The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-08-29
SUIT is FILED.
(continued from Page one.)-

social intercourse, did, on the 20th DAY
of August, 1904 at the county of Shaw
nee, state of Kansas, falsely, wickedly
and maliciouSly compose and puDllsh,
and cause to be published in said the
Topeka State Journal certain false,
ScandalouS, malicious and defamatory
matter of and concerning this plaintiff
in the words and figures following:"
Following this petition is the article
about the Comanche county bond deal
published in the State Journal August
20 and which in a brief summary is as
follows:
That the circumstances indicated that
a conspiracy had been formed to load
up the state school fund with bonds of
questionable value.
That this alleged conspiracy was con-
summated, the week before the article
was published, IN the purchase OF So
900 of Comanche county bonds Wh1cn
were purchased at par and which would
have brought only STA cents or less on
the dollar in the open market.
That the deal was put through with
the utmost secrecy. Every effort was
made to hide it from becoming known
outside the circles of those interested
Pressure was brought to bear to COM
pei State Auditor Wells to register the
bonds and then to keep it secret and 10
refuse a representative of the State
Journal permission to see the records
of his office. Mr.. Dayhom refused to
allow the State Journal to see his bond
record.
The manner in which the deal was
carried through indicates that the per-
petrators of it realized that it could
not be justified. Those who bought the
bonds:
]. r. Burrow, secretary of state.
I. L. Dayhoff. superintendent of pub
lie instruction.
c. c. Coleman, attorney general.
1t was concerning this deal that the
State Journal representative asked to
see the records in the office of Superin-
tendent Dayhoff on Thursday, August
IS, and Superintendent DayhOn hatly
refused to allow him to see them
BY the manipulation of this deal the
state school fund will be cheated out of
$50, $40 in interest during the next 10
years, and Mr.. GODDARD, the bond bro
kerr will receive, or 1t will be issued to
him at least, $4,000 as a commission
besides whatever profit there may have
been on the bonds themselves. Besides
this the state school fund is loaded with
1923, 900 worth of bonds of doubtful val
ue.
In order to carry the deal through
it was necessary for the state board
of equalization, of which Kelly and
Burrow are two of the members to
raise the assessed valuation OF Com
anche county from 1882, 553, the Valu-
alton as returned by the county clerk,
to $1,o41,771. The law says that the
total Indebtedness of a county shall
not exceed Is per cent of assessed val
uation of the county. Prior to the last
the limit was 10 per cent,
but the last legislature raised to 8
per cent. The bonded indebtedness
of Comanche county is $156, 600, so
that it was necessary that the records
should show the assessed valuation to
be at least S1,040,000. The assess
mentS made by the township assessors
did not make this showing, so the
state board of equalization arbitrarily
raised the assessed valuation on the
state auditors books to make up the
deficit This was by far the greatest
raise made in the state. |
1t has always been the rule in the |
state auditors Office to consider the
returns made by the county clerks as |
the basis of valuation on which bonds |
may be purchased, as the equalization |
made by the state board has refer |
ence only to state taxes, in order to
aQualize the state taxes among the |
counties. 1t was therefore necessary |
for Attorney General Coleman to
make a new rule, that the basis of
valuation on which bonds may be 1
bought shall be the valuation fixed by |
the board of equalization This he did
and the combined influence of Cole
man, Burrow. Kelly and GODDARD was
brought to bear on State Auditor
Wells to compel him to register the
ponds under that ruling
All of this, in addition to the actual
purchase and registration of the
bonds, was done with the utmost
secrecy.
The original bonds with which the
was begun were held in the
east. A year or two ago the owners
the firm of Kelly &
Kelly, composed of H. B. Kelly and his
ION, we'll known Topeka bond brokers,
% sell them. Mr.. Kelly says they Of
'ered them all over the country, and
he very best offer they could get on
he bonds was 90 cents on the dollar.
They were six per cent. bonds, run
ling until 1920. They were issued on
- al
ponds, the legality of which was dis
,uted by the county and which were
n litigation for a long time.
Several months ago, according to H
that he might be valuable
n assisting in the sale of any bonds
lie might have to sell to the state
chooI fund. Some time last spring
'Ir. Kelly thought he would have Mr..
iodard offer these Comanche county
,onds to the state.
Two or three weeks later, Mr.. H.
?. Kelly says, State Treasurer T. T.
he state house and asked him if he
lad some Comanche county bonds for
ale. Mr.. H. B. Kelly replied that he
lad. Treasurer Kelly said he thought
they were placed in the hands of
ir. GODDARD the latter could sell them
o the school fund commission. Treas
lrer Kelly added that Mr.. GODDARD {
vas looking for the owner of the !
lOnQS ana naO Deen 10 the state
reasury for help in locating them. I
This made H. B. Kelly suspicious
hat there was a scheme on to freeze
linn out of the sale OF the bonds. and
lie concluded to try TO sell the bonds 1
himself. He asserts that he sent s
written offers to each of the three I
members of the school fund commits
ion. Offering the bonds to the state so '
s to net the state 6 per cent. interest ]
Until they fall due in 1920. He says {
he same offer was also made to At z
orney General Coleman in person. I
There is therefore no doubt that {
ach member of the commission I
new those bonds cou1G be purchased 6
o bring the state school fund per (
ent. interest, which, if they had been '
God bonds and could have been DUR t