The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-08-20


days, and at length he called him UP
| by telephone and asked him about it,
Mr.. GODDARD replied that he did not be-
lieve he could sell the bonds, but to
let the matter rest for a while in his
hands.
Two or three weeks later, Mr.. H.
B. Kelly says, State Treasurer T. T.
Kelly telephoned for him to come to
had some Comanche county bonds for
sale. Mr.. H. B. Kelly replied that he
had Treasurer Kelly said he thought
if they were placed in the hands of
Mr. GODDARD the latter could sell them
to the school fund commission Treas
urer Kelly added that Mr.. GODDARD
bonds and had been to the state
treasury for help in locating them.
This made H. B. Kelly suspicious
that there was scheme on to freeze
he concluded to try to sell the bonds
himself. He asserts that he sent
| written offers to each of the three
members of the school fund commits
sion, offering the bonds to the state so
| as to net the state per cent. interest
until they fall due in 1920 He says
| the same offer was also made to At
| torney General Coleman in person.
There is therefore no doubt that
| each member of the commission
knew those bonds could be purchased
| to bring the state school fund per
| cent. interest, which, If they had been
good bonds and could have been pur-
chased within the law, would have
been an exceedingly profitable invest
ment for the state.
But there was no rakeoff in that kind
of a deal and Mr.. H. B. Kelly says
he heard nothing from his offer.
Securing the Rakeoff.
But the owners of the bonds were To-
Gated without any aid from H. b.
Kelly The State Journal does not
know how this was done. 1t could be
accomplished through the states fiscal
agency in New York by the officials
who have dealings with the fiscal agen-
cy. Having once located the bonds and
made sure that he could get them, Mr..
Godard went to Comanche county and
offered to refund the bonds at a lower
rate of interest After some dickering
with the county commissioners, he ar
ranged to refund the bonds at AZ per
cent interest. for which the county
agreed to pay him a commission of $S,-
600. That $4,000 would represent the
profit in the deal provided Mr.. GODDARD
had paid par for the bonds, as he also
sold them at par. The State Journal
paid for the per cent bonds. but it is
known that they were a drug on the
market at far below par.
The State Loses $50. 2.52O.
It is very apparent that the state
school fund commission went into a
deal to reduce the interest on these
bonds from per cent to 41z per cent
for the purpose of enabling Mr.. GODDARD
-ostensibly-to make $S,00O 1t cost
the state school fund $50. $40 in interest
In other words. the school fund COM
mission deprived the state school fund
of that amount in order to give Mr..
GODDARD $4,000. If the bonds were gflt-
edged and there had been nothing
crooked or Irregular in their actual pur-
chase, this in itself would have been a
crime against the school chfIeren of the
state
The commission might have pur-
chased the six per cent bonds from H.
B. Kelly, which would have netted the
state six per cent on $123,00O for sixteen
years. This would have amounted TO
S120.OS0 interest in that time But they
actually did buy them from A A. God
ard, after he had refunded them at
41A per cent. This will give the state
SS7, $50 interest in the sixteen years.
or a loss of s32,520. The new bonds are
issued for thirty years, so that the
states money will be tied up for four
teen years. longer than the sixteen
from now money may be worth only
Az per cent and it may be worth more.
1t is not likely to be worth less.
How the Deal Progressed.
The new bonds were issued under
date of July 1, 1904. About the time
they were issued the State Journal first
got information that the deal was "on."
A State Journal representative went to
time, and requested that if any Co
manche county bonds came in for reg
istration. or were presented for regis |
tration in the school fund, the infor- |
Mr. Cole said no such bonds had been |
registered there and he mad never |
heard of them. He said if such bonds |
came in he would inform the State |
Journal reporter.
Later another inquiry was made and |
Mr.. Cole then stated that some of the |
other state officials had been making |
considerable trouble because of infer |
nIrf
records of the auditors office, ana as |
he was only a clerk and not in authori- |
ty he asked to be relieved of his agree
should any Comanche coun- |
tors office.
The State Journal representative |
then went to Assistant Auditor Nation. |
as Auditor Wells himself was out of |
town. To Mr. Nation was explained |
the proposed deal He said that no
bonds were checked up to him for
registration. He said he would not
Register them except on written
opinion from Attorney General Cole
chased on the valuation fixed <by the
state board of equalization.
Later Mr. Nation asserted that the
bonds would never be checked up to
the auditors Office Mr.. Nation said
this very confidently. 1t is supposed /
that he had been sounded" on the
proposition of registering the bonds
and had given the conspirators to
that it would do no good
to present them
Laid Down. on Wells.
But Mr.. Nation went off on a vaca-
ton about two weeks ago and Auditor
Wells himself was in Topeka. This was
the chance those interested in the bond I
deal were waiting for. A large amount
of money was tied up in the bonds and
they evidently had to get it out. 1t is
believed that Auditor Wells asked them
to wait at least till after election before
carrying through the deal. but a hun
dred thousand dollars or thereabouts is
a big amount of money to have tied up