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COMMENT 2
ALLOCATION OF CASlI BALANCES
CASH BALANCES IN STATE TREASURY
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At
July 1,
1947
$ 14,983,929
48,833,746
49,895,366
At
January 1,
1948
$ 11,742,416
42,661,822
47,977,841
At
March 31,
1948
$ 51,161,288
48,701,129
48,018,696
Any apparent surplus beyond needs to meet appropria
tions may be invested.
No legal authority to invest
No legal authority to invest
1. General Fund ,
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1 nighway Fund
tions may be invested. X
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3. 1947 Permanent Improvement Fiutd for new buildings
and construction at State Hospitals, Educational and Cor
rection Institutions and Medical Care Building Program
4. Aggregate Balances of More than 80 Special Operating
Funds
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5. Federal Funds for Special Purposes
6. Funds for Payment upon Their Presentation of Matured
State Bonds and Interest Coupons
7. Outstanding Checks of State Departments, Institutions
and Public Schools
Total Cash Balances .. -
4,830,240
2,088,848
5,687,237
8,506,410
$134,825,776
6,517,186
3,589,057
5,703,711
7,168,077
$125,360,110
5,285,026
4,278,296
2,950,997
10,979,684
$171,375,076
No legal authority to invest. Besides individual fund bal
ances are too small and fluctuate to such an extent that in
vestments would be impracticable even if there were
legal authority to invest. .
Federal funds cannot be invested
Subect to being paid out at any time
Subect to being paid out at any time
This Is the amount Mr. Scott says Is on deposit in banks
without interest and should be invested
Invested and earning Interest under Authority of Law
at March 31, 1948
Sinking Funds, Post-war Reserve Fund, Retire
ment System Funds $135,779,659
General Fund Surplus Invested March 31, and
April 15, 1948 15,000,000
Total Funds now invested $150,779,659
$ 15,000,000 of this amount Invested between March 31 and April 15
by authority of the Cornell of State.
QUESTIONS
Why are funds of the State Treasury deposited in more than 250
Banks?
Are funds of the State Treasury adequately protected against pos
sible bank failures?
Why are banks not paying interest on State deposits?
Why is there no legal authority to invest certain funds, such as the
Highway Fund and 1947 Permanent Improvement Fund?
How is General Fund surplus invested?
Who are the members of the Council! State?
Since banks are prohibited by Federal Reserve System from pay
ing interest on State Deposits, why shouldn't the State Treas
urer invest the Highway and Permanent Improvement Funds
as Mr. Scott would have him do notwithstanding the absence
of legal authority?
Why didn't Mr. Scott raise the issue about interest on the deposits
or investment of the 134 million dollars balance at July, 1947
and the 125 million dollars balance, at January 1, 1948 when
he was a member of the Council of State and knew these
facts at the time?
What was the cause of increase of the General Fund Balance be
, tween January 1st and March 31st of over 40 million dollars
4 and why has only 15 million dollars of this balance been in
jfc. vested? -
Prepared from official aourou)
This Ad Sponsored By Local Supporters Of
ANSWERS
For the same reason that funds of the Federal Treasury and of
other states and local governments and Business Concerns
are deposited in banks. There is no other available or practi
cal and safe place to keep them.
Every bank in which state funds are deposited has furnished and
must always furnish ample security to guarantee the State
against loss.
All banksee mMrtber.s of the Federal Deposit Insurance Corpora
tion undgrJfte d&ection 0f the Federal Reserve System. In
August lOSTheFederal Reserve Board invoked a regulation
that banks shaft ntot pay interest on demand deposits of public
funds.
At the time these funds were appropriated by act of the 1947 Gen
eral Assembly it was assumed that they would have been
practically spent or encumbered by March 31, 1948. Therefore,
the Legislation did not authorize Investment
Only in U. S. Government obligations by the State Treasurer after
he has first obtained the approval of the Governor and Council
of State, when in their judgment there will remain a cash
balance sufficient to meet appropriations of the General Fund.
The Governor, State Treasurer, State Auditor, Secretary of State,
Insurance Commissioner, Commissioner of Agriculture and
State Superintendent of Public Instruction. The Attorney
General is legal adviser and attends all meetings of the Council
First, he would be subject to impeachment for exceeding his au
thority. Second, he is bonded in the sum of $750,000 in surety
companies for the faithful performance of his duties and
against his mishandling of State funds. The surety companies
would be privileged to, and most likely would cancel his bond.
He would thereby be disqualified to hold office.
If Candidate Scott's accusations against State Treasurer Charlie
Johnson were true, he himself was deliberately neglectful of
bis duties and responsibility to the people of North Carolina
while .he was Commissioner of Agriculture and a member of
the Council of State.
One of the State's greatest sousees of income for the General Fund
(income taxes) is collected between Marek 15th and 31st of
each year. The average total amount spent per month for. Gen
eral Fund appropriations is abdjit 8 million dollars and income
received during the spring aad stunner months is smallest;
always less than the amount paid out. , , ,; "
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