New Mexico state record. (Santa Fe, N.M.) 1914-19??, 1918-07-05

(From the New Mexico Tax Review
for June: 1913. Published by the Tax
payers Association of New 'Mextco.)
Early in 1917, in fact on the second
day of the administration of Governor
Lindsey. there were presented for his
signature three bonds of the state
series &C." covering claims presented
to the board Of loan commissioners by
W. G. Kelly of Kansas City and sp
proved by them. Governor Lindsey
refused to sign the bonds and asked
Mr.. r. C. Reid to examine the alleged
evidences of the railroad indebted
ness for the refunding of which these
bonds we're issued. Mr.. Reid advised
AGAINST the issue of the bonds and
upon q partial examination of the rec
ords found that there had been paid
illegally to Mr.. Kelly on duplicated
claims the sum of $23.56636.
Following this partial audit by Mr..
Reid, Mr.. Kelly paid back $3,2S4.3s'
but failed to pay back $2O.281.9S. al
though asked to do so and although
he acknowledged the duplicate pay
ment.
The Governor and Mr.. Reid then
asked this Association to make CON-
plete audit Of the issue of stats bonds
OF series CO.. These bonds we're is-
sued to refund all the old bonds Of
Santa Fe County issued in aid of rail.
roads The history of these bonds 10
interesting especially as bearin;, upon
the folly of heavy bond issues hoped
or expected to Improve" new and
progressive community.
santa Fe County in 1880 and 1887
and Grant County in 1883 issued
bonds in aid OF railroad construction.
Although held valid in the state
courts these bonds were held invalid
by the U. S. Supreme Court and San
tA Fe County refused to pay either
principal or interest on the two is.
sues of $150.000 each which it had
made. In 1897 Congress validated the
bonds of 1883 OF Grant county and
bond issues of Santa Fe county OF
1891 and 1892 which refunded the
original cGuuty railroad debt.
Santa Fe county continued to de-
fault In its interest not only on the
railroad bonds but on all others and
the debt grew as the interest piled up.
Interest accumulated on the defaulted
interest aud it became apparent that
the county never could hope to pay
out without oppressive taxation.
Under these circumstances Con-
gress granted the state in the ena-
bling act one million acres OF land
upon condition that the state assume
and pay the railroad debt OF Grant
and Santa Fe counties and provided
that any balance remaining from the
proceeds OF these lands after payins
these debts should 60 to the common
school permanent fund and Congress
also stipulated that only debts valid
and subsisting" on June 20, 1910.
should be paid by the state and re-
served the right to see that the trust
was properly administered.
The state Legislature in 1912 Great
cd . state loan commission consisting
Of the auditor. treasurer and attorney
general. charged with the duty to as
oertain the railroad debt Of Grant and
Santa Fe counties and to refund this
debt and the accrued and unpaid in
tsrest with new bonds known -
bonds OF Series c, these and the in
terest thereon to be paid from the pro-
sseds Of the million acres Of land
granted to the state.
. TO make q complete audit 1t was
uscessary to trace the original issue
.ef railroad bonds, to follow the suits
sspon interest coupons from these
bonds which followed the default OF
the county. to trace the bonds and
judgments on the coupons through the
.rsfunding process in 1891 and 1899
end to trace the payment of interest.
court judgments thereon and finally
the issue of series &C" bonds for cou-
pons, judgments and bonds BY the
board Of loan commissioners.
In the beginning it was found that
In various ways interest coupons and
even many court papers had disap-
peared from the court files of Santa
Ts county. Why or how this happened
cannot now be told as the information
will be Of service in several criminal
actions now pending. 1t was necessary
to supply this missing Information.
without a correct list of the interest
coupons upon which numerous judg-
ments were based it was obviously i'm
possible to tell whether coupons later
submitted for refunding represented
lawful claim against the state. Ex-
cept in one case now being investigat-
cd the information was finally So
cured. Although the District Court
records were missing the Supreme
Court records were not where cases
had been appealed. Copies of cou-
pons and of complaints we're found in
the hands of the plaintiffs or their at
torneys.
When this information had been as
sembled the records of the board of
loan commissioners, consisting of the
state auditor, the treasurer and the
attorney general were examined COW
ering the period from statehood to De
cember IA. 1916. 1t was during this
period that all bonds of series &C"
were issued.
One of the pleasing features Of the
examination was the unusually COM
plete record kept by Santa Fe county
of the proceedings of the board Of
county commissioners during the per
iod these railroad bonds were being
issued and refunded and the excellent
bond register kept at that time BY the