State governments have come into conflict with the U.S. Treasury Department over billions of dollars worth of unclaimed government bonds that the states would like to eventually hand off to owners they can find, according to the Wall Street Journal. While the digital nature of today’s economy may make it difficult to lose track of a bond today, this is a relatively recent development; the majority of the bonds in question involve physical papers that people lost, misplaced or simply forgot about, many dating back to the Second World War.
States such as Kansas and New Jersey want the federal government to provide them with information about who bought these bonds, and to let them hold onto the funds while they search for the original owners. The federal government says that the states can’t do that because the bonds do not belong to the state governments, and it has expressed concern that allowing this to happen would hurt people’s demand for Treasury bonds because a state government could just take the proceeds for themselves (The Journal noted that if no one claims the bonds, the states could just add the money to their own coffers). At the same time, states have fired back that the federal government doesn’t own the money either, and it is duty bound to return it to the owners.
While a federal judge sided with the states on this matter, the government then appealed. Litigation is still ongoing.