The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-10-17
WILL THEY DO IT?
School Fund Commissioners He's.
itate Over Bonds.
An Issue That Isn't SaIable Is
offered.

Another effort is being made to in
duce the school fund commissioners to
purchase the S133, 900 issue Of 4 y per
cent refunding bonds put out by Sala-
manca township, Cherokee county. Ihe
deal is being engineered by Kelly &
Kelly, the Topeka bond brokers.
At its meeting this morning, the
school fund commissioners had the
proposition under consideration.
Whether the commission has the right
to purchase the issue under the special
act of 1903 was checked UP to Attor-
ney General Coleman, and Mr.. Cole
man said, after being in consultation
with his advisers for some time:
''As far as I am concerned, 1 am sat
isfied that the school fund commission
ers can not buy this issue. In my opin-
ion, the special act of 1903 was re-
pealed by the general law passed at
the last session of the legislature
If Mr. Coleman's opinion is follow
ed by the board the Salamanca bonds
will not be purchased; at least not just
at this time.
The trouble with the Salamanca
bonds, which for years have been
haWked about in a vain effort to find
a purchaser, is that the issue of $133,-
600 represents about 2 8 per cent of the
assessed valuation OF the township. Inc
limit of bonded Indebtedness is Is per
cent Naturally the legitimate bond
buyers are afraid of such a proposition,
and it seems that the school fund has
been called upon to take the issue as a
last resort. Bonds issued under such
conditions are usually put on the mar
ket at a large discount from par. OF
course it is desired by the township
issuing the bonds to unload them at
their full face value.
The special act, which was passed
IN 1903 for the especial benefit of the
Salamanca bonds, was as follows:
The said school fund commission
9TfnnrfVa6 and If
in their judgment such investment is
found to be safe and desirab BILE, to pur-
chase refund1ng bonds of Salamanca
township, Cherokee county, Kansas
regardless of any restrictions or i'm
positions contained in any statute of
the state of Kansas heretofore en-
acted, when issued in accordance with
the provisions of the law regarding
the issuance of refunding bonds by
municipalities, and to be issued by
said township and city in the sum of
sl50,000, for the purpose of redeeming
S150,O of funding bonds of Salam-
anca township, Cherokee county, Kan
sas, falling due Jan. 1, 1915, and pay
able at option of township after jan
uary 1. 1895"
l. L. Dayhoff, state superintendent
and secretary of the board of school
fund commissioners, said this morn
ing:
THE board has the Salamanca mat
ter under consideration, but has taken
no action The question of whether
the bonds shall be purchased rests
now with the attorney general. It is a
purely legal proposition.
There is no doubt that the bonds
are perfectly good and as the school
fund commissioners now have enough
money on hand to take the entire is
sue of $133, 600, it seems that it would
be d good investment. We find it
very difficult to get bonds For a time
when the new law was first passed,
there was an abundance of bonds, but
offers are coming in very slow now.
We turned down many offers at first,
but 1t seems now that the banks have
cleaned uD almost everything to get
securities to file under this new de-
positOry law Good bonds are hard
to find.
The bond issue of Salamanca town
ship is for the purpose of refunding an
old issue which bears 6 per cent. The
new bonds viii bear 4A per cent.
don't know just what the original
bonds were issued Tor, but I under
stand that it was for railroad aid. At
present the township is paying per
cent. 1t is true that the S1S3, 600 issue
IS about 25 per cent of the assessed
valuation, but I believe that the as
sessed valuation is too low In Sala-
manca township is located the city cf
Columbus, and it is a very fine cOun-
try thereabou The special act of
AyO3 was to enable the school fund
commissioners to buy the issue regard
less of the provision limiting the bond
ed debt to Is Der cent.
Splitter & Co, the well known bond
buyers. are willing to take the bonds
but they want the township to make
provision for paying off the bonds in
installments at the end of each three
year term. The bonds themselves pro-
vide that they may be paid at any
time. and the township is, as d matter
OF fact, paying OFF a portion of its
bonds every year The bonds provide
that by publishing 90 day notice, the
interest on any portion of the bonds
can be stopped and the bonds paid.
and this IS what S2itzer & Co. do not
Ike,
When the legislature of 1905 passed
the new law regulating the manner OF
investment for the school funds. it in
corpoTated this provision:
Provided. that the commissioners
shaH not invest in any other bonds
which, together With the other out
/ standing bonded Indebtedness. shall
/ exceed Is per cent of the assessed val
uatlon of said municipality as return
] ca ana liked by such municipality"
1t IS this provision of the law. which
IN the opinion of Attorney General
Coleman, repeals the special act pass
ed to enable the school fund commits
sloners to buy the Salamanca issue.
Weather Indications.
Chicago, Oct. 17--Forecast for
Kansas: Showers tonight and We'd
Hesdayi colder in southeast portion to-