Town Deposit Fund.

[Compilation of 1888, Chapter XIV.]

An Act to regulate the deposits of the public money was passed by Congress and approved June 23, 1836. The provisions relating to the Town Deposit Fund are as follows:

And be it further enacted, That the money which shall be in the Treasury of the United States, on the first day of January, eighteen hundred and thirty-seven, reserving the sum of five millions of dollars, shall be deposited with such of the several States, in proportion to their respective representation in the Senate and House of Representatives of the United States, as shall, by law, authorize their Treasurers, or other competent authorities to receive the same on the terms hereinafter specified; and the Secretary of the Treasury shall deliver the same to such Treasurers, or other competent authorities, on receiving certificates of deposits therefor, signed by such competent authorities, in such form as may be prescribed by the Secretary aforesaid; which certificates shall express the usual and legal obligations, and pledge the faith of the State, for the safe keeping and repayment thereof, and shall pledge the faith of the States receiving the same, to pay the said moneys, and every part thereof, from time to time, whenever the same shall be required, by the Secretary of the Treasury, for the purpose of defraying any wants of the public treasury, beyond the amount of the five millions aforesaid; Provided, That if any State declines to receive its proportion of the surplus aforesaid, on the terms before named, the same shall be deposited with the other States, agreeing to accept the same on deposite in the proportion aforesaid:

And provided further, That when said money, or any part thereof, shall be wanted by the said Secretary, to meet appropriations by law, the same shall be called for, in rateable proportions, within one year. as nearly as conveniently may be, from the different States, with which the same is deposited, and shall not be called for, in sums exceeding ten thousand dollars, from any one State, in any one month, without previous notice of thirty days, for every additional sum of twenty thousand dollars, which may at any time be required. Sec. 13.

And be it further enacted, That the said deposites shall be made with the said States in the following proportions, and at the following times, to wit: one quarter part on the first day of January, eighteen hundred and thirty-seven, or as soon thereafter as may be; one quarter part on the first day of April, one quarter part on the first day of July, and one quarter part on the first day of October, all in the same year. Sec. 14.

In the same year the General Assembly of this State passed an act authorizing the Treasurer of the State to receive from

the Secretary of the Treasury of the United States, for deposit in this State, the share or proportion of the public moneys of the United States, which this State was entitled to receive, in pursuance of the above Act of Congress. The Treasurer was authorized to pledge the faith of the State for the safe keeping and repayment of the fund.

It was provided that this money should be deposited with the several towns in proportion to their respective populations, upon condition that the money should be paid into the State Treasury whenever the payment thereof should be required by any act of the General Assembly, or by proclamation of the Governor, for the purpose of returning the same to the Treas ury of the United States. It was further provided that no payment should be made to any town until the Treasurer of the State had received a copy of a vote or resolution passed in town meeting, giving the consent of the town to receipt for its proportion, on the terms and conditions specified.

The conditions on which any town might receive its proportionable share of the money, were as follows:

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'First, That such town keep and preserve the money as a deposit, and in trust for the State.

Secondly, That it appropriate the entire income or interest thereof, annually, at least one-half thereof for the promotion of education in the common schools in such town, in such manner and proportions as such town may direct; and the remainder for the purpose of defraying the ordinary expenses of such town.

Thirdly, That it make good each and every deficiency in the amount received, should any loss occur through mismanagement or any other

cause.

Fourthly, And that it repay into the State treasury the whole amount received therefrom of said money, or such part thereof as may be required, whenever the same shall be called for in the manner specified in the first section of this act."

The section directing how the interest should be appropriated was as follows:

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SECTION 10. The interest or income arising from the said town deposit fund, shall in each town be annually appropriated, not less than one-half thereof, for the promotion of education in the common schools in such town, in such manner and proportions as such town may direct and the remainder for the purpose of defraying the ordinary expenses of such town, and for no other purposes. The legal voters in each town,

at an annual town meeting, or at any special town meeting legally warned for that purpose, may decide whether the said remainder of said income, derived from said fund, or any part thereof shall be appropriated in like manner for the support of common schools in such town, or whether the same or any part thereof shall be appropriated for the purpose of defraying the ordinary expenses of such town, or to both of said objects, as may be deemed most beneficial to the interests of such town."

In 1855 the act was passed requiring the whole income to be devoted to common schools.

The manner in which this money should be loaned and the methods of its management were very full and specific.

At first it was provided that loans should be made only upon notes secured by mortgage upon real estate of double the value of the loan; the expense of mortgage deed and recording were to be defrayed by the borrower, and the fund was to be exempt from any expense of management or expense of any kind relating to its concerns. This stringent provision remained until 1846, when bank stock and bonds of any city were added to the securities which might be bought. In 1859 all the earlier restrictions were removed and money might be invested in "the bonds or securities of any city or town" in the State. The amount originally turned over to the State and distributed to the towns was $763,661.83.

The following table gives the amounts in possession of each town in 1847, and the amounts reported in December, 1887, with the present investment of the same: