The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-02-16
Explanation of Oklahoma War
rants Doesn't Explain.
Result in a Loss Instead O.
Saving to State.
HERE'S A NEW VERSION
We're Sold to Save Use of s'NOt
Paid'' Stamp.
Queer Kind of a Business Deal
for Kansas.

Explanations of the Oklahoma war
rant shortage in the state treasury Of
Kansas have received a severe Jolt. The
state did not save per cent of interest
/ by selling the Oklahoma warrants as
/ has been claimed. Rather than being
an economy to the state to dispose of
! the Oklahoma warrants to greedy bank
! ers, it really resulted in a material loss,
/ just as is shown in the Haskins and Sells
report.
Ex-State Treasurer Grimes has claim
ed that one of the chief reasons for sell
/ ing the Oklahoma warrants was to save
! paying 7 per cent On Kansas not paid
warrants The Oklahoma warrants
bore e per cent. Grimes says in his
self-prepared statement Of defense:
4 mentioned Ito the other state Off
cers) that / held Oklahoma warrants in
my possession that drew per cent in
terest, and that if stamped state war
rants Not paid for want of funds that
such warrants would draw per cent in
terest, and inasmuch as the Oklahoma
warrant money belonged to the general
revenue fund, it was deemed best that
t if I could get someone to take them at
/ par that the state would be ahead as
far as interest was concerned, and save
the state of the disgrace of not being
able to pay her just debts. So instead
of losing cent, the state was ahead,
and leave it to any fair minded citi-
zen ana taxpayer II / could be criticised
] for my actions in this matter"
I This statement would give the impress
/ sion, as it was evidently intended to do,
that Mr.. Grimes had saved Kansas pay
ing per cent of interest by selling the
i Oklahoma warrants.
Kansas has not paid per cent inter
est on its not paid warrants but once
since George Cole went into office as
state auditor. Prior to that time, the
state had been paying per cent. Mr..
Cole held that as per cent was the
legal rate of interest in Kansas, it was
not necessary to pay but 8 per cent on
unpaid warrants. And per cent was
the rate which Kansas paid during the
whole of Frank Grimes administration.
It was therefore no economy to the state
to sell Oklahoma warrants, even if by
so doing. Kansas could avoid the use
Of the not paid" stamp.
In the year 1908, at the beginning
Il Of T. T. Kelly's administration as state
treasurer, the legislature by enactment
8 reduced the rate of interest to be paid
on state unpaid warrants from per
cent to 4 per cent.
Nevertheless. NIr. Kelly kept on sell
ing the Oklahoma s per cent warrants,
on which the state might just as we'll
have reaped the profit instead of some
of KelIy's banker friends.
OF course it is not to be assumed
y
or Kelly to sell every Oklahoma war
rant they got their hands on, simply
to keep the state treasury from run
ming out of cash. The state is not
quite as near bankruptcy as that. even
though that might be the presumption
to be drawn from Mr.. Grimes state
ment. During most of the time, the
state has plenty of money. It IS only
at intervals tha It might be desirable.
even If legal. to sell the per cent
Oklah Oma warrants. But Grimes and
Kelly seem to have sold every Okla
: ! hOma warrant theV could get hold of.
OF course 1t is assumed that the war
rants were sold to some bank, which
held them and collected the 6 per cent
interest. But it is by no means certain
that some of the warrants, at least,
were not ''purchased' by the state
treasurer himself with state funds,
simply keeping the warrants on de
: posit to balance. It would have been
easy for the treasurer himself to col
lecf the 6 per cent interest in this way.
The amount of interest on Oklahoma
warrants which the state has sacrI-
} feed so far is divided as follows:
HeheboWer administration 5 SAL 1
Grimes administration 13,151.S1
Kelly administration -...... S,92l.Sf
Grimes Inclined to Back Up.
Ex-State Treasurer Frank Grimes.
lwhen questioned concerning the
amount of interest which the state
paid on its mot paid" warrants ad-
mitted that this was really a minor
feature of his defense in the Oklahoma
shortage matter. He said that the
principal reason for selling the Okla
homa warrants was to save using the
mot paid" stamp.
1T is my recollection said Grimes,
that 1 paid per cent on only one lot
of our not paid warrants after l Went
into Office The law called for per
cent but I couldn't see the use of pay
ing per cent when the legal rate in
Kansas Is only 6 per cent So L re-
fused to pay but s per cent This made
some of the people mad, but stuck to
it." It will be noticed that both Mr..
cole and Mr.. Grimes claim the honor
, of having stopped the Z per cent deal
.sOf course the real reason for selling
the Oklahoma warrants, continued
Mr.. Crimes was to save stamping our
warrants not paid for want of funds
When I was elected treasurer, people
used to come UP to me and say, Frank
Won will protect the credit of the state.
Won won't stamp warrants not paid
for want of funds. I couldn't disap-
2 point these people by stamping var
rants if there was any way out of it.
So we decided to sell the Oklahoma
: Then Mr.. Grimes advanced a brand
4 new defense. He said: Il felt that /
E was responsible for the Oklahoma
: Warrants Tt was my duty to see that
= the state got the face value of the war
5 rants Had the warrants deprecated
g in value while in my hands. I would
Q have been responsible for the depre-
e citation People would have said ]
should have sold the warrants at face
2 value while I had a chance So I be
lieved it my duty to get them con-
: verted into cash
Warrants Command a Premium.
1t is wen known fact that the Okla
homa warrants were in such demand
. | and bore such a high rate Of interest
: / that they commanded a premium with
those who were in the market for good
paper A man who has had extensive