The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1901-05-11
COLE is SUED.
Action Commenced to Force Him
to Register Bonds.

Action was begun in the supreme court
this morning to compel Auditor Of State
George E. Cole to register an issue of
$1,000 refunding bonds put out by
Chase county. This Chase county bond
issue was made under new law, passed
by the recent legislature, permitting
counties to refund their outstanding in
debtedness by issuing new bonds
Chase county had out $4,000 in bonds
bearing per cent interest and due in
1922, given for the Chicago. Kansas &
Western Railroad company.
The new 100000 issue bears 4 per cent
interest and runs twenty-five years, but
after May 1, 1905, at the option of the
county, they are payable in part.
The addition Of $4,000 is for unearned
coupons. It is on this addition, which
pays interest in advance, that Auditor
Cole bases his refusal to register and
wants a test of the law of 1901.
1t is claimed that while this appar-
emily increases the burden of taxation
upon the people, it really decreases it
by the lower rate of interest The plain
tiffs are H. B. Kelly and w. G. Kelly,
bond brokers.
In the petition asking for the man
darnus it was recited that the bonds had
been offered to Auditor Cole this morn
ing and he had refused to register them
The fact is that the bonds were not
offered to Cole. They were sent to the
state treasurer's Office. As it Is an am
icable suit that has been started this
little inaccuracy is not expected to cut
any figure. Mr.. Cole will withhold his
approval. He does so because the new
law has no checks upon it to prevent
terms upon which refunding bonds are
issued may be stated in the bill to be
whatever may be agreed upon" This
is very loose.
IN the Chase county instance the Op-
GRAFTON of the refunding would work
something this way: To pay principal
and interest from now until maturity
on the $50 600 would take $1S3, 200. To
mir int
$100, 900 issue, provided all bonds ran to
maturity and none were retired, would
cost 100000 In that event Chase coun-
ty would be paying $16,oUO more Tor the
privilege of issuing the new bonds
1t is stated that Chass county mas
$4,000 in its sinking fund to be applied
to retiring bonds after the stated date
The auditor has no official assurance
that such retirements would be carried
out
Auditor Cole says: "A1l I can see in
it is that Chase county makes itself La
BILE to pay $16,800 more this way. They
may intend to reduce the principal and
gain advantage through the lower rate
of interest but there is nothing to bind
them. Future officials would not be
bound by anything in the law to make
these retirements There are no checks
or safeguards in the law to prevent it
from being vicious. and dangerous as
you look al the face of it.
Besides, it seems to me that this is
an instance of increasing bonded in
debtedneSs. And this new law, IN my
estimation, does not repeal the old law
requiring that when a new debt is Great
ed or an old one is increased the propo-
sition must be submitted to a vote of
the people"
It would be possible under the new
law, since it lacks anything to check
such action. to issue and reissue bonds
one after another, still another state
official finds. A single bond of a GER
tain issue of $1,000, with interest cou-
pons attached, is worth $500 at per
cent. In the law there is nothing to
prevent the county, township or city
officials retiring that bond Immediately
for 81, 800 and issuing others. and so on
to immense sums.