CHAPTER VIII ALABAMA I. SIXTEENTH SECTION FUND-2. VALUELESS SIXTEENTH SECTION FUND 3. SCHOOL INDEMNITY LAND FUND 4. SURPLUS REVENUE FUND The three titles, "Educational Fund," "School Fund," and "Public School Fund" are employed in the school laws and school reports of Alabama to include school revenues derived from taxation and permanent funds.1 Alabama reports four permanent common school funds with principal and income as follows for the year 1905.3 Titles. It has seemed better to give the total fund excluding and then including the Surplus Revenue Fund in view of the fact that this fund, as explained in Part I of the present work, is, technically speaking, not a state permanent fund, but rather a loan from the United States made to the states in 1837. The total principal of * Computed. 1 Report State Supt. of Education, 1897-98, pp. 58-59; Ibid., 1886, p. 7; Turner, J. O., Public School Laws of the State of Ala., 1895, pp. 6-7. 3 Data furnished, Jan. 8, 1907, by I. W. Hill, Ala. State Supt. of Education. permanent funds reported in 1903 was $2,135,313, yielding an income of $155,8825 (1904), approximately equal to twelve and forty-five hundredths per cent of the common school revenue derived from all sources and to approximately nine and eighttenths per cent of $1,588,561,6 the total common school revenue in 1905. These figures represent nominal rather than actual values. The true condition of these funds cannot be positively stated, as questions sent to state officials have been either ignored or else returned unanswered, but it seems safe to say that in reality scarcely any permanent fund exists, except a small amount of sixteenth section school lands which yield but a slight and doubtful revenue. In 1882 the State Superintendent of Education wrote, "It is erroneously supposed by many that the interest accruing on the Sixteenth Sections, valueless Sixteenth Sections and the United States Surplus Revenue funds (are) the result of a prudent investment of the capital of these funds, . . . in reality they have no existence except upon the books of the State. .. The State became the trustee and her debt long since absorbed them." " Elsewhere we are told that the capital of the school land fund may be theoretically placed in 1875 at $2,449,000." The $669,086 surplus revenue was lost in the failure of the state bank in which it was deposited and "in 1848 it was considered doubtful whether the university and school funds and the surplus revenue would ever be realized as the bank had failed." The state recognizes the interest due on the surplus revenue at four per cent; also that due on the proceeds of public land sales at six per cent. The Vermont Special Commission on Permanent Common School Funds states (see report of the same, p. 5), "that the six per cent interest on Sixteenth Section Lands and other land funds amounts to $160,000 annually." Alabama originally was a part of the Mississippi Territory. June 16, 1802, the legislature of Georgia ratified articles of agree * Computed. 5 Ibid., LXXIV. Ibid., LXXV; Ibid., 1906, I, p. 306. 7 Ibid., 1896-97, Chap. XII, p. 650. ment entered into April 24, 1802, by the Commissioners of Georgia and the United States by which Georgia ceded to the United States all right, title, and claim to her territory west Origin of the Chattahoochee river.8 March 3, 1803, Congress in an act regulating the disposal of the lands acquired from Georgia west of the Chattahoochee river, constituting the Mississippi Territory, reserved from sale section sixteen in each township for school purposes, and thirty-six sections, or one township, for the use of Jefferson College. Alabama was admitted to the Union in 1819. Article VI of the first constitution of Alabama adopted December 14, 1819, provided that "the General Assembly shall take measures to preserve from unnecessary waste or damage such lands as are or hereafter may be granted by the United States for the use of schools within each township in this state, and apply the funds, which may be raised from such lands, in strict conformity to the object of such grant." 10a Provision for the establishment of a permanent common school fund was not made until over eight years later. By an act approved January 15, 1828, Alabama set aside 901,725 acres of sixteenth section lands granted by Congress, March 3, 1803.10 This was the first definite provision made. Provision was made for the sale of these lands, the proceeds to be paid into the state treasury, the state becoming trustee and liable to pay to the districts and townships interest on the principal at the rate of six per cent.2 9 On December 16, 1836, Alabama accepted $669,089 from the federal Government, the state's share of United States Surplus Revenue, distributed in accordance with an act passed by Congress, June 23, 1836. The money was deposited in various banks and the interest used for a time to form part of the annual appropriation for supporting schools. It would appear that prior to 1854 the principal had been lost through bank failures or had been used for 2 Laws, 1828, Chap. 26; Aikin's Ala. Digest, 1836, p. 379, Sec. 38. 8 W. G. Clark, History of Education in Ala., U. S. Bureau Education, Circular of Information, 1889, No. 3, p. 218; Land Laws, Vol. I, pp. 588–591. 9 State Grants of Public Lands, Mar. 12, 1896, p. 4, Tables General Land Office. 10 Report U. S. Commissioner of Education, 1892-93, II, p. 1283. 10a Ibid., p. 1321. state expenses. In 1854, however, it was declared to be a part of the educational fund and since that time the state has paid interest upon the total amount originally received. The interest is all derived from moneys raised by taxation and cannot be regarded as in any way income from surplus revenue deposit.106 Prior to 1854 the income from the interest on the proceeds of the sales of the sixteenth section lands was paid to the respective townships in which these lands lay. In 1854 an act was passed (approved by the Governor, Feb. 15, 1854), which provided for an "educational fund" to consist of (1) interest on the surplus revenue loan of 1836; (2) eight per cent on the proceeds of the sales of public lands granted in lieu of certain valueless school lands in 1848; (3) six per cent on the proceeds of the sales of sixteenth section lands; (4) $100,000 paid by the state; (5) several minor appropriations.10c The educational fund in 1855 was composed as follows: 10 Interest on the Sixteenth Section Fund (value of lands sold and pro ceeds paid into the state treasury, $1,244,793.36) Interest on valueless Sixteenth Section Fund Interest on United States Deposit Fund Direct appropriation from treasury Special taxes Escheated property $ 74,687.60 7,767.30 53,526.94 100,000.00 1,300.00 Loss 11 233.55 $237,515.39 At the end of the year 1869 the state had diverted $187,872.11 At the end of the year 1873 11 the state had diverted $1,260,511. In 1873 the total state apportionment for educational purposes was $522,810. The total amount actually paid out of the state treasury, i. e., the amount not diverted, was $68,313.11 Every dollar of the educational fund, except the annual receipts from the sale of school lands, is now directly derived from the revenue of the state. Both the Sixteenth Section 100 Bourne, E. G., History of the Surplus Revenue of 1837, pp. 44-47. See also Part I, Chap. III. 10c Report State Supt. of Education, 1899-1900, I, p. 488. 10d W. G. Clark, History of Education in Ala. (Cf. foot-note 8), p. 240. 11 Report U. S. Commissioner of Education, 1874, p. 5. |