear that the state is the trustee of this trust fund authorized to invest the same in United States or state securities, or registered county bonds of this state, but bound to make good any loss even when so se cured. We are aware of the opinion given in 25 Neb. 665 that opinion is witnout jur isdiction in the court to make. Section 2, article VI is: "The supreme court shall consist of three judges a ma jority of whom shall be necessary to form a quorum, or to pronounce a de cision. It shall have original jurisdic tion in cases relating to the revenues; civil cases in which the state shall be a party; mandamus, quo warranto, ha beas corpus and such appellate jurisdic tion as may be provided by law." No one will claim that the opinion in 25 Neb., was rendered on an appeal, in habeas corpus, quo warm to, mandamus or that the state was a party, or that it related to the revenues. But if it was, it can be fairly said to have been over ruled in state vs Bartley 41 Nebraska 277, where the court held that such in vestment would amount to a transfer of the permanent school fund to the gen eral fund and was in violation of section 9, article VIII. But let us see what is a warrant. It is gimnlv the evidence of the indebtedness of the state to the individual. The use of the phrase "state securities must mean something more than merely the guarantee of the state by the process of taxation, for by the previous part of the session it is bound in any event to make good all losses; and this could and would in case of loss have to be made good by taxation, and the purpose of this phrase was to prevent the investment in such a way as might lead to loss and necessi tate taxation to supply the loss. We must therefore ascertain the real intent in the use of this phrase. Worcester defines "security" to be any thing given as a pledge as for the pay ment of a debt, or the performance of a contract. He defines "secure" to make certain; to put beyond hazard." Anderson's dictionary of the law de fines "secure" to make safe, or certain, to protect, to save. And "security" an instrument which guarantees the cer tainly of some specific thing; a surety." The same author says: "a tax is not a debt, that it is an obligation for the pay ment of money founded on a contract." "A tax is an impost levied for the sup port of the government or for some special purpose authorized by it." We concluded that the word "securi ties" as used in this section of the con stitution means some obligation which the state has in some specific form con tracted to pay, and that a warrant drawn by the auditor of public accounts on the general fund is not such state se curity as was contemplated by this pro vision of the constitution. Had it been the intention to so invest that fund in warrants it seems to me that the fram ers would have used the word "war rants" and not "securities." I am further persuaded that I am cor rect in my conclusion from the decision of the court in state vs Bartley, 41 Ne braska, 298 and state vs Bartley, 39 Nebraska. 353. The legislature must also have regard ed this section 3 of article VIII of the constitution as precluding the invest ments as indicated by these resolutions, or it would not have passed a resolu tion to amend the constitution, provid ing the amendment of this section 3 ar ticle Vll I so as to make it read as fol lows, in relation to the investment of the permanent school iund in registered warrants: "And provided further that when any warraut upon the state treasurer regu larly issued in pursuance of an appro priation by tne legislature and secured by the levy of tax for its payment, shall be presented to the state treasurer for pay ment, and there shall not be any money in the proper fund to pay such warrant, tne board created by section one of this article may direct the state treasurer to pay the amount due on such warrant from moneys in his hands belonging to the permanent school fund of the state. and he shall hold said warrant as an in vestment of said permanent school fund." iti is being the interpretation triven both by the court and the legislature. I conclude that this board is not author ized to invest the permanent school fund as indicated by the resolutions of his Honor. Yours Respectfully. Signed A. S. Churchill. A more remarkable document per haps never emenated from the legal de partment of the state and it is safe to say that no lawyer of ability with an atom of professional pride, would give to tnis aocument nis endorsement. It was made to fit the occasion and to pre serve in the hands of the state treasurer the funds belonging to the schoolchil dren of Nebraska in order that J. 8. Bartley and not the state should reaD a revenue thereby. I he announcement of this opinion was not a surprise to Governor and he was prepared to give them another nut to crack. It came in the form of this reso lution: RESOLUTION. Whereas, It is provided by constitu tional and statutory enactment that all funds belonging to the state for educa tional purposes, the interest and income wnereof, only, are to be used, shall be deemed trust funds held by the state and shall remain forever inviolate and undi minished, and that such funds, with the interest and income thereof, are Bclemly pieagea lor me purpose lor wnicn they are granted and set apart; and that the board of educational lands and funds shall at their regular meetings make the necessary orders for the investment of the principal of the fund derived for edu cational purposes aforesaid; and, wnereas, it appears that the unin vested permanent school fund of this state has grown from 1417,313.61 on December 1, 1894, to 611,111.67 on March 1, 1896; that, during all of said time there has been purchased and ob tained as an investment for the benefit of said permanent school fund the sum of $ 45,360.61, or less than 8 per cent of the total sum required to be invested as aforesaid; and Whereas, It has heretofore been deter mined by a vote of a majority of this board that said fund cannot be invested in state warrants which are being issued from time to time, and which draw inter est at the rate of 5 per ceut per annum; and Whereas, It appears that but few county bonds are being voted from time to time in the different counties of the state, and, when voted, it is extremely difficult to obtain the same as an invest ment for the said permanent school fund because of the desirability of such bonds as investments and the competition aris ing over securing the same as a private investment; and Whereas, It appears from the market quotations as to prices of United States government bonds that the same may De obtained by the state as an invest- Low Special Mention "NEBRASKA INDEPENDENT." ment for the said permanent school fund upon a basis that will earn for the said permanent school fund at least 3 per cent interest per annum, which is more to be desired and advantageous to said fund than to allow the same to re main idle, earning nothing for the benefit of the common schools of the state; therefore be it Resolved, By this board that the sum of $500,000 be set aside for the purchase of United States registered or coupon 5 per cent bonds, redeemable February 1, 1904, and the state treasurer is here by authorized and directed to purchase said United States registered or coupon bands for the benefit of said school fund to the amount of $500,000.00, as afore said, upon the most advantageous terms and upon a basis of a rate of in terest thereon not less than 3 per cent per annum, and that said purchases be made as follows, to-wit: $100,000.00 on or before May 1, 1896; $200,000.00 on ar before June 1, 1896; $200,000.00 on or before July 1, 1896. Provided, That if, at any time before the last mentioned date, said money or any part thereof, before being invested as above contemplated, can be invested in United States or state securities or county registered bonds yieldinga great er rate of interest than hereintofore mentionod, upon an order being made by this board then said amounts bo invest ed shall be withdrawn from the amount heretofore -set aside for investment in United States securities as aforesaid. The annoyance of the republican ma jority was very evident and the resolu tion was simply ignored.no action what ever being taken. Some of the members expressed a willingness to invest in coun ty bonds, although only a few days prior to this they had compelled the board of county commissioners of Otoe county to sell their issue of $85,000 to Dietz, Deni son & Prior, of Cleveland, Ohio. The Otoe county bonds drew 5 per cen t interest.and, although the board had accepted Greeley county's $30,000 at 4 per cent under pressure from the governor, they de manded 5 per cent from Utoe. The reas on was apparent. Ihe Otoe issue of $85,000 would cut too big a hole in the funds distributed among favorite banks for the pecuniary profit of the treasurer and the political good of his party. When the Otoe county commissioners went home Commissioner Russell, as sec retary of the state board, without any authority whatever except the consent 01 nis republican associates, and without the knowledge of the governor, who, is chairman of the board, wrote to them that they would have to accept at once if they wanted to dispose of their bonds; as the board had proposals under con sideration that would take all the avail able funds on band. With over $600,- 000 supposed to be in the treasury for the permanent school fund, this officer tells the people who are seeking to give a reasonable interest to the state for the use of a part of this sum, that there is on hand only enough to meet propositions under consideration. At that time there was under consideration, if anything, only the resolution of Governor Hol- comb to invest in United States bonds, and it had been refused consideration, in fact. The only reasonable construction to be placed on this letter is that the treasurer doesn't have on hand this per manent Bchool fund. No propositions may ue sufficient to invest all of the school funds of the state the treasurer could produce. At the Way meeting of the board Gov ernor Holcomb sprang another surprise on nis associates by submitting a pro position for the purchase of the Otoe county bonds from the Cleveland firm at a rate yielding 4 7-10 per cent interest to the state, This is the way the resolu tion read: "Whereas, The authorities of Otoe county, Nebraska, have issued refunding bonds of said county in the sum of eighty-five thousand dollars ($85,000), dated May 1, 1896, drawing interest at the rate of five (5) per cent per annum, payable semi-annually on the first days 01 May and JNovember of each year, and payable in twenty years with the option 01 payment after ten years: and, "Whereas, Said county authorities have sold said bonds to Dieti, Denison & Prior, of Cleveland, Ohio; and "Whereas, The parties purchasing said bonds offer to Bell the same to the state of Nebraska as an investment for the permanent school fund (subject, how ever, to an option given on said bonds expiring Thursday, May 14, 1896), for the sum of one hundred and three cents (103 cents) on the dollar and accrued interest, thereby yielding a rate of four and seven-tenths (4 7-10) per cent inter est upon the face value of such bonds for the benefit of , the temporary school fund; therefore, be it "Resolved, That said oner be and it is hereby accepted, provided, that said bonds are in all respects regularly and legally issued and registered as required by law; and the state treasurer is hereby authorized and directed to pay said par ties for said bonds one hundred and three (103) cents on the dollar, par value, and accrued interest thereon to the date of purchase out of the permanent school funds now in his hands, and to receive, stamp and hold said bonds as an invest ment for said permanent school fund as required by law; also that the secretary of this board be requested to notify Dietz, Denison & Prior of the board's ac ceptance of their offer." This followed directly after the accept ance of the Greeley and Boone county bonds at 4 per cent, so the board could not complain of the rate of interest. The only way out of the dilemma was to render the proposition so distasteful to the brokers that it would be declined. To this end Commissioner Russell amend ed the governor's resolution with the pro vision that the brokers would have to accept their premium out of the interest coupons. With this absurd amendment the final result is uncertain. In regard to this matter the Custer County Beacon says: In an editorial in last week's issue the Broken Bow Republican had the effront ery to place on the shoulders of Govern Summer Rates. Write For Catalogue, -A.dd.ress or Holcomb the responsibility for the noninveBtment of the $611,000 of the permanent school funds of the state. It can hardly be that the Republican editor speaks from ignorance, for the state press has been replete for months with information as to the latest effort of his excellency to get the state funds invest ed. The disinclination of the treasurer to allow these funds to be invested in state, county or government bonds.may arise either from his desire to continue drawing interest himself from banks for the deposits, or his inability to produce the state's funds, or both. Mr. Bartley has the united support of the board of educational lands and funds in keeping his grip on the state's money. As a fifth member; constituting in himself a hopeless minority, Governor Holcomb has succeeded in worrying the majority by a series of resolutions and proposals to invest funds, and has compelled the gang to show their hands. , After recounting the many efforts make by Governor Holcomb to induce the board to invest this fund as required by law, the Beacon asks: Can the editor of the republican at tempt to say that Governor Holcomb was at fault because the school fund was not invested? Most any other man would have given up in dismay, but the governor did not. He introduced a res olution two days later to invest the fund in government bonds. Although he evi dently preferred the state securities, be was willing to place the funds in any safe investment by which the state could receive a return in interest. This resolu tion was hung up to dry, and the board has declined, by action of the unanimous opposition to Governor Holcomb, to consider it at all. Determined to do all in his power to force his colleagues on the board to take some action looking toward the invest ment of this great sum of the state's money which is supposed now to be lying idle in the vaults of the treasury, the governor hae sought out investments from all parts of the country. He it was who proposed the purchase of $6,500 of Valley county refunding bonds, $40,000 of Otoe county refunding bonds, $30, 000 of Greeley funding bonds and $25, 000 of Boone county court house bonds. A great many men in different parts of the state dreading the loss of Nebraska's school fund, have written to enquire about it. Of these letters we publish the following: Kearney, Neb,, June 6, 1896. Editor Independent: In the cam paign of 1894 I publicly made the charge on suspicion, that the state school funds reported on hand in the treasury were not there nor available at the call of the treasurer. Of course I could not know where the money was, but then expressed the belief that the $540,000 reported on hand by the auditor had been deposited in the banks which "stood in" with the state house politicians and that those banks could not produce the money. Was my suspicion correct? If not then why was this money kept on hand as re ported by Ihe auditor? Why was it not invested as required by law? Section 8, chapter 80 compiled statutes, passed in 1885, requres the board of educational lands and funds to invest the state Bchool funds, and section 25 provides that they shall be invested in United States or state securities or in county bonds, also that state warrants on other funds may, under certain conditions, be paid out of the permanent school fund. One of two things must be true, either the permanent school funds now said to amount to $600,000, are not on hand nor available, or the board has persist ently violated the law by refusing to keep it invested. The recent effort of Governor Holcomb to have the board do its duty, ought to be followed by vig orous action in the campaign this year. Not only should Governor Holcomb be reelected but the voters must see to it that n populist treasurer, auditor and attorneo-general be elected, if no more. Then we can make a search for that $600,000 and if found, proivde for its safe investment. - Then if we can elect a legislature, necan provide for the ap pointment of a legislative committee once in two years to settle with the state treas urer so that a faithful record may al ways be made and kept on the state's financial condition. In closing I would like to know just for curiosity if the republican secretary of state, treasurer, attorney-general and comtnifsioner of public lands and build ings voted against Governor Holcomb's resolution to invest the funds because they knew those funds had vanished. Yankee like, I am "guessing" that is the reason. W. L. Hand. Never Mind the Democrats. S. H. Kipp, chairman of the campaign committee of the South Dakota Reform Press Association predicts that ao mat ter what the result of the democratic national convention, the people's party in South Dakota will gain 4,000 demo cratic and from 6,000 to 8,000 republi can votes this year. He says that the political situation in South Dakota at this time is more promising for the peo ple's party than it has been at any time in the liihtory of the party. asy to Take asy to Operate Are features peculiar to Hood's Pills. Small In size, tasteless, efficient, thorough. As one man said: " You never know you have taken a pill till it is all Q) I I over." 25c. C. I. Ilood & Co., li 1 1 I S Proprietors, Lowell, Mass. The only pills to take with Hood's Sarsapartlla. VERY MUCH SURPRISED. The Result in Oregon Knocks the Gold Bugs Crazy. Washington. June 8, 1896. Special to the .Independent: The news from Oregon, showing that the people's party has elected two congress men in Oregon, (that is, every congress man in the state) at the election last week has greatly surprised the politi cians of both of the old parties here. The fact that it was a straight right between the three parties, and that the people's party candidate defeated both the dem ocratic and republican candidates, adds to the chagrin and disappointment of tne gold men and the old party leaders. The result, however, was confidently ex pected by the people's party senators and congressmen, who have been greatly interested in the fight in Oregon, and have kept close in touch with the pro gress and details of the great campaign that has been waged there for the last few months and which has resulted in such a triumphant victory for the peo ple's party. This is more than a straw which shows which way the political wind is blowing. At least it is a good starter lor the great national campaign this year, and shows not only that the people's party will be an important fac tor in the same, but also shows to the clear observer of political affairs that the people's party is not only growing rapidly in strength, but that it will yet redeem the nation from the clutches of the English gold ring in spite of the infamous treachery and duplicity of the two old parties for the last twenty years. The gold men are anxious to have congress adjourn as early as next Wednesday or Thursday, but it is by no means certain as yet that the senate will decide to adjourn so early. CARELESSNESS Often Causes No End of Trouble Probably half the people who see this article suffer from piles. It is one of the commonest diseases, and oneof the most obstinate. People have it for years, and just because it is not immediately fatal they neglect it. Carelessness causes no end of Buffering. Carelessness about so simple a thing as piles has often caused death. Hemorrhages occur during sur gical treatment, often causing death. Piles are simple in the beginning and easily cured. They can be cured even in the worst stages without pain or loss of blood, quickly, surely and completely. There is only one remedy that will do it Pyramid Pile Cure. It allays the inflammation immediate ly, heals the irritated surface and, with continued treatment, reduces the swell ing and puts the membranes into good, sound, healthy condition. The cure is thorough end permanent. Druggists sell the Pyramid Pile Cure at 50 cents. Send for free book on Cause and Cure of Piles. Illinois Waking up. John P. Steele of the Mt. Vernon Pro gressive Farmer, who has been uninter ruptedly in the reform work since 1883, recently made a tour of all the lower counties of that state. He reports that in all the years of reform agitation, he never saw the people take so great an interest in the money question. 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McNERNEY & EAGER, Attorneys, 1034 O Street, Lincoln, Neb. SHERIFF SALE. Notice Is hereby given that by virtue of an or der ot sale Issued by the clerk of the district court of the Third Judicial district ol Nebraska, within and for Lancaster county. In an action wherein William Wertrer ia plaintiff, and Robert J. Greene et al., defendants, I will, at 2 o'clock p. m.. on the 23rd day of Jane, A. I)., 1896, at the east door of the conrt house. In the city of Lin coln. Lancaster, comity, Nebraska, offer for sale at public auction the following described real estate to-wit: Beginning at the northwest corner of the north half of the northwest quarter of section twenty eight (2HI, town eight (81 range six (6), east, and running thence east to the west line of the pro jected right of way, depot and switching ground! of the Chicago, Kock Island & Pacific Railway Co., as the same is now surveyed and staked and laid out across said north half of the northwest quar ter of section twenty-eight (28), township eight (81, range six (tt). thence southwesterly along said line to the Intersection of said projected Chicago, Rotk Island & Pacific Railway Co. grounds with the sooth line of said north half of the northwest quarter of section twenty-eight (28), township eight 18), range six (61 east, thence west to the west line of said north half of the northwest quar ter of said section twenty-eisjht (28), thence north to the place of beginning, in Lancaster county, Nebraska. 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