The Topeka state journal., 1908-05-14


There is an imposing array of legal
talen arrayed on both sides of this
case. For the state appear Attorney
General F. S. jackson, ex-Attorney
General c. c. Coleman, Gleed. Gleed,
Palmer & Hunt, and F. L. Williams Of
Clay Center. For the defense: Loomis,
Blair and Scandrett and A. F. Will
liams.
Williams Outlines States Case.
The time from 1 o'clock until was
consumed in impanelling a jury. Mr..
F. L. Williams, in outlining the states
case, said in part: THE state asks to
recover on a bond, the First National
bank being the principal and the Unit
ed States Fidelity and Guarantee COM
pany the surety. The bond was ac-
cepted and filed January 20, 1908, under
the law which permitted the state
treasurer to leave checks, drafts and
other negotiable paper with a bank
designated as depository for collec--
ton. The bond given by the bank and
furnished by this bond company was
for $25O,0O0. Up to January 20, 1905,
there was $160000 in the First National
to the states credit. On July g. 1905,
the state had $547, 7,575.06 in this bank.
The First National closed its doors
that day, and a few days later a re-
ceiver was appointed. The state treas
urer, a short time afterwards, made
formal demand in writing on the
banks officers and the receiver In
charge of the bank, for the states
money and was refused payment That
later the receiver paid back to the
state in three dividends the sum Of
$44S, ,S59.01. This left a balance of $685.
530.05 due the state from the bank as
principal, and SAB 946 interest That
the bank having refused and been un-
| able to make payment, the state seeks
to recover from this banks surety, the
u. S. Fidelity and Guarantee company.
on the legal bond of $25o.oOo given by
said company for the protection Of the
state the sum total, principal and in
| terest. of $142. .476.05
Mr.. Blair's Pointed Speech.
Mr.. Blair. in a mastery and cutting
argument, outlined the case for the
defense, or rather the United States
| Fidelity and Guarantee Co., in which
he said that the state legislature had
provided for safeguards and protec-
| ton for the public funds. 1.-The state
treasurer was placed under million
dollar bond to insure the safety of the
| funds intrusted to his care. The law
required that all state funds be kept
| in the state treasury. That the gov
| ernor, auditor and secretary. of state
check over the state treasurer's books
and accounts and count the money in
| the treasury at least once a month.
That these inspections be made with
out notice any time the governor saw
| fit. There was one exception to this
| law about keeping all the states
| money in the state treasury said Mr..
| Blair, land that was that the treas
| urer could deposit in banks designated
| as state depositaries certificates,
| checks and other similar paper for
| collection. The First National was
| one Of these banks The Central Ma
| tional was another, and the Mer-
| chants National a third. The law re-
| quired that these banks should give a
bond, to be approved by the execu-
| tive council, to pay out all state
| money on demand. T. T. Kelly took
| his office as state treasurer on Janu-
ary IL, 1903, succeeding Treasurer
| Grimes. The latter had on deposit
| when he gave up his office $155,O0O
| of the states money. He gave his
| personal check to Kelly for this
money and the latter deposited the
entire sum in the First National in his
own name. Kelly added $4,000 more
to this sum on deposit in the First Ma
tional bank during the same month.
| At this time the First National bank
made out and filed a bond for $780,
900 to collect and turn over the
| money on all the states deposits on
| demand. But Treasurer Kelly had de-
posted over 100000 in the First
National before the bond was made
out and accepted. Kelly put every
| thing that came the states way into
the First National, including checks
postoffice and money orders, school