The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1906-01-10

Interest Coupons in State
Treasury Tempered With.
estate Property" Stamp Re-
moved From Backs of Coupons.
MR.MORRIS' DISCOVERY
Said to Be Fully Explained in
His Report.
Gov. HOch Talks About the
forthcoming Report.
Tells Why Norris Was Absent
for Six Weeks.

D. c. Morris, who has recently. COM
pleted his examination of the state
treasury for Haskins & Sells, has
made the sensational discovery. ac-
cording to a report in circulation to-
day, that the state property stamp
has been erased from the backs Of a.
lot of the interest coupons owned by
the state school fund.
Presumably this was done SO that
the coupons might be cashed and the
money diverted from the school fund
on the pretext that the coupons did
not belong to the state and were clip
ped by consent of the school fund
commissioners before the bonds be-
came the property of the state
How extensive this gross fraud was
practiced has not been revealed. It is
presumed that the Morris report, filed
yesterday afternoon with Governor
Hoch, will give the full details of the
affair.
Neither is it known whether the al
legged erasures were made during the
Grimes or Kelly administrations.
Kelly and Grimes are said to be
confident that the Morris report and
Governor HOch will relieve them Of
all responsibility for the coupons
which the investigation shows were
not stamped state property. It is
therefore Of great importance to them
that all the coupons investigated shall
be destitute of this stamp, provided
the money is not shown by the records
as having been turned over to the
school fund, where it belonged.
The erasure of the ''state property
stamp is an element which did not en-
ter into the case during the ROWett
Investigations. It seems to have been
dug up as a brand new feature in the
scandal by Accountant Morris, or
some of his assistants.
Governor VIII Take Time.
After a long conference with Ac-
Governor .Hoeh said to a reporter for
the state Journal.
1T may be some little time before
this report is made public. One Of the
most important parts of the work, in
my opinion, is the establishment of
! better systems of bookkeeping and ac-
counting in our state offices. Mr.
Reed, Mr.. Morris assistant, has been
working on this during the absence
of Mr. Morris, and I understand that
/ it is practically completed. I shall
want time to go over this whole re-
! port before making it public"
Did Mr.. Morris give an explana-
! ton of his long absence which was
satisfactory %
He said" replied the governor.
that he was hard at work on the re-
port during his whole absence; that
he had to have the whole report re-
copied While away. That is rather a
surprising thing to me- He took with
h1m to New York what I supposed
was the final copy Of the report. but
it seems that he considered it neces-
sary to have the whole thing re-
copied
It is known that the governor has
been sending some mighty sharp tele-
grams to Mr.. Morris recently for the
purpose of fastening his return to
Topeka. 1t is possible that there may
be some difficulty about adjusting Mr..
Morris per diem of SIS during his
six weeks absence.
What the Report VIII show.
The supposition is that the Morris
report will show that two classes Of
coupons are unaccounted for on the
treasurer books.
one class of coupons will be those
J clipped from bonds purchased at par.
with nothing on the records to show
that the coupons were clipped before
| the state purchased the bonds. ana
with no state property stamp on
the back of the unaccounted for
coupons
Another class will be the coupons for
which money was received either at
| the state agency in New York or at
the state treasury but which hasn't
been turned over to the state school
1und THESE coupons are supposed to
have been stamped state property. It
is supposed to have been from some Of
this class Of coupons that the state
property stamp has been erased.
The first class of missing coupons
VIII doubtless be held by ex-Treasurer
Grimes and Treasurer Kelly to have
been clipped before the bonds were
bought by the state, and by consent of
the school fund commissioners for the
purpose of reducing the interest and
giving the bond brokers their commits
sion. The law, however, does not recog-
nize such transactions The records
simply show that the bonds were pur-
chased at par, and there is nothing to
show that all the coupons were not at
tached when purchased.
There is no doubt that when the rec
ords show that money has been actual
~ paid into the treasury in exchange
/ for coupons stamped state property.
and such money is not credited to the
school fund, the treasurer viii have to
/ be responsible for the shortage. Some
body has misappropriated the funds.
As to the amount Of the shorta ge Of
each class which the Morris report will
show. nothing authoritative can be
/ learned. The shortage found by the
/ Rowett investigation was about $4,000
/ for the ffty-five counties Of the state.
/ If the other counties run in about the
4 same proportion the shortage in the
Morris report win be from $4,000 to
i s8c ,00e.