The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-05
MAY GUST KELLY,
Governor HOch Considers De.
cIaring Office Vacant.
Says That Treasurer Must Give
Additional Bond at Once.
UNDER THE NEW Law.
A Failure to Comply Vacates
the Office.
Executive Council Will Consider
the Situation.
SUSPEND PAYMENTS.
State Must Do This to Keep
School Fund Intact.
Kelly Says State Vault Wasn't
Safe for Money.
That the Reason Given Why He
Left M0neyin the Bank!!
State Must Do This to Keen
School Fund Intact.
Kelly Says State Vault Wasn't
Safe for Money.
That the Reason Given Why He
Left Money~in the Bank!!

LeIC MOn0yS1n the Bank!!
There is a possibility that Governor
Hcch may be called upon within the
next 48 hours to declare vacated the Of
fee now held by State Treasurer I. T.
Kelly.
Governor Hoch says that Treasures
Kelly must give an additional bond in
the sum of $5O0,00O to protect the state,
and that the additional bond must dis
tinctly provide that the old bond is
valid and in full force and effect. Gov
ernor Hoch says that he will demand
this bond under the provisions of the
new state depository law.
State Treasurer Kelly today said: n
do not. expect to replace Mr.. DevIin on
this old bond. am ready at any time
the governor directs to give new bond
under the new state depository law"
Section 16 of the state depository law
says: eff the state treasurer shall fail,
neglect or refuse to give the bond re-
quired by this act, the governor shall,
in writing, declare his Office vacated, -
and appoint successor to fill the va
cancy.'
The facts of the case seem to be
that if the governor requires State
Treasurer Kelly to give Z new bond in
addition to the bond already in exist
BILE for Mr.. Kelly to comply with the
demand. This would throw it upon
the governor to declare Kelly's Of
flee vacant.
Governor Hoch said this morning:
"Of this you may be certain; the bond
now given by Treasurer Kelly must
be strengthened. Every possible
measure will be taken to protect the
state. We have three holds, any one
of which may protect us from loss;
first the bond given by the bank it
self; second, ,-fhe assets of the bank, of
which the state is, I believe, a pre-
ferred creditor; third, the bond of
100000 given by the Title Guaranty
and Trust company for the state
treasurer. With such protection the
state ought to come out of this thing
without loss.
SCI have asked Attorney General
Coleman for an opinion about the liza
! bility of the state treasurer on his
| bonds given under the old law, and
the effect of requiring a new bond un-
| der the new law. He has given me no
opinion yet, but I am informed from
high authority that a new bond, ad-
ditionaI to the old, can be required,
and that is the course upon which I
propose to act
'I had intended to call a special
meeting of the executive council for
this afternoon, but owing to the fact
that, exclusive of Mr.. Kelly himself,
we cannot get quorum until Auditor
| Wells comes in, which will not be
until late, it is probable that the
meeting will not be held until Thurs
day morning. At this meeting. we
| will have a general discussion of the
situation, and will decide what can
best be done. I hardly think that
Treasurer Kelly will participate in the
meeting, as the matter SO directly
| concerns his interests"
"What will be DONE was asked
"about calling in the deposits of state
money which have been made at
Hutchinson, Wichita, Kansas City and
/ other placeS?'
THAT is a matter to be discussed
by the executive council" replied the
governor.
May Suspend State Payments.
Suspension of payment on state war
suit of the closing of the First National
bank, which carried with it $547. 900 in
state money.
This will be done to preserve the per-
manent school fund of the state. of
which $243, ,2S6.10 is in the treasury. The
law says that the permanent school
fund must not be diminished. If the
state should continue to pay out money
out of the 100000 not involved in the
First National wreck for its current
expenses, it would very soon be with
drawing money which belongs to the
perrna nent school fund.
A suspension of payments would be
effected by the refusal of the state au-
ditor to issue any warrants for current
expenses. All the people who work for
the state or who furnish supplies for
the state, would have to wait for their
money until the June payment OF taxes
would be available. The state is sup
posed to have enough money in its gem
eral revenue fund to carry it until Sep
tember If it draws on the June taxes
before that time, it will be running
: itself short at the end Of the year.
Whether or not this radical course
will be adopted to preserve the integrity
of the school fund will not be decided
until Seth G. Wells state auditor, ar
, rives in Topeka this afternoon from his
|, home at Erie.
| SO far. Assistant State Auditor James
Nation has refused to issue any war
: rants since the collapse Of the bank. He
was asked today whether he had any
instructions to do Sc from Auditor
Wells
= mo" he said, AT have heard nothing
' from Mr. Wells about this matter, but
? am simply adopting this plan as a tenn
porary measure until his return
Kelly Makes an Explanation.
State Treasurer T. T. Kelly this
morning asked a State Journal re-
! porter to step inside of the vault in the
; 1