The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1904-06-29
Dodge City Bond Deal Grows
Worse az Investigated.
They Were offered for S75
About Year Ago.
FINALLY SOLD THEM.
Are Now Held by a Bank in
Wichita.
Surprise Expressed That Mr..
Coleman Sanctioned Deal.

A good many interesting facts are
coming to light today concerning those
Dodge City bonds which the state
school fund commission attempted to
purchase Tuesday. and which would
have gone through without hitch had
it not been for the vigilance OF the
state auditors Office.
The fact is that this very bond issue
has been offered to Kansas investors
for 75 cents on the dollar within the
last IS months, yet the school fund
commission voted to buy them at par.
The bonds were issued in the first place
to compromise some old Indebtedness.
The original holders Of the bonds did
business through the Citizens Savings
& Trust company Of Cleveland, Ohio.
Several years ago this company got
hold of Dodge City bonds aggreEating
SIS, ,OO0, due in 1907. There were street
improved bonds amounting TO $1,000;
funding bonds amounting to $4,000. and
s25. 900 Of city hall bonds. Just what
the Cleveland concern paid for these
bonds originally is not known.
The interest on these bonds was de-
faulted for a number of years and at
length the Cleveland company brought
suit in the United States circuit court
on them and secured a judgment OF
$40, ,473.72 on the defaulted interest
Back in 1902 the aggregate OF the
bonds, judgment and accrued interest
was $50, ,261.64 In order to get IT into
better shape a compromise was made
and all this Indebtedness was refunded
for S47, 900 Of 4 per cent bonds to run 80
years. $4,000 in cash, and city warrant
rhe $4,000 bonds were then
placed on the market for sale Some
thing over a year ago the Cleveland
concern wrote to a Kansas investor
that he could have $4,000 of these
bonds at rs if he wanted them, and
probably the remaining $4,000 as
soon as some arrangements could be
made. The proposition was turned
down, and it is believed the same
offer was made to other parties. Some
Wichita parties finally took them but
whether at rs or less is not known
They are now said TO be held by the
Fourth National bank of wichita
The interest has been paid thus far.
and the only thing the matter with
the bonds is that the Indebtedness Of
the town is so excessive unat investors
have not seemed TO think they are
very desirable
Some surprise has been expressed
that Attorney General Coleman should
have sanctioned the purchase Of the
bonds. As a matter of fact. Mr. Cole
man sanctioned it with the under
standing that he should be given time
to cOrrobOrate the showing that was
made to him, and should find it cor
rect Immediately thereafter, how
ever, he and Secretary Of State Bur
row went to attend charter board
meeting, and without waiting for fur
ther investigation the warrant for the
payment of the bonds was issued in
the superintendent Office. and the
bonds were taken to the state audit
or's Office for registrat ton Had they
gone through the auditors Office the
warrant would have been counter
signed and paid and the state school
found would have been holding the
bonds.
The showing made to Attorney Cen
eral Coleman by D. E Dunn, the
Wichita broker who negotiated the
deal, was that Dodge city owes only
SIS, 900 in addition to this $4,000 bond
issue, a total of $55.00O- This was
certified to by the city clerk of Dodge
City The records In the state audit
or's Office, certified by the county clerk
of Ford county. showed $4,000 or
bonded Indebtedness in addition 10
this 1000 issue. and a floating In
debtedness OF 100000 besides
The certificate Of the city clerk
also showed the present assessed val
the auditors Office, which has not yet
received this years valuation, showed
that the valution is S309,025-
If the valuation is what the city
clerks certificate shows. and il the
total Indebtedness is only $4,000, 1t
would come within the is per cent
limit prescribed by law. and IL was
on this showing that Mr. Coleman
L
should find the showing correct of
course he did not know that the bonds
had ever been offered for sale at rs
cents on the dollar. nor did he know
anything about the 100000 floating
Indebtedness which the county clerks
record shows The valuation given
by the city clerk would allow an in
debtedness of S56s43O-3O as the final
limit within which the school fund
commission could purchase Dodge
City bonds, and this limit was put up
by the last legislature.
The means employed to bring up
the valuation of the taxable property
within the city is another interesting
matter. From 100000 to S376,OO0 is
a considerable increase for Dodge City
in a single year, but it seems that the
city limits have been extended within
the past year Among other property.
it is said, considerable railroad prop
erty has been taken into the city
Whether the holders Of the bonds had
anything to do with this action is not
known