Rensselaer Semi-Weekly Republican, Volume 39, Number 103, Rensselaer, Jasper County, 3 September 1907 — PASSING OF THE OLD SYSTEM OF LENDING AND INVESTING PUBLIC FUNDS FOR BENEFIT OF INTERESTED OFFICIALS. [ARTICLE]

PASSING OF THE OLD SYSTEM OF LENDING AND INVESTING PUBLIC FUNDS FOR BENEFIT OF INTERESTED OFFICIALS.

-i [Special Correspondence.] Indianapolis, Itid., Sept. 4. —Indiana j Is now entirely without branch banks, | according to announcements that come ' from the auditor’s office. Sev- | eral weeks ago Auditor Billheimer ordered all the state and private branch banks closed pursuant to an opinion by Attorney General James Bingham to the effect that they were without lawful existence. V For several days folllowing the order anonymous Jejfers were received at the office tellling of banks that were in operation ' on the sly,” hut the auditor hunted down the banks and forced them to close. A total of eight branch banks closed their doors, the last being the branch bank operated by the People's State bank at Brownstown. ' This action was taken under a law enacted by the recent which the Democratic politicians and editors delighted to criticise. This law has speedily enabled the auditor to rid the state of a dangerous and very unSeiirable class'of banks where the people’s money was not always safe. “System" Has Short Life.

It will be only a short time until the complete passing of the old system of lending and investing public funds for the benefit of the officials will be witnessed. It will be a great day for the Republican party whose representatives took the initiative for the purification of public offices. Almost from the earliest history of the state officials entrusted with public funds have Invested then? in their own behalf. The result of long years of untrammeled growth was that the "system” was deeply imbedded in the political side of public life. The hope of obtaining this unfair reward caused many good men to enter politics and do degrading things. Men became willing law violators just for the sake of reaping a reward that did not belong to them. As bad as the “system” was Its votaries were numerous and powerful. When the Republican party took a definite stand againßt them in its platform a great hue and cry went up from one end of the state to the other. That was the beginning of the end of the system, however, for in spite of the efforts of the Democrats the Republicans passed the public * depositories law, under which the public and not the officials will receive the investment of all public money.*... A State Financial Board.

The depositories law will become effective Dec. 16. On that day the governor, auditor and treasurer of state will meet in the auditor’s office to organize the state board of finances, which shall have charge of finding depositories for the state's money. The city, county and township boards of finance will be formed at the same time, as the new system is to supplant the old in every office. Governor Hanly will he chairman of the state board and Auditor Billheimer secretary. The opponents of the new plan predicted during the recent session of the legislature that bankers would refuse to handle the public money, but the indications are that there will be strong competition for it. There is no means now of estimating how much revenue the various forms of government will reap, but in long-time deposits 3 per cent interest will be received; in other deposits, 2 per pent. The amount is sure to “be sufficient so far as the state’s funds here are concerned, to pay the expenses of nymy departments. Private Banks Helped.

Jn order that private banks may become public depositories John C. Billheimer, auditor of state, is sending letters to all the banks in the state, telling them that they may be examined In advance of Dec. 1. The letter is as follows: "To the Private Banks of Indiana: "It has been decided by the state board of finance that no bank will be accepted under the public depository law of 1907 except such as have been shown by recent examination to be solvent and In good condition. The effect of this decision is that private banks desiring to aocept the benefit of the depository law must be examined by me through the bank department before they can do so u _JUader the law of 1907 governing private banks the examinations of such banks will not be commenced until Dec.' I,'At the same time the depository law becomes effective.

"Aa a matter of convenience to any private bank dealing to act under the depoaltory law I will arrange to examine it in advance on receipt of a request therefor, and an agreement to pay the statutory fee for examination. In order to prevent a rush in December, I suggest that such requests be sent to me early.” Auditor Billleheimer says that up to date forty private banks have asked that they be examined before Dec. 1. The belief is growing that this new pieoe of Republican legMaUon will not only do away with a pernicious system, but will give the yubttc move —uranee that its money la handled easels.