78 The Financial History of Connecticut. 



The history of this fund is connected entirely with town finances 

 and for that reason is not within the scope of this chapter. The 

 subject is of too great importance and interest, however, to be dis- 

 missed summarily and a brief digression, showing that the condi- 

 tions of the act distributing this fund were not regarded, will not 

 be wholly out of place 



Until 1847 this fund fulfilled its purpose and the principal in- 

 creased a little, but the act of 1846 was the beginning of a relaxa- 

 tion in the restrictions put upon the investment of the fund and finally 

 an act passed in 1872 permitted the investment of the fund in any 

 loan or in any bank stock of the state, in the bonds of the United 

 States or of the state, or in the bonds of any city, town, or borough 

 in the state.^ The result of these acts was that whenever the towns 

 were hard pressed for funds, they borrowed from the town deposit 

 fund. According to the report of the secretary of education for the 

 year 1887 about five-sevenths of the fund was invested in this way. 

 He also said that if the towns made any pretense of paying interest 

 on this loan it generally consisted of book-keeping jugghng. For 

 example, from the tax receipts there might be turned over to the 

 treasurer of the fund six per cent interest on the loan. He would 

 enter this on his books as receipt of interest and turn it back to the 

 town treasurer to be used for the support of schools. ^ This policy 

 brought no additional money to the schools and the only effect 

 of these cases was to diminish the town's indebtedness and lower 

 its tax rate. Hence it is that although the town records gave the 

 yield of the town deposit fund for 1908 as over twenty-seven thou- 

 sand dollars the secretary of the board of education estimated 

 that the actual income was at the most seven thousand dollars.^ 

 A thorough investigation of the town deposit fund would be a very 

 interesting study. 



8. School Fund. 



From a financial point of view, the period from 1820—1846 was 



very advantageous to the school fund. The capital of the fund 



on September 2, 1820, was $1,858,074 This had 



Principal increased to $2,070,055 by September 2, 1845. In 

 and Income ... ' . 



the next two years, the principal increased a little over 



1 Public Acts, 1872, chap. 28. 



2 Report of Secretary of Education, Jan. 1888, p. 146. (Leg. Doc. 1888, 

 vol. i.) 



3 Report of Secretary of Education, 1908, p. 88. (Pub. Doc. 1908, vol. iv, 

 part i.) 



