state used the principal as it was paid into the treasury and now pays the annual interest out of state taxes.389 We have here then a permanent state debt for which the commonwealth must be taxed instead of a productive fund lessening taxation. The so-called Literary Fund of New Hampshire is not in any sense a permanent fund. The law defines it as follows: "All taxes collected by the state upon the deposits, stock, Literary Fund and attending accumulations of depositors and stockholders of saving banks, trust companies, loan and trust companies, loan and banking companies, building and loan associations, and other similar corporations, who do not reside in this state or whose residence is unknown, shall be known as the 'Literary Fund.’ The state treasurer shall assign and distribute in November of each year the Literary Fund among the towns and places in proportion to the number of scholars not less than five years of age, who shall by the last reports of the school boards returned to the State Superintendent of Public Instruction, appear to have attended the public schools in such towns and places not less than two weeks within that year.390 "In other words, the term Literary Fund is applied to an annual revenue resulting from the proceeds of “a non-resident savings bank tax." The proceeds of this tax in the year 1902 amounted to $33,774.02.391 U. S. 1837 Revenue Loan The United States apportioned to New Hampshire $669,086.79 in the distribution of the Surplus Revenue Loan of 1837. No state permanent fund was established with this money. On the contrary, the total sum received "except that inuring to communities not then. incorporated into towns" was divided among the several towns— with the privilege of devoting the whole or a part to the support of public schools. By an act passed December 18, 1842, the towns were empowered to make any disposition of it as should be deemed equitable and expedient. In Portsmouth, New Hampshire, the inhabitants voted to divide the revenue which fell to the town, per capita: the sum due to every man, woman, and child being between 300 Laws of N. H., 1901. 301 N. H. State Treasurer's Annual Report, p. 316. two and three dollars. An agent was appointed to receive and distribute the money; about 200 suits were almost immediately commenced against him as trustee of individuals owing small sums, and he was thus placed in rather an embarrassing position.392 As near as can be estimated, about fifty towns used their money, about $30,000, to establish permanent local school funds, yielding annually about $1,800. Nevertheless most of what might have become the basis of a great state permanent fund vanished. The Literary Fund was provided for by an act passed June 29, 1821, which required that all banking corporations should either Origin. Literary use paper stamped by some suitable stamp for Fund, 1821 bills, notes, or obligations put in circulation; the stamp to be paid for by the banks at the rate of $50 on the thousand of the circulation; or instead thereof to pay annually one-half of one per cent of their capital stock.393 The proceeds arising from the second provision, that of the tax of one-half of one per cent of the capital of the bank, eventually became the Literary Fund. The original purpose in establishing this fund was to aid an institution of higher learning, but by 1828 this purpose was given up and the fund which had accumulated up to that time and amounting then to $64,000 was distributed to the towns to be used for common schools. After that the fund was distributed annually.394 Origin Common In 1867, the governor was authorized to sell public lands, "wild lands," with the advice of the council, the proceeds to be placed in the state treasury, and "to constitute a part of the Literary Fund to be divided among the several cities and towns and by them applied to the maintenance of common schools or to other purposes of education." 395 A law passed the following year provided that the proceeds of the sale of the state lands affected under the authority of a joint resolution approved June 28, 1867, "shall be and the same 392 Bourne, Edward G., History of the Surplus Revenue of 1837, p. 83, and note. 393 N. H. Compiled Laws, 1815-24, p. 110. 394 N. H. Revised Statutes, 1842, Chap. 75, p. 154; N. H. School Report, 1872, p. 163; U. S. Bureau of Education, Circular of Information, 1898, No. 3, p. 15. 395 Laws of N. H., 1867, Chap. XLII, Sec. 1. hereby are set apart as a school fund. The annual income of the said fund shall be applied to the purposes of a common school education in such way and manner as the legislature may from time to time determine." 396 "The New Hampshire fund derived from the sale of public lands in the White Mountain region is known as the Institute Fund. The income, which is about, $2,300 a year is used for the purpose of maintaining teachers institutes." 397 "These wild lands were a part of the ungranted public domain which had come down as such from colonial times. From the sale of these lands $25,000 was realized. This money was paid into the state treasury; and it is provided by law that the same shall be reserved for the use of common schools, and that the state shall pay interest thereon at the rate of six per cent. The fund never seems to have been appropriated as a common school fund to any purpose, but was used by the state as other moneys, being counted, together with its accumulated interest, as a part of the state debt. In 1883, largely through the interest of Hon. J. W. Patterson, at that time the Superintendent of Public Instruction, the teachers' institute system was established; and the income from this fund, together with its accumulated interest, was set apart to pay for the institutes.399 The account when opened as an institute fund on June 1, 1884, amounted to $47,918.75. Since that time the institute system has been continuously in operation. The amount left unexpended each year has been added to the principal, so that at the close of the last fiscal year the amount was $59,529.17. The annual income is now nearly $2,400. In 1895, the General Court reduced the rate of interest from six per cent to four per cent, presumably for the purpose of bringing the state's annual obligation down to something like the current rate of interest." 398 396 Ibid., 1868, Chap. XXI, Secs. 1, 2. 397 Extract from letter dated Aug. 30, 1906, received from H. C. Morrison, State Supt. of Public Instruction. 398 Ibid., dated July 15, 1907. 399 Laws of N. H., 1883, Chap. 73; Rev. Stats., Chap. 94, Secs. 4-8. CHAPTER XXXVIII NEW JERSEY THE NEW JERSEY PERMANENT SCHOOL FUND Title-Condition 1902 and 1905 The official title of the New Jersey permanent common school fund is Permanent School Fund.400 The reports and laws also use the terms "State School Fund" and "School Fund." In 1902 this fund amounted to $3,839,692 401 and its annual revenue to $196,824 402 which was approximately two and eight-tenths per cent (.0277) of $7,118,248, the total common school revenue for that year. In 1906 the principal of the Permanent School Fund amounted to $4,523,916.92.403 It is impossible to state the acreage or value of the lands belonging to the fund as the law sets aside for it all lands that are or have been under water. The state apportions $200,000* a year as the fund's income, which is two and five-hundredths per cent of $9,773,562, the total receipts for common schools in 1905. 404 The Permanent School Fund was established February 12, 1817, by an act of legislature.406 The date 1816 sometimes given appears to be incorrect as no mention is made concerning any permanent school fund in the act of that year relating to schools.405, 406 The capital set aside by the Act of 1817 * Actual income not equal to this. Origin 400 New Jersey School Law, 1903, p. 63, Sec. 168. 401 Controller's Report, 1902, p. 90. 402 Controller's Report, 1902, pp. 92, 93, the difference between this amount and that stated in Report U. S. Commissioner is due perhaps to the fact that the latter includes the revenue of local funds and land rents, or else it may include the $180,000 loaned by the state to the school fund. The total of the school fund loan and balance, 1901, was $385,889. 403 Data furnished by C. J. Baxter, State Supt. of Public Instruction, Mar. 15, 1907. Superintendent Baxter failed to state income of Permanent School Fund. 404 Report U. S. Commissioner of Education, 1906, I, pp. 306, 307. 405 U. S. Bureau of Education, Circular of Information, 1899, No. 1, p. 29, gives 1816. 406 N. J. Laws of 1799-1820, p. 612. consisted of $15,000, derived “from the payment to the state of the principal and interest of the funded debt of the U. S. due this state, and from the dividends on the shares belonging to this state in the capital stock of the Trenton Banking Company," and which the previous year by the order of legislature had been invested in six per cent bonds.407 In addition to this realized principal several sources of increase were provided as follows: (1) “all dividends which may hereafter be received on the shares of this state in the capital stock of the Cumberland Bank, and (2) on the shares of the state in the Newark Turnpike Company, (3) all moneys to be received on the sale of the house and lot belonging to this state in the city of New Jersey,406 (4) and one-tenth part of all moneys hereafter to be raised by tax for the use of the state." 406 By an act passed February 14, 1818, additional stocks belonging to the state were added to the fund, making the total estimated value at this time $87,076.34 408 as follows: New Jersey received from the United States in 1837, $764,670.60 of the surplus revenue distributed as a loan among the states by the Congressional act, passed June 23, 1836. In 1837 the state divided the entire sum among the counties which were directed to loan their respective shares and pay the interest to the several townships. Probably the townships devoted much of this interest to schools from the first. The counties appear to have exhausted the principal in erecting buildings and paying debts, but they have 407 Ibid., p. 600. 408 Ibid., pp. 649-650, 652. |