The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-07-06
LETS KELLY OUT.
Judge Dana Relieves Him Of
Oklahoma Shortage.
Also Wipes Out Nearly All
States Claims.
MR. COLEMAN'S CHARGE
Says Conspiracy Existed in
Auditors or Treasurer's Office.
Purposely Neglected to Stamp
Warrants State Property.
10 DECIDE ON MONDAY
Judge Dana Will Say if Kelly Is
Liable.
Bond Brokers Come to Defense
of Treasurer.
TO DECIDE ON MONDAY
Judge Dana Will Say if Kelly Is
Liable.
Bond Brokers Come to Defense
of Treasurer.


Judge A. ". Dana in the district court
this morning sustained the demurrer
TO the third count in the case of the
state against State Treasurer T. T..
Kelly This is the charge Of s6,66S
shortage on account of loss Of interest
on Oklahoma warrants sold. Judge
Dana holds that Treasurer Kelly had
the right to dispose OF the Oklahoma
R arrauts at any time he saw fit.
The second count in the states case
was Withdrawn by Attorney General
C.. C.. Coleman, when he found that the
state had no evidence to sustain it.
This count related to a shortage of S99
in coupons owned by the State Agricul-
tural college fund. a deposition by
President F. r. Nichols of the Agri-
cultural college disposed Of any ir-
regularity in this transaction.
The only thing left Of the case to be
decided by Judge Dana is the liability
Of Treasurer Kelly for two charges un-
Qef the first count. There We're orlgl-
nally eleven charges in this count Nine
Of them were practically Withdrawn this
morning Dy General Coleman in his
s argument. He pins his hopes to an al
4eged shortage Of $42750 in the coupons
of Augusta township, Butler county
bonds. and an alleged shortage of $50 -26
in the bonds Of Leroy township and
city in Coney county.
The nine charges which were allow
ed to go by default were these.
Douglas county, $40.
Lincoln township, Ellsworth county,
5000
Eagle township Harper county.
Silver Greek township. Harper coun-
ty $50.
Lane county. s525
Larned city. $3.50
Banner township, Pratt county,
Richland township. Pratt county.
S34O.
springvaIe township, Pratt county,
$31S.60.
At the conclusion of the evidence and
argument at HIS this morning Judge
Dana announced that he would pro
badly decide the case on Monday morn
ing. July 9.
COleman's Sensational Statements.
Attorney General Coleman. in closing
his argument Of the case today. declar-
ed that l.. his opinion q conspiracy has
existed for some years past between en-
ployes in the auditors office and the
state treasurer's office, for the purpose
of stealing coupons from bonds pur-
chased by the school fund commission
ers- He says that this continued up to
the time that Walter Payne became as
sistant state treasurer in charge OF bond
transactions. when Payne took steps to
protect the state which put a stop to
the plot. Mr.. Coleman said:
In many Of -hese shortages the audi
tors records show two coupons detach-
ed. in addition 10 what par and accrued
interest would be, and the treasurer's
records show one coupon detached in
addition to what par and accrued in
terest would be. That is a difference
which runs through all the shortages in
this case, and in another case which
may be fled later In all cases Coupons
NO ] and are not stamped state prom
ertE. and No 2 is properly accounted
for. This to my mind shows the exist
ence of a scheme. or system by which
al but two coupons were stamped state
property in the auditors office Some
eTnploye there or in the treasurer's office
then detached each one coupon That's
the only way can account fo1 this pc
culiar situation"
Here Judge Dana interrupted THAT
theory would be ali right but for the
testimony Of your board Of school fund
commissioners, who, spea king for the
board. says that the clipping Of Soupons
has been permitted by the board. II
that was the practice Il is not very sur
prising to find coupons missing. because
they might have been clipped by the
bond brokers.
II want to say further continued
Mr.. Coleman. that this scheme OF. svs-
tenn seems to have been interrIDted
when there was change made i'm the
HAAAAF VI D0AQ EACfk III the LTEdEl1TnTfS
office. When Mr.. Walter Payne came
into that office and commenced to make
8 notation on the backs CT the bonds
# then became unsafe for some parties
10 follow their practice further. OF
course [ am not a witness in this case.
and can not express my personal opinion
about the attitude Of the school fund
commis- 7ners on the clipping Of cou-
pons. but I was OF the impression that
Mr. Dayhof did not testify positively
eancerntns all -hese various shortages .
7 think he said that he remembered
personally that the board authorized
the clipping of all the coupons involved
IN ms case" caid Judge Dana.
Bond Brokers Help EeIIy.
The trial which commenced Thursday
morning and continued throughout the
day reached the 'argumentative" stage
this morning. The indications are that
the state will recover little OF nothing
The case as presented to the court has
been a appointment to those who rad
expected the findings of the FIaslSins &
sens report to be converted into cash
asset for the state.
Some OF the apparent shortages as re-
vealed by the Haskins & Sells report
have been explained by Mr. KelIv's vii
nesses. This was the case ia the lin
celn township, Ellsworth county. short
age. D positions OF the township ana
county officials showed that counos NJ
s amounting to about $3.50, which was