The Topeka state journal., 1908-07-22
Fund Commission Limits
Bond Purchases.
Will Continue to Do Business
Under 1907 Valuation.
LEGISLATURE FORGOT
Did Not Change the Limit to
Fit New Valuation.
Would Be Possible to Buy
Doubtful Bonds.

1t has been discovered that when
the special session of the legislature
was limiting the amount Of tax levies
which may be made under the new
system of full valuation" of the
property of the state. it forgot to
change the limits on the amount OF
bonds which the state school fund
commissioners can purchase from any
given municipality.
The law Of 1905 provided that no
bonds in excess Of 15 per cent OF the
assessed valuation OF the county
should be purchased by the state
school fund. This provision still re-
mains in effect But that provision
was intended to apply to valuation
Of about one-fifth Of the full value Of
property.
since the assessed valuation of
property has been increased, it would
be possible for the state school fund
commissioners to purchase five times
as many bonds of any given munich
pality as before, without any real in
crease In the amount or assets back
Of such bonds. t.
In order to avoid any criticism
which might arise from taking ad-
vantage Of this state OF affairs, the
state school fund commissioners have
decided to continue to base their bond
purchases upon the 1907 valuation. A
municipality offering ponds must have
a debt of less than 1 5 per cent of the
1907 valuation before the school fund
commissioners will look at the propo-
sition.
The school fund commissioners have
not secured any legal opinion from
the attorney general concerning their
rights or duties. under the new valua-
ton. The law simply says that the
school fund commissioners shall not
purchase bonds issued in excess of a
certain fixed per cent or the valuation
of the school district, city, township,
county or town issuing those bonds.
Hence the commission can exercise
the arbitrary right to reject any
bonds 1t secs fit, even though those
bonds may be within the limit fixed
by law. The board, as safe, con-
servative business proposition, will
continue to buy bonds under the 1907
valuation, until the legislature meets
and fixes the limits to correspond
with the vast increase in valuation
made under the new system of assess
ment.
The school fund commission at Its
last session rejected 100000 bond
issue of the Wichita board of educa-
ton, for the reason that the issue was
in excess of the limit as applied to the
1907 valuation. Other minor bond is
sues aggregating 100000 were re-
jected for a similar reason.
An issue of $4,000 Salina refund
ing bonds at 5 per cent was rejected
at the request of the Salina people.
who have a chance TO sell the issue
at 4 Y per cent. The policy of the
state Is not to force a community to
sell bonds at a higher rate than is
necessary for it to pay to get the
money it needs.
An issue Of $1,000 of Miltonvale re-
funding bonds was rejected. The
bonds were offered at 81 cents on the
dollar by Kelly g. Kelly, Topeka bond
brokers, and bear n per cent. The
board felt that it did not care to han
die refunding issue through bond
brokers.
The board purchased the following
bonds:
District SO. Trego county, $3.50, 6
per cent; District 5S, Sherman coun-
ty. 500, 6 per cent; District 3S, John
son county, $4,000, per cent; Dis
trict 81, Ness county, $1,000, S per
cent; District 81, Ness county, $1,000,
5 per cent; Ell Dorado city. s4.47s. 5
per cent