The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-09-19
HE'LL PAY IT BACK
Treasurer Kelly Decides to Re-
turn That 50 ,O8O.
Used It Without Authority to
Paysfor Old Bond.
COLEMAN TO DEFENSE.
Attorney General Says Kelly's
Action Was Natural.
However It Was Contrary to
the Law.
TO DEFENSE.

Tom Kelly has at last come to the
conclusion that he will return the
$4,000 which he appropriated some
time ago to pay for the 100000 Title
Guaranty & Trust company bond upon
which the state has brought suit to
protect itself from the First National
loss. Mr.. Kelly's decision has been
brought about by ruling from Attor-
ney General Coleman that the law did
not permit the use of the money for the
purpose to which Kelly applied it.
1t was the purpose of the law to al
low the state treasurer $4,000 to pay
for the bond to be given under the
new state depository law. Kelly took
the money and paid for the bond which
he gave before the law was in effect.
When Governor Hoch announced that
the money would have to be paid back
to the state, Kelly refused to comply
with the demand. Instead he wrote a
letter to the attorney general, in which
he laid the blame for his action on
Assistant State Auditor Nation. He
said that Mr.. Nation drew the clause
providing for the $4,000 appropriation,
and intended it to apply to the old
bond. He claimed that seven of the
nine members of the senate banking
committee told him that this was their
understanding. He said that acting
upon this authority, he went ahead
and drew the money. and that the
claim was audited by the state auditor
without question.
The section of the law under which
Mr.. Kelly drew the $4,000 to pay for
his old bond was in part as follows:
within twenty days from the TAX
ing effect of this act, and before any
notice shall have been given for re-
ceiving proposals or any other steps
taken hereunder, the state treasurer
shall give another bond, with good and
sufficient sureties in an amount to be
fixed in writing by the governor. E.
If a surety company's bond is given,
by the state treasurer, as required by
this section, the expense of such bond,
or premium charged therefor. shall be
paid by the state treasurer out of the
general fund, and there is hereby ap-
pronriated for this purpose the sum OF
$1,000. or so much thereof as may be
necessary, for the term of the present
It is of course apparent from the read
ing of the law that there is not the slight
est reason to believe that the old bond was
meant; it is plain enough that the 5000
was to cover the expense of the bond
which was to be fixed in amount by the
governor. The governor did not fx the
amount of the new bond until after Treas
urer Kelly had paid out the 81, 900 for the
old one, and when he did FIX IT Mr., -kelly
which would give him the $750.0O0 bond re-
quired. He therefore called upon .n hi. his
1r1enQS Tor a personal DOnQ, ana SdN60
the state the 81 600.
In his opinion Attorney General Coleman
smoothed things over for Treasurer Kelly
as much as possible. He said that the
section of law was long and somewhat in
volved in its terms: that, having the un-
derstanding that it was designed to enable
him to use the money as he did, it was
natural for the treasurer to use it as he
did: that the assistant state auditor had
the same understanding: that while the
Interpretation put upon the law both by
the treasurer and assistant state auditor
was not unreasonable. yet it can not be
sustained. The attorney general says the
treasurer acted under an honest under
standing of the law as he saw it, but
which strict Interpretation will not bear