96 F. G. YOUNG 2. Having glanced at some of the more significant hap- penings to public funds as they were being passed on into the state treasury we are now ready to direct our attention to the accumulated surpluses and balances in possession of the state treasurers and to note conditions with regard to them affecting the weal or woe of the Oregon people. An economic management of this part of the commonwealth business would arrange to have always a small surplus in reser- voir, as it were, to which inflows were adding and from which outflows in payments were taking place and no leakage or diversion of funds occurring. It will be remembered that the inflows were turned into three quite distinct reservoirs : One containing the general fund from the state tax levies ; one the "trust funds," proceeds from the sales of certain lands ; and the third the "land funds" accumulated out of other grants and of national land-sale funds turned over to the state. The general fund was drawn upon for all purposes ; the trust funds, like the common school, the university and the agricultural college land funds, were to be irreducible, the principal being loaned and only the interest accruing used; the land funds were for application in works of internal improvement. What degree of economy has been exhibited in the admin- istration of Oregon's treasury accumulations? With regard to the general fund, normal conditions call for the maintenance of such an approximation to a balance between the revenues and disbursements, from year to year, that no large surplus of idle funds accumulates and that no deficit occurs involving embarrassment and the loss of the interest paid on warrants. Furthermore, the moneys representing the "balances on hand" should function normally as part of the general circulating medium or reserves, and earn interest for the people, through being entrusted with appropriate safeguards to banking de- positaries. The more serious lapses from normal conditions of the gen- eral fund administration of the Oregon state treasury are represented in the following:
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