The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-03-16
State viii Try to Collect Some
Bad Obligations.
Kearney County Refuses an Offer
to Compromise.
SOLD TO SCHOOL FUND.
Appears That There Is Cloud On
the Issue.
viii Try to Recover on Warrants
Represented By Bonds.


Fraudulent bonds to the amount of
$4,000. owned by the permanent
school fund Of the state, form the
basis of suit which viii be com
menced in a few days by the state OF
Kansas against kearuey county.
For eighteen years, ever since ths
bonds we're bought the state has been
going through the form of clipping q
coupon from these bonds twice each
year and dunning Kearney county for
the money. It has ali been in vain
The bonds were repudiated the day
they were issued. and the state school
fund holds the sack for $1,000 interest
as well as the $4,000 principal. The
total amount involved in the proposed
litigation win be about $4,000.
For some months negotiations have
been pending with the county commits
sioners Of Kearney county, i'm an effort
to get a settlement. The state offered
to throw off all OF the $1,000 interest
and accept new 3 per cent bonds
running thirty years instead of the old
6 per cent. bonds. Today the final
answer Of Kearney county was re-
eeived. The proposition was unquali-
hedly rejected. There is nothing for
the state to do now except to sue.
being sued on this issue of bonds 1t
Is said that it has spent $50. 900 in
/ "iawing' the case. The total amount
of the fraudulent issue was s1S0O0O.
50 the state really held only a small
portion Of the total issue. Bearney
county has been generally successful
IN avoiding liability for the bonds So
the state will take a new tack in its
! proceedings. Tt VIII sue on the war
rants which the bonds were issued to
reIund- The papers in the case are
icing drawn by Special Assistant At
torney General John Dawson, VINO has
charge Of all the school litigation for
/ the state.
Topeka Lawyers Involved.
ne history OF the issuance of these
! fraudulent kearney coun-y bonds is
I hlaekened with knavery and c.orr14ry-
/ non throughout = FIRM OF ToDaIrae
lawyers, which has now. ceased to exfst
IN swinging the deal
The bonds were issued on October 1.
1855; Inc county was organized in
april 1888, only six months before the
+ ponds were issued The law says that
+ a county can not issue bonds until one
year after its organization.
Hence when the county sent the
/ bonds up to Topeka to be registered nv
i the state auditor, the proposition was
4 rejected. The county authorities were
notified that the bonds were invalid
and could not be accepted Then 4
/ Topeka firm of lawyers Webb Cann-
! Deh q Spencer. got into communica-
4 tlCn with the kearny county people
/ and told them that for $4,000 they
could get the bonds registered Kearnr
county promptly issued $4,000 more
] bonds, and gave them to the firm Of
i Webb, Campbell & Spencer The re-
suit was that on November 8. the boudS
/ were duly registered by the state aud
ltor, and each one bears on the back
/ this stamp:
I
regularly and legally issued. and that
1t was registered in my office according
TO law this Sth day of Novembe 1885
It. Mccarthy. auditor
Shortly after this the school fund
i commissioners invested in $4,000 worth
/ Of the bonds. The bonds were to hear
j per cent, and run until 1918 They
1 are signed by W. J. Price, chairman OF
4 the board Of county commissioners.
I and j. Fl. Waterman. county clerk
/ Waterman is still living out in Kearnv
county.
The state viii make no effort to col
/ lect on the original bonds 1t is ad-
mitted that they are not good. 1t VIII
/ however. try to recover on the war
+ rants which the bonds replaced. The
warrants bear per cent. and IL the
state wins its case. it viii get consider
ably more interest than it would be
able to collect on the bonds But
+ Kearny county is evidently Of the opin-
ion that it can show that the warrants
are also fraudulent. At best II is rath-
+ er shaky case for the state. and the
+ chances are that the school fund has
i been swindled out of $1,000.