Carrizozo outlook. [volume] (Carrizozo, N.M.) 1910-1945, 1918-07-12
The REMINDING OF THE SANTA FE
RAILROAD BONDS BY The STATE
BOARD OF LOAN COMMISSIONERS

tFrom tho New Mexico Tax Review
for June, 1918. Published by the Tax
payers Association OF New Moxioo.J
-
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. q. Kelly Of Kansas City and ap.
proved By them. Governor Lindsey
refused TO sign the bonds and asked
Mr.. X. G. Reid to examine the alleged
evidences OF the railroad indebted
ness for the %refunding OF which these
bonds were issued. Mr.. Reid advised
against the issue of the bonds and
upon IA partial examination OF the rec
ords found that there had been paid
Illegally 10 Mr.. Kelly on duplicated
claims the sym OF $23.5G0.8G.
Following this partial audit by Mr..
Reid. Mr.. Kelly paid back S3.2S4.3s.
but failed to pay back s20,2s1.9 S, al
though asked to do 40 and although
he acknowledged the duplicate pay
ment.
The Governor and Mr.. Reid then
asked this Association TO make a cop'-
plete audit of the issue Of state boz is
OF series &C.. These bonds we're is
sued to refund all the old bonds OF
Santa Re County issued in aid OF rail-
roads. The history Of these bonds 10
interesting especially az bearing upon
the folly OF heavy bord issues hoped
or expected to Improve" n new and
progressive community.
Santa Fe County in 1880 and 1887
and Grant County In 1893 issued
bonds in aid Of railroad construction.
Although hello valid In the state
courts these bonds we're held invalid
BY the U. s. Supreme Court and San
10 Fo County refused to pay either
principal or interest On the two is
sues OF sl50.O6O each which II 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 county railroad debt.
Santa Fe county continued to de-
fault In lis interest not only on the
railroad bonds but on all 9th ,rB and
the debt grew as tho interest piled up.
Interest accumulated ON the d~eiaulted
interest and Il became apparent that
the county never could hope to pay
out without oppressive taxation.
Under these circumstances Con
gress granted the state In the ona-
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 paying
these debts should 20 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
ed a state loan commission consisting
OF the auditor. treasurer and attorney
general, charged with the duty TO as
certain the railroad debt OF Grant ana
Santa Pc counties and to refund this
debt and tile accrued and unpaid in
terest with new bonds known as
bonds OF Series q, these and the in
terest thereon to be paid from the pro-
ceeds OF the million acres OF land
granted TO the state.
To make a complete audit Il was
necessary TO trace the original issue
OF railroad bonds, 20 follow the suits
upon interest coupons from these
bonds which followed the default OF
the county, to trace the bonds and
judgments on the coupons through tho
refunding process in 1891 and 1899
and to trace the payment OF interest,
court Judgments thereon and finally
the lSsue OF series "C' bonds for cou
pons, Judgments and bonds by the
board of loan commissioners.
In the beginning Il was found that
In various ways interest coupons and
even many court papers had disAp-
psared from the court files OK Santa
re county. Why or how this happened
cannot now be told as the information
will be OF service in several criminal
actions now pending. II was necessary
TO supply this missing information.
Without q correct list OF the interest
coupons upon which numerous jdde-
ments were based II was obviously i'm
possible TO tell whether later