The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-05-30
COLEMAN LOSES IT.
60 from Paes one1
Hisforr ID tae &C.

BurfoW. secretary Of state, ana py L -
Dayhoff. superintendent OF puolis ~
The suits arose from an article pub
uahed in the State Journal OF aug -
20, 1904 This article was hes1S 81
Black and Ugly" and commences a
follows:
Appearances indicate that con
spiracy has been formed by whlcn me me
scne fund has been looted, ana sio, IL
facts point toward certain state oIiatls1iS
as among the conspirators-
The article then referred TO the p1i-
chase Of 1925. 600 Of Comancne coules
bonds by the school fund commission
ers. c. c. Coleman, J. r. BurroW anu
T. L. Dayhoff, mentioning T. y, hsAis,
as state treasurer, and A. A Godafo as
also engaged in the transaction.
The article alleged many pecuhaf an az
unusual incidents in connection Win
the transaction and criticised the con-
rnissioners for purchasing the bonas
which had a peculiar history OF their
own.
The charges made by the state Jour
nal were IN -biref as follows:
That the Comanche county bond issue
OF s1zS 600, which was purchased TOT
the state school fund by Mr.. BurroW.
ME, Coleman and Mr.. Dayhon, was
fraudulent in its inception. and was an
Investment of very doubtful security:
That the state school fund cofnfnls-
eioners purchased 1920 Of Comanehe
county bonds bearing AZ per cent Iii
ferest, when the same investment naa
been offered them bearing per cent
That the bonds were purchased a.
more than their market value by the
commissioners. which is expressly pro-
hibited by law.
That the assessed valuation of Co
manehe county returned by the county
clerk would not allow the bonds to be
purchased by the commission, because
the indebtedness Of the county was far
in excess Of fifteen per cent Of the val
uation and that the valuation was
very largely increased by state
Treasurer Kelly and Secretary Of STATE
Burrow. of the state board of equaliza-
ton, to an amount that would just let
the bonds in.
That Attorney General Coleman
overturned former presidents by hold
ing that the bonds could be purchased
on the valuation fixed By the state
board instead OF that returned by the
county clerk
That the records which would show
the purchase of the bonds we're kept
from. the State Journal.
That the bonds were registered at
night out Of business hours.
That Comanche county securities al
ready held by the state school fund
were past due and unpaid
Bonds Issued by Fraud.
At this time a short history of this
famous case will be of interest. It ap-
pears that back in the early seventies.
Comanche county. then inhabited by
only one or two families. was fraudu-
lently organized by a gang Of financial
pirates who elected themselves to the
county Offices, and proceeded to issue
q large quantity of 10 per cent bonds.
The bonds were sold to strangers for
about 8 cents on the dollar and of
course no interest was ever paid. Dur
ing boom times in the eighties ten
H.
When Comanche county commenced to
SETTLE up. and had population of
about 5000, these old bonds turned up
Tor payment. The people of Co
nanehe county "lawed1 them through
the United States supreme court and
the decision was finally adverse to
them, the court taking the ground that
the state legislature had at one time
recognized the fraudulent county or
ganization, which validated the bonds
1t was, Of course, impossible for the
county to pay, and the debt was com
promised by issuing new bonds to the
amount OF about $4,000 at the "a te
or per cent These bonds were
held in the east.
The owners of $4,000 worth of the
ponds asked Kelly & Kelly, the Topeka
pond brokers', to find purchaser for
tneir bonds Kelly & Kelly tried to
told +. B. Kelly that he might helm
MIN dispose Of bonds to the state
schooi fund. and Kelly authorized Cod
ara TO offer the commission these
Conanche county bonds.
Kelly claimed that he too offarad
the per cent bonds to each Of the
school fund commissioners BY letter.
and also offered them to Mr.. Coleman
IN person. But the offer was NOT ac-
cepted. Ex-Attorney General GODDARD
got an option on the bonds, arranged tn
refund them at 4 Y per cent and in
that shape the school fund commits
stoners bought them. Mr.. GODDARD re
ceived commission of $4,000 for re-
funding the bonds. besides the profit
$1,000. '@i'" par
The upshot of the matter was that
the school fund commissioners pur-
chased the bonds from GODDARD at ~
per cent instead of PURCHASING tn q
per cent bonds from II. b. Kelly
The school fund thereby lost $50 530
an interest.
one of the important features Of the
case was the cloud on the legality IF
the purchase. The law provided maj
the school fund should purchase no
bonds In excess OF Is per cent of tbs
assessed valuation of the municipality
or county issuing the bonds ne
COmanche county valuation was too
low TO admit of the purchase of the
2123. 600 issue. So the state board Of
equalization, Of which Kelly and Pqr-
POW are two of the members raised
A.
ton, and Attorney General Coleman
made ruling that the valuation fixed
BY the "equalizerss and not the value re-
furned by the county assessors. should
pc tne pasls IN figuring the amount Of
bonds which might be legally ptIr-
chased Under this "equalized' valua-
ton. and the new ruling Of the attor-
ney general. the school fund commits
sioners went ahead and invested S12s-
600 Of the state funds in the Comanche
county securities.
One OF the suspicious circumstances
or the case was that the $12S. 600 in
bonds were registered at night ana
the fact was suppressed from the p,,b-
lie Furthermore. the state superfn-
6endent refused to allow the state
Journal representative to inspect the
public records Of the Office concerni,,sJ
the matter
This was in substance the story
which the state Journal printed on
August 20. 1904 which Is the cause