subject to taxation for municipal purposes within the Borough an annual tax for the payment of the interest and State tax on said bonds and the principal at maturity and thereby makes the bonds obligations of the Borough.

This is followed by the covenants in the mortgage or deed of trust among which is the following:

The Borough hereby covenants and agrees:

SECTION 1. That it will duly and punctually pay the principal of and interest on every bond issued under this Indenture, on the dates and in the manner specified in such bonds and in any coupons thereto belonging, according to the true intent and meaning thereof. The coupons on bonds registered as to the principal shall be payable to the bearer of such coupons in the same manner as coupons on bonds not so registered. All matured bonds and coupons when paid shall be cancelled and forthwith deposited with the Trustee."

This is an expressed covenant or agreement by the Borough that it will pay the principal of and interest on every bond issued under the mortgage or deed of trust. It is hard to see how the bonds could be made more binding as obligations of the Borough.

The Legality of these Bonds for Investment Purposes by Your Board.

The Act of July 18, 1917, P. L. 1043 establishes a public School Employes' Retirement System and creates a Retirement Board for the administration thereof. Section 6 of the Act deals with the management of the funds of the system and is as follows:

"The members of the retirement board shall be the trustees of the several funds created by this act, and shall

have exclusive control and management of the said funds, and full power to invest the same; subject, however, to all the terms, conditions, limitations, and restrictions imposed by this act upon the making of investments; and subject, also, to the terms, conditions, limitations, and restrictions imposed by law upon savings banks in the making and disposing of their investments;

*

This limits the investment of the funds of the System "to the terms, conditions, limitations and restrictions imposed by law upon savings banks in making and disposing of their investments".

What investments savings banks may mak is definitely settled by law and by the Act of May 20, 1889, P. L. 246, in Section 17 it is provided as follows:

66 'SECTION 17. It shall be lawful for the trustees of any saving bank to invest money deposited therein only as follows:

First. In the stocks or bonds of interest bearing notes or
the obligations of the United States, or those for which the
faith of the United States is pledged to provide for the
payment of the interest and the principal.

Second. In the stocks or bonds of the Commonwealth of
Pennsylvania bearing interest.

Third. In the stocks or bonds of any State in the Union
that has not within ten years previous to making such
investments, by such corporation, defaulted in the payment
of any part of either principal or interest of any debt
authorized by any legislature of such State to be con-
tracted.

Fourth. In the stocks or bonds of any city, county, town or village of any state of the United States, issued pursuant to the authority of any law of the State, or in any interest bearing obligation issued by the city or county in which such bank shall be situated.

Fifth. In bonds and mortgages on unincumbered, improved real estate, situate in this State.

By the Act of April 5, 1917, P. L. 47, bonds issued by Federal Land Banks were added to the list of investments for savings banks, and by the Act of June 28, 1923, P. L. 884, amending the Act of 1917, bonds issued by Joint Stock Land Banks. The bonds now under consideration are bonds of the Borough of Ashland, issued pursuant to the authority of the law of the State and are legal investments for savings banks. Being legal investments for savings banks, they are, therefore, legal investments for your Board.

I, therefore, advise you, First, that the bonds in question, are a first lien on the entire water works system of Ashland Borough. Second that the bonds are an obligation of the Borough of Ashland, and Third, that they are legal investments for your Board.

Executive Department

APPOINTMENTS

Justices of the Peace-Mrs. Margaret H. Bowers, Bellevue ; S. A. Robeson, Snow Shoe.

State and Finance, Accountant-Ralph E. Haines, Harrisburg. Banking, Accountants-Frank H. Allen, Collingwood, N. J.; Walter Seiler, Harrisburg.

Agriculture, Market Analyist-H. A. Haneman, Delanco, N. J.; Rural Economist, F. P. Weaver, State College.

Labor and Industry, Mediator-Patrick A. Ramsey, WilkesBarre.

Forests and Waters, Assistant Engineer-W. G. Drury, Pitts

ton.