The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1905-07-14
HOCH REMOVES IT
Fixes Things So Kelly Can Give
Bond.
Makes Date for Its Operation
Sept. /.
NO PROTECTION NOW.
State Funds In KelIy's Hands
Without Bond.
Governor Hoch Won't Move on
the Treasurer.

1ONCAA 1lOCA4 AldS 1l1OTHlSQ InS
bonding company representatives who
are here figuring on the $3.50, 000
Kelly bond that the new bond will not
go into effect until September 1, in
spite of the fact that 1t must be ap-
proved by the executive council on
July 20.
This makes it practically certain
that Treasurer Kelly can give the
bling block in his way, and Governor
Hoch has removed it.
Governor Hoch's position is that the
new bond is intended to cover only
those transactions which come under
the operation of the new state de-
pository law. Since the depository
law will not be in operation until
September 1, the governor holds that
the bond will not be in effect until
that time.
The bonding companies have studied
the law, and believe that they are safe
in bonding Kelly under the new law.
But they do not want to put up bond
for what may happen between July
20 and September 1.
Governor Hoch's announcement will
make it considerably easier for Mr..
Kelly. On September 1 it is supposed
that the new state depository law will
be in full force and effect, and that
OCAiiS bAlS Ce1SSS tI1SIS VIII De very
limited opportunity for any state
treasurer to get his hands on state
money. All the transactions are
handled through the state depository
banks. The bonding companies want
to be real sure that they do not have
to assume any of the liability for
Kelly's actions as long as he has state
money in his custody. 1t was to sat
isfy the bonding companies on this
point that Governor Hoch announced
that the hnn6 will or into
feet until September 1.
There are a number of bonding
company agents in town, figuring on
the $75O,o0O bond deal with Treasurer
Kelly, and it is thought that by July
20 he will have the bond ready to sub
init to the executive council.
Kelly Is Confident.
Mr.. Kelly himself is confident and
cool. He said today: my bond will
be here by the appointed time. That's
all 1t is necessary to say"
Governor Hoch has called a meeting
OF the executive council for July 81 to
approve the bond, and it is expected
that there will be a full attendance of
state officers. Auditor Wells, who has
been anxious to start for California
this week, has decided to stay over for
the executive council meeting, so that
he cannot be accused of sighting his
responsibilities.
Kelly will have no trouble in get
ting the $750,000 bond, and in getting
it in good substantial companies" said
a state officer today. There is not
nearly as much risk in bonding Kelly
under this new law as there was under
the old law. Under the old law Kelly
handled the money, and at the present
time has half a million in his keeping,
and is practically under no bond at all.
Now is the time that the state needs
protection, and it has none. But when
this state depository law is in effect,
there is, comparatively, g. very small
amount of money ever sees the state
treasurer'S office. All the state taxes
for general funds are held in the coun-
ty repositories until called for from
month to month as needed. The other
state funds must be put into the state
repositories and there are beyond the
reach of the state treasurer.
HOch Has Given Up.
1.-THE only opportunity for dishonesty
which seems to be open to the treasurer
is the bond deposits which have to be
made at his office to secure the state
repositories. Each bank which handles
state money must put up with the
state treasurer Kansas approved bonds
equal in amount to the funds which
that bank is allowed to receive. The
treasurer Is responsible for these, but
since the law allows the bank to stamp
the bonds which it deposits as it's own
property, they can all be rendered use
less to even the most dishonest state
treasurers. Consequently there is not
lkldI any DOIl0IHS COIilpdHy ASCQ
fear, provided it does not have to as
sumo any liability until the new law
goes into effect"
Indications are that Governor Foch
has given up all efforts to bring any
kind of proceedings against Treasurer
Kelly. He says that his principal OBJ
ject is now to protect the funds which
the state has left, and it seems that
even this object will not be attained.
The treasurer's bond was half wiped out
by the Devlin failure, and the other
half is all hypothecated by the First
National loss. There is still about half
million dollars in the state treasury,
which is scattered around among the
banks in various parts of tile state. and
is entirely unguarded. If 1t should all
be stolen or lost in bank failures the
state would probably llavesto pocket the
loss. Under the governors ruling con-
cerning the $750,000 bond, the state will
obtain no protection from it for. the
half million lying unguarded in the
banks.