$20 per acre, and the land has been sold at $10 per acre after the pine timber was removed. The original grants to our state for school purposes amounted, according to the estimates of the earlier reports, to 1,474,720 acres. After the sale of all but 60,000 acres the state can show but about $2,000,000 in its school fund credited to this source. Our magnificent heritage, the sacred birthright of helpless children, has been squandered and plundered by ruthless hands.

The Hon. A. C. Barry, in his report as state superintendent in 1858, deplored the gross negligence in dealing with the school funds. He said at that time, "Whoever attempts to divert any portion of our sacred school fund from its consecrated purposes of education should feel that he is treading on holy ground. That noble fund is the hope of our people,-of 264,000 children now living in our midst, and of millions yet unborn. They crave the boon of education, which is their chief, as well as their best inheritance, and for that education they must ever rely upon the people's colleges, the common schools of our state. Those children need a fit preparation, for they must soon wield the destinies of Wisconsin. Every dollar abstracted from the school fund, under whatever plea, will yet have to be replaced with more than compound interest, or ignorance, vice and crime will be the penalty of our children, and our children's children will have to suffer as a natural consequence of our misguided folly."

I recommend that the legislature order the immediate withdrawal from the market of all school lands owned by the state, and that no further sales be made until the value of these lands be fixed by competent and reliable appraisers. . . . I also recommend that the legislature give authority to some competent officer, who is interested in the enlargement of the school fund, to examine the dockets of justices of the peace and to commence action against those who do not make complete records of all convictions and fines on their dockets, or who do not report and remit the fines collected by the proper county officers.

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The language of the constitution clearly expresses an intention to make the school fund a perpetual, productive fund, the purpose of whose income should be to lessen the burden of taxation for school purposes. It was to stand side by side with the industries of the state in producing a revenue sufficient to meet the demands of the state for popular education.

It will be observed that the fund is derived from sources which entail no burdens upon the people of the state. The purposes of

the fund can be realized only when it is in actual existence as a productive fund, independent of the taxable property of the state. The state government was made its trustee, and the people of the state its beneficiaries. A brief statement of the present condition of the school fund is necessary to make evident the manner in which this sacred trust has been administered.

The nominal amount of the school funds is $5,652,461.59. The report of the Secretary of State shows that $2,251,900 of this amount is in the form of certificates of indebtedness of the State of Wisconsin, and the remaining portion is invested in bonds, in accordance with the law. The certificates of indebtedness are evidences of the disappearance of nearly half of the school funds. The rate of interest on these certificates is 7 per cent. The state is thereby made debtor to the funds to which it bears the relation of trustee. The disadvantage that follows is evident. Instead of a productive fund whose income diminishes the weight of taxation, there is a state debt by reason of which the annual tax levy is greatly increased. A debt is not the equivalent of a productive fund. Were the entire fund available for loans in accordance with the requirements of the constitution the income would be a charge upon private enterprises, and its use for public purposes would, to that extent, lessen public burdens.

The common school fund may be taken as an illustration. For the year ending September 30, 1892, the entire common school fund income was $205,047.85. Of this amount $109,459 was derived from the interest upon the certificates of indebtedness, and was raised by a tax upon the industry of the people of the state. Only a small part of this would have been necessary had the entire fund been invested in the bonds of public corporations, as the fund in such case would have well-nigh earned an equivalent amount to take the place of the tax as a revenue to be used in the support of common schools. No difficulty is experienced by the present commissioners in making safe investments of all the available school fund. The demand is greatly in excess of the amount at their disposal.

The law which directed the investment of the school fund in the purchase of state bonds provided for the cancellation of the bonds and the substitution therefor of the certificates of indebtedness. The certificates are non-negotiable and non-transferable. No provision whatever is made for their payment. The discretionary authority of the commissioners, who are clothed with constitutional powers over its investment, is thereby destroyed by the force of statutory enactment. The effect is the creation of a perpetual state debt, requiring the levy and collection of an annual state tax to

the amount of $157,570 to pay the interest thereon. The interest paid by the people thus far amounts to more than $4,200,000 ($7,350,000 by 1912), and the process seems only just begun. It is thus apparent that additional burdens of taxation are the only fruits of the school fund, the very result it was intended to avoid.

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A diligent study of the records and a careful examination of the laws and of the published reports have not enabled me to write the history of the depletion of the school funds. The variation of the ledger accounts at Madison and Washington, the divergences in the various official statements, many of which are not here enumerated, the absence of all original vouchers in one large. account, and the disappearance of many others in other accounts whose files are ostensibly complete, render any attempt at making a trustworthy statement precarious. It would have afforded me great satisfaction to have been able to give such a clear and complete account of these transactions as the books of a great business enterprise honestly managed ought to show. This seems evident : That a wise administration of all the provisions relating to the school fund should have resulted in a permanent endowment of from $15,000,000 to $20,000,000; that we have instead cash and money invested to the amount of $3,401,461.49 and a permanent state debt of $2,251,000; that the application of the available productive funds to the liquidation of the state debt would practically leave the state as though no provision had ever been made for the support of its schools; that the necessity for the disappearance of this money is not apparent; that the laws and the records bear witness to transactions of more than doubtful propriety, and that the security for the debt is of questionable validity.

III. THE MINNESOTA SCHOOL FUND

[From an unpublished paper, "Conservation in Minnesota by Early Pioneers," by Julius A. Schmahl, Secretary of State.]

It is significant to note that the grant of land for our state University was made by Congress in 1851, many years before the state was organized. To-day we are claiming the largest school and University fund of any separate political organization in the world. Our school fund now amounts to more than $21,500,000, and we still have approximately 3,000,000 acres of land. Our remaining lands have great wealth, fertile soil, abundance of grow

ing timber, and the value of our iron ore deposits belonging to the state school and university funds, is almost beyond comprehension. We have nearly one thousand forty acre tracts of land under mineral contracts in the iron-bearing districts, from which it is believed the state will receive an average of 1,000,000 tons for every forty acre tract, or a grand total of one billion tons, which at a royalty of twenty-five cents per ton, the present contract price, will produce the sum of $250,000,000. This princely endowment will be realized within fifty years, or before the state has passed the century mark in age. Of this sum it is estimated that the permanent school fund will receive $170,000,000, the university fund, $30,000,000 and the remainder will pass into the swamp land fund, one-half the income from which goes to the school fund and the remainder to assist in maintaining our state institutions. These immense funds invested to produce not more than four per cent interest will bring an annual income of more than $6,000,000 for the support of our public schools and $1,200,000 a year for the state university. This is indeed a magnificent endowment and a positive guarantee of popular education for the youth of Minnesota for all time to come.

The boys and girls of the present and future generations of Minnesota are and will be profoundly grateful for the splendid educational opportunities thus provided for their welfare. And every act of our present state officials is to show the appreciation of what our forefathers have done by zealously guarding these great trust inheritances and by wisely and economically expending the income which is being derived from them. That future official guardians of the trust will continue to do so is manifested by the keen interest which the present generation displays in this glorious heritage.

The estimates which I have given of the income from our iron lands may seem very large, but the figures are borne out by the tables already actually compiled and listed with the state tax commission for taxation purposes of those properties which have already been explored or developed for the discovery of iron ore. The lessees from the state, already covering twenty-six contracts for mines and containing ninety-nine forty acre tracts, have listed 98,446,488 tons of iron ore. Seven contracts covering sixteen forties of university land, have a listed tonnage of 8,408,495 tons and seven contracts of state swamp lands, covering twelve forties have listed a tonnage of 30,658,341, or a total of one hundred and twenty-seven forties, and an aggregate tonnage of 137,513,324 tons. This is the tonnage actually given by the lessees from the state for taxation purposes, and only covers that portion of the

leases which have been actually explored. It is therefore perfectly safe to assume that this amount is not over-estimated. In fact from the knowledge of the properties already gleaned, we are justified in saying that the lands, when mined, will show more than double that amount of iron ore, or an average of considerably more than 2,000,000 tons per forty.

Without in any way desiring to criticise the administration of other states it may be of interest to note the experience of neighboring states in the administration of school lands. Michigan, Iowa and Wisconsin were all admitted to the Union before Minnesota, so that those who had to do with establishing the policy of this state had the benefit of the experience of other states. Those states received large land grants from Congress containing minerals, timber and farming lands, approximately as Minnesota. It appears that they sold the land outright for a small sum per acre, retaining neither the timber nor the mineral. From the official report of Michigan made on June 30, 1908, that state had a permanent or primary school fund of a little over four millions of dollars, a university and agricultural college fund of a little more than a million and a half dollars with substantially all of the land which it secured from Congress, sold. On June 30, 1906, Wisconsin had a school fund of nearly four million dollars, and only 22,964 acres of land remaining unsold. Under the Wisconsin law all escheated estates and all fines collected under penal laws, and five per cent of the United States land collections were added to the school fund. Wisconsin has a permanent agricultural and university fund of only $535,920.11 and 364 acres unsold. On July 1, 1908, Iowa had a permanent school fund of $4,778,019.46. In Iowa the sales of school land were conducted by the county officers and the funds derived from the sale of the lands in the several counties were kept in the county treasury and are loaned on first mortgage real estate securities. From the report of the Iowa state auditor it would appear that this method of handling the permanent funds has not been successful. The school fund of Iowa, in addition to receiving the proceeds of the sales of section sixteen in each township and 500,000 acres of land granted by Congress, also received all escheated sales of United States Government lands.

It will be seen from these figures that Minnesota is now receiving the benefits of the far-sightedness of Governor Ramsay and his group of early law-makers in this important respect. First, in 1861, at a time when government lands were on the market at $1.25 per acre a minimum of $5 per acre was first placed upon our school lands sold for farming purposes. Second, the pine timber