The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-04
nFRENzIED FINANCE"

One of these is that Kelly has had
on deposit in the First National bank,
probably for months. certainly since
April J. more than half of the total
funds of the state, amounting to be-
tween five hundred and six hundred
thousand dollars.
In three other Topeka banks COM
bined he had about half of this
amount.
But in addition to this Mr.. Kelly
had on deposit in banks in Kansas
City, Kas., Wichita and Hutchinson
almost two hundred thousand dollars
more, a thing absolutely prohibited by
the laws of Kansas and for which
there is no possible excuse whatever.
So far as is known this has never
been done by any state treasurer be-
fore.
Mr.. Kelly seems to have been fol-
lowing his past custom of ignoring
the laws of the state and doing with
the state funds just as he desired, re-
gardless of the laws regulating such
matters and as If the money were his
own.
The statutes absolutely prohibit the
depositing of state funds in any bank
whatever, but this law has been
evaded in the past on the pretense
that drafts were placed with the
banks for collection. Here is the
statute:
'EMBEzZLEMENT: If any state treas
urer shall convert to his own use or the
use of any other person or persons, body,
corporate, association or party whatso-
ever. in any way whatever, or shall use,
by way of investment in any kind of Sc
curitY, stock, loan, property, land or mer-
chandise, or in any other manner or form
whatever; or snail loan, with or Wlthout
interest, to any company, corporation, as
ISOLATION, or individual, any portion of the
public money; or shall deposit with any
company, corporation or individual, any
portion of the public money, or any other
fund, property, bonds, securities, assets
or effects of any kind received controlled,
or held by him for safe keeping, trans
fer or disbursement, or in any other way
or manner, or for any other purpose; or
manner participate IN such act, every
person offending shall be deemed guilty of
moneys or other property as aforesaid as
shall be thus converted, used, invested,
loaned, deposited or paid out as afore-
said
Another statute, section 1851 of the
general statutes of 1901, provides
that "the treasurer shall be required
to keep safely in the state treasury,
without loaning, using or depositing
in banks or elsewhere. all public
into such treasury
Under these statutes it was neces-
saTy for county treasurers and others
paying money into the state treasury
to pay it in cash, and to make it posi-
BILE to use bank drafts the legislature,
in 1901, passed a law allowing pay
ments to be made by drafts, the
treasurer and the executive council to
designate banks in Topeka through
which such drafts might be collected.
These banks were required to give the
state sufficient security supposed to
cover the funds in their hands at any
one time. This statute was as fol-
lows:
THE treasurer of state by and with
the advice and approval of the executive
council, may designate one or more banks
IN the city of Topeka as a depository for
the collection of any drafts, checks and
certificatesof deposit that may come into
his hands on account of any claims due
the state. Each bank so designated as
such depository shall be required to give
security to the state, to be approved by
lection of all drafts, checks and certifi-
Gates of deposit that may be delivered to
such depository by the state treasurer for
collection; and also for the safe keeping
and prompt payment on the state treas
urer's order of the proceeds of such col
that may be issued to the said treasurer
by such depository
The following section states that the
depository shall collect such drafts
without delay and promptly notify the
treasurer of the same. 1t is under this
statute that the law against depositine
state funds in banks has been violated
in practice for years. Drafts were de-
posted in the banks for collection and
then just left there. It has been COM
mon gossip for years that somebody re-
ceived a ''rake-off'' in some shape for the
use of this money, which has been
worth thousands of dollars year
For instance, there has been over half
q million dollars left on deposit in this
way in the First National bank. c. ].
Devlin has borrowed about $1,100, 900 of
the banks deposits. Therefore Mr..
Devlin has been having the use of the
states money in that bank. At as low
a rate as two per cent, this amount
would be worth more than ten thousand
dollars a year.
The law providing for the collection of
drafts, however. provides that they
shall be collected only through Topeka
banks. 1t does not allow the state
treasurer to make such collections
through outside banks. Yet T. T. Kelly
had, on June "A, almost $500, 900 on de-
post in the banks of Wichita, Kansas
City, Kan, and Hutchinson. Almost
$4,000 of this amount was in the Fourth
National at Wichita
This sort of thing has always been alb
solutely prohibited by the statutes, an6
| constitutes embezzlement under ths
| terms of section 1858 of the Genera
| Statutes of 1901, quoted above.
But
The law provided for the collection OF
drafts through Topeka banks, even, was
| repealed by the last legislature in ths
| new state depository law. This repea
became effective on March 49, when tbs
law was published, and since that Tins
| the state treasurer has not even ha6
that weak excuse for having a deposit