The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-08-20
BLACK AND UGLY.
State School Fund Commission
ers Force Questionable Deal.
Bonds Purchased by Which
State Lost $4,000.
KEPT IN THE DARK.
Records Locked Up and Great
est Secrecy Observed.
Evidence of a Conspiracy by
State Officers.
VALUATION is RAISED.
COmanche County Brought to
Standard by State Assessors.
Coleman Then Rules That This
l. Basis to Be Taken.
Auditor Wells Forced to Regis
ter Bonds at Dead of Night.

LoE DOuuS At Dedu Oh NISuls
Appearances indicate that conspir-
acy has been formed by which the
school fund has been looted, and the
facts point towards certain state Off
cials as among the cOnspirators.
This alleged conspiracy was consum-
mated last week in the purchase of
S123,O00 ofComanche county bonds which
were purchased at par, but which would
have brought only 6715 cents on the
dollar on the open market.
The deal was put through with the
utmost secrecy. Every effort was made
TO hide it from becoming known out
SIDE of the circles of those interested
and those who had to be informed of
ii because of their official positions
Strong pressure was brought to bear
on State Auditor Wells to compel him
to register the bonds, and then to keep
1t a secret and refuse permission to the
State Journal to see the records of his
Office The very manner in which the
deal was carried through indicates that
the perpetrators of it realized that it
could not be justified.
Those who put the deal through were:
J. r. Burrow. secretary of state.
/. l. Dayton, superintendent of pub
lie instruction.
c c. Coleman, attorney general
T. T Kelly. state treasurer.
A A. GODDARD. eX-attorney general
Mr. Godard's services were utilized as
the broker in the deal. 1t was neces-
sary to have some outside party to car
~ it through, and it was done in his
name He was the supposed owner of
the bonds, and the records doubtless
show that they were purchased from
him 1t was concerning this deal that
the State Journal wished to see the rec
n of f1 int n
ent Dayhoff, which Mr.. Dayhoff fatty
refused Thursday.
BY the manipulation of this deal the
state school fund will be cheated out of
$32.520 in interest during the next l6
years, and Mr.. GODDARD will receive, or it
will be issued to him at least, $1,000 as
q commission; besides whatever pro
mt there may have been on the bonds
themselves. Besides this the state
school fund is loaded with $123,OOO
worth of bonds of doubtful value.
How the Deal Was Done.
In order to carry the deal through it
was necessary for the state board of
equalization, of which Kelly and Bur-
row are two of the members, to raise
the assessed valuation of Comanche
county from S632.55S, the valuation as
0z1.771- The law says that the total in
debtedness OF a county shall not exceed
Is Per cent of assessed valuation of the
county. Prior to the last legislature the
limit was 10 per cent, but the last leg
islature raised to Is per cent. The
bonded Indebtedness of Comanche
county is S156.000, so that it was nee
essary that the records should show
the assessed valuation to be at least
&1,040.0O0. The assessments made by the
township assessors did not make this
showing. so the state board of equali-
zation arbitrarily raised the assessed
valuation on the state auditors books
TO make up the deficit. This was by far
the greatest proportionate 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 reference
only to state taxes, in order to equalize
the state taxes among the counties. 1t
was therefore necessary for Attorney
General Coleman to make new rule,
that the basis of valuation on which
bonds may be bought shall be the valu-
alton fixed by the Board of Equaliza-
tion. This he did and the combined in
fiuence of Coleman, Burrow, Kelly and
GODDARD was brought to bear on State
Auditor Wells to compel him to regis
ter the bonds under that ruling.
All of this. in addition to the actual
purchase and registration of the bonds 1
was done with the utmost secrecy.
The Conspiracy Begins.
The original bonds with which the
conspiracy was begun were held in the
east. a year or two ago the owners
commissioned the firm of Kelly & Kelly. |
composed H B. Kelly and his son. |
well known Topeka bond brokers, to
sell them Mr.. Kelly says they offered |
them all over the country. and the very |
best offer they could get on the bonds |
was 30 cents on the dollar. They were |
six per cent bonds. running until 1920 |
They were issued on a compromise to |
refund some old bonds, the legality of |
which was disputed by the county and |
which were in litigation for a long
time.
Several months ago. according to H. |
3. Kelly. Mr.. GODDARD went to him and |
suggested that he might be valuable |
in assisting in the sale of any bonds |
he might have to sell to the state |
school fund. Some time last spring /
Mr.. Kelly thought he would have Mr.. |
GODDARD offer these Comanche county /
bonds to the state, and he accordingly /
wrote out a description of the bonds, |
showing how long they will run, what I
interest they bore, and all about them,
and mailed it to Mr. GODDARD to offer
to the state school fund commission,
composed of Secretary of State Bur-
row, Superintendent Dayhoff, and At !