The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1898-09-14
10 PER CENT TAX
Railroads and Bonded Kansas
Counties May Suffer.
State Auditor Morris Will En-
force an Old Law.
1T STOPS LITIGATION
To Recover Judgments on Re-
funding County Bonds,
But Brings Higher Taxes to
DilatOry Counties.

c. F. Hutchings. a Kansas City, Kan.
attorney. has 'surrected an old law
with reference to refunding bonds
which is liable to make a great deal
of trouble for Kansas counties which
owe refunding bonds and are refusing
to pay them.
The law was passed by the legislature
of 1879 and provides that any public
corporation may refund it's indebted
ness to take advantage of concessions
offered by its creditors, but that such
refunded bonds shall not require suit
to collect them or interest due on them.
When a payment is due, and the cOun-
ty, or other body, refuses to pay it, the
bOndhOlders simply apply to the audi
tor of state, and that officer issues an
order instructing the county treasurer
to place on the tax rolls a sufficient
levy to meet the payment due. If the
county treasurer fails to do so ms
bOndsmen are liable for the full amount
of the bonds defaulted, and he himself
commits a misdemeanor punishable by
Imprisonment for not less than three
nor more than twelve months.
Although this statute has been in eX-
istence for nearly 20 years, 1t has been
entirely overlooked by attorneys, and
suit after suit has been brought both
in state and federal courts to obtain
judgments on refunding bonds. Some
of these suits have even been carried
to the United States supreme court, and
many of them are now pending in the
state courts.
about 20 or rs years ago." said Mr..
HutchingS today, "a wave of repudia-
ton swept over Kansas on account of
the inability of many counties to meet
Indebtedness. In some counties COM
nissiOnerS were placed in Jail because
they refused to pay their bonds. re-
member at one time the county COM
miSSiOnerS Of LeaVenWOrth county were
in jail>on this charge, and in one county
in southeastern Kansas six county Of
ficerS were locked up.
THE counties wanted to compromise
their Indebtedness but their creditors
refused because, they said, they would
have to go through the same operation
in a few years and either bring suit
against the counties or compromise
again.
ITO meet this condition the legisla-
ture enacted chapter so of the session
laws of 1879 providing that when the
creditors of a county made concessions
and threw off part of their claims, re-
funding bonds might be issued, but no
judgment was to be necessary for the
collection of such bonds. The state aud
itOr is compelled to order the county
treasurer to make a tax levy, and the
treasurer must comply.
''KiOWa county refunded about 100000
of its Indebtedness in 1889 for S79, OOO-
The Indebtedness consisted of warrants,
bonds and other obligations. The re-
funding bonds were purchased by Geo.
r. Howard, q capitalist of Buffalo, N.
Y, but the county afterwards claimed
that the bonds were illegal We brought
suit and fought the case clear through
the United States supreme court to
prove the validity of those bonds.
Now I discover that was all unneces-
sary.
Il have been to see Captain w. H.
Norris the state auditor, and he will
put the law into operation. I will serve
an order on the county treasurer of
Kiowa county, and after that proceed
in the same manner against Woodson
county, against which have a suit for
100000 refunding bonds now pending in
the United States circuit court at Fort
Scott Other counties against which
suits are pending are Meade, Lane,
Stevens and Kearny. In fact major
ity of the counties have issued refund
ing bonds.
cor course it will probably work a
hardship in some of those cOunEHes. 1t
may make the tax levy as high as Is
per cent in KiOwa county, but they have
not been paying taxes so far to meet
these bonds. The railroads are the
heaviest taxpayers out there and the
burden will fall principally on them, but !
the bonds were originally issued for
them and they got the benefit, so this !
eVens matters up"
If this law holds good as Mr.. Hutch
inss is confident it will, the bond suits |
against Seward and Pratt counties, now
brought by the state of Kansas, on be- |
half of the school fund in the court of
appeals at Garden City, will be thrown
out of court, and the county treaSurerS |
of those counties will be instructed to !
spread on their tax rolls a sufficient |
levy to meet all defaulted payments.