The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-04-27
DO. NOT LIKE IT.
Montgomery County People Ex-
cited Over New Bond Law.
Claim That 1t Is in Interest of
the Brokers'.
OBJECT TO PROVISION
Makes No Arrangement for Pay
ment of Bonds.
Was Prepared by the Judiciary
Committee of House.

Montgomery county is greatly ex-
cited over the recent action of its
county commissioners, who at a re-
cent meeting decided to take ad-
| vantage of the law passed by the last
legislature and liquidate the county's
outstanding warrants in the sum of
| $260.000 in the form of refunding
I bonds. These bonds are to bear four
| and one-half per cent interest and run
| for a period of not less than thirty
years. 1t is the fact that no payments
| on the principal are provided for in
| this bond issue that has excited the
Montgomery county people, who are
| indignant alike at the commissioners
| for acting under the new law and
| the legislature for passing such a law,
which they claim is solely in the in
| terest of the bond buyers and forces
| the people to pay the freight. 1t has
! been figured out that the people of
| the county Will have to pay s301,5O0
in interest on the $260,00O Indebted
ness.
Had the lobby for some bond house
drawn up the law referred to it could
not have written more strongly in
| favor of the bond companies and
against the interest of the people.
This law authorizes boards of county
| commissioners of the various counties
of Kansas to issue bonds for the pur
| pose of funding the outstanding war
rants existing against said counties
| prior to January IS 1909. These
bonds shall be payable in not less
| than twenty nor more than thirty
five per cent interest. They shall be
registered by the county clerks of the
respective counties and not by the
state auditor as is the usual case with
bond issues. The last section of the
bill is the most significant, and reads
as follows:
'None of the restrictions and
limitat tions contained in any of the
statutes of the state of Kansas here
tofore enacted shall apply to or in any
way affect the issuance of the bonds
under this act or of any bonds so
issued"
This bill. which was a substitute
for house bill No. $50. was prepared
by the Judiciary local committee of
the house and rushed through on an
omnibus during the last hours of the
legislature. The Montgomery county
case is the first to attract attention
to the iniquities of this law. 1t gives
boards of county commissioners the
right to issue bonds to run for thirty
years at high rate of interest with
out any payments at all on the prin
cipal. In every case the interest will
exceed the original amount of the
d6DC ana Is. paying I1SHL lHLO llle
hands of the bond buyers. All the
restrictions and safeguards thrown
a. out the ordinary bond issue are cut
away from this issue by this law.
The bonds are to be registered by the
county clerk, so the state auditor
cannot step In and protect the county
and the people as in the case with
other bond issues
Who drew up the bill. how it came
to be passed through both houses and
I M tie c1a ri
ing noticed is impossible to under
stand at this time with the Montgom-
cry county case staring the state IN
the face The Montgomery County
Tribune commenting on the proposed
bond issue in an extra edition issued
solely to cover this case, says:
Last Wednesday evening, after the
Tribune had gone to press. Deputy
County Clerk Wadman informed us
that Commissioners Surber, McGugin
and Ashby had decided to issue $780,
600 refunding bonds
1.-THE law under which it was order
ed passed by the last legislature Is
published elsewhere.
s'In this article we are not accusing
the commissioners of Intentional error,
only error in acting in too great haste
We have great confidence In the hon.
esty of the board of commissioners, but
do think they. in trying to save ~ per
cent interest would lie up the county
with endless debt.
s0The board reports the county war
rant debt to be $26o,ooo, at per cent
interest.
These bonds must run TOT ~ years anu
not over so years.
Experience and practical business
show that such an issue of bonds is not
| Just to the taxpayers.
sITnder the law there will have to be
q. sinking fund of 100000 raised in 20
years. of 100000 in 25 years and of the
| second 100000 in 30 years. This sink
ing fund means collecting the tax and
niIing il up to be deposited in bank at
| ; per cent, while paying AZ per cent on
! the bonds, or loss or per cent oi
"a better way is. don't issue the
bonds now wait two years until the
county can get legislation to pay on
mart of the bonds every year.
| "Iudependence city and school dis
trict issued their Az and per cent
| honds payable part each year. which
| sold at a premium. Montgomery coun-
! tv never defaulted interest or premium
| and its bonds are as good as govern
pay interest and So 600 to $4,000 ever
year. or more after ten years. and the
| taxnavers can save 100000 in interest.
| ..V-heu the bonds are issued advertise
tber,, for sixty to ninety days; notify
ali the bond buying brokers so as to
! Oct competition and premium Ar
| range the letting of contracts so that
| sycamore. Cherokee and Parker town
/ ships and any executor. administrator.
| or any citizen of the county can buy
! $500 10 $1,000 bonds or more and leave
g. mich Interest as possible at home
| ..-The law was omnibussed through
| the legislature in the closing hours
| Of the session, without members hav-
/ ing time TO consider or discuss il, and
| is in favor of bond buying firms The
commissioners acted under this law.
/ 1t is bad law"