The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-10-07
100000 Worth of Bonds Are
at Stake.
OWNED BY THE STATE.
Lawrence Has Paid Interest to
Face Value of Bonds.
Now Wants to Be Relieved of
Paying Principal.

decision was made by the supreme
court on Saturday afternoon to the ef-
fect that the case brought by the state
TO collect 100000 in bonds issued by
the city of Lawrence must be re-
argued. This case was argued orally
and upon briefs submitted some time
ago but because of the fact that Jus
tice Benson is new on the bench and
that several justices were absent when
the case was argued the court wants
TO near the arguments again.
The time was not set for the argu-
ments but they will be made in
snort time. The court asks that the
defense confine it's arguments to the
three questions which follow:
1. Do the territorial statutes under
which the defendant city was incor-
porated give authority for the issu-
ance of the bonds in suit?
2. Is the act of April 5, 1870. In
conflict with the provisions of section
1, article IL OF the constitution?
8. If it should be held that the
bonds were unlawfully issued what ef-
feet should be given to the act of
March Z, 1883?
This case is one OF the largest bond
cases in which the state is interested
The bonds, amounting to one hun
dred thousand dollars and bearing in
terest at per cent, were issued m
1870 and were to run for twenty years.
The money was used for the building
of Frazier hall at the university ana
were issued by the city after, an elec.
tion in order to put the university on Il
basis needed for the many students
who were then attending the school.
The bonds were issued under a speciaf
act which also required that, the state
school fund commissioners purchase
the bonds for the permanent schooI
fund. This was done.
In 1888 Lawrence found itself in a
lot of trouble. 1t had Issued large
amounts of bonds for railroads and
these were still outstanding and some
We're coming due. To the people of the
town it seemed as If all their property
would be taken away If an attempt
was made to pay the bonds. An ap-
peal for help was made to the fegrsla-
ture and that body passed a. bill, in
tended for the relief of the town. The
bill provided that when the city had
paid interest amounting to the full face
value of the bonds that the indebted
ness should be cancelled as far as the
city was concerned. Up to that time
the city had paid between seventy ana
eighty thousand dollars in interest on
the bonds. In order to protect the
school fund when these bonds were
cancelled the same bill provided tha-
the regents of the university should
issue twenty-year notes for the one
hundred thousand dollars principal of
the city bonds. The interest on these
IlOteS W dS To Oe pdlu ITOI III the university
endowment fund held by the state
treasurer for the benefit of the univer-
sity.
When the city had paid the interest
equal to the principal of the bonds the
further payment of interest was stop
ped. The bonds have now been IN de-
fault about fifteen years. The board
of regents of the university decided
that the law authorizing them to issue
the bonds as a relief to the city VEG
invalid and refused to issue the notes.
The state brought suit to compel the
payment of the principal of the bonds
and accrued interest. The case was
to johnson county on
change of venue and then appealed to
he supreme court.