Finney Bond Scandal

In 1933, on the 5th floor of the Jayhawk Hotel in Ronald Finney’s suite, a separated by a few floors from the saintly Senator Capper’s suite, transpired a $1.25 million-dollar bond scandal that rocked the state from its smug foundations.  

 Finney County was renamed in 1883 after prominent businessman and politician, Lt. Gov. David W. Finney.  Synonymous with success through ownership of utilities and banks the Finney family were known state wide for their philanthropy and rubbing elbows with the elite.  Ronald Finney lived a Gatsbyesque life of lavish country club parties, lobster and bootlegger’s liquor. He began by kiting checks between his father’s banks in order to cover bad loans, and making legitimate profits in the commodities market but as the elixir of money set in he began forging municipal and school bonds which lead to when uncovered caused Governor Landon putting Topeka under martial law and armed guards at the state treasury, while the 

Where They Lived….

The reporters who broke the story---

Al Schultz (“Dutch”) the reporter for the Topeka State Journal, he wrote the column “Kansas Political Gossip”-- lived at the Hotel Kansan.  Built in 1923, the Kansan Hotel was designed by Shepard and Wiser of Kansas City and cost over $1 million to build.  The Purple Cow coffee shop and the roof garden dining room were popular eating spots.

Cliff Stratton—2012 Bolles Ave which became Washburn sometime after 1910 (This is owned by Jean Ryan, an acquaintance of mine, she used to work at the zoo, nice bungalow) was a reporter for the Capital Journal.  A political writer and columnist, Stratton, the Washington correspondent for the Capital from 1926 to 1956.  Writing for the Capital for over 40 years, Stratton authored the column, “Clif Stratton Writes” and for numerous magazines for Capper Publishing including, the Kansas Farmer, Missouri Ruralist and the Ohio Farmer, he was also a columnist for the Chester PA Times, and for the Trade Union Courier from Ohio.

Owned by Senator Capper, the Capitol was considered to be prim and proper, it would lead the press in outrage and column space about the bond scandal.

Charley Trapp of the Pink Rag wrote of Sally Rand, Doc Brinkley, and Ronald Finney “Sallie cashed in on her cuticle, Doc sold got epidermis a fabulous charge but Ronald took the hides of suckers…I’m proud of Kansas, always she’s the forefront. Any other state would have been content with one set of forged bonds.”  (August 11th and November 3rd, 1933)—1029 Madison

The Clean Up crew:

H W Koeneke—1205 Mulvane—Kansas Bank Commissioner

D A N Chase—State budget director—Kansan hotel

A R Jones—State Accountant—Senate apts.

William Jardine—former U. S. Secretary of Agriculture in 1925 under President Calvin Coolidge then under Hoover minister to Egypt, Jardine was selected by Gov. Landon to be the acting Treasurer from October of 1933 to March 1934 (when he became president of WSU) .  He immediately fired everyone In the office and rehired, reopening the treasury office on October 26th (Smith, 58) he recommended a number of changes to the Treasurer’s office that were never implemented because although they sounded good the legislature thought that they would require additional money.  This is who the USD 501 middle school is named after.

CL Thomas—1334 Tyler

Thomas was the National Guard Officer living in Topeka that Governor Landon summoned to guard the Treasury office when he put it under martial law in order to have federal and state examiners allowed in to audit the Treasurer’s office against State Treasurer Tom Boyd’s protest.

Implicated:

Ronald Finney—5th floor suite Jayhawk Hotel—The Kingfisher--citizenship pardon given by Governor Carlson in 1949.  The Jayhawk Hotels was one of the finest hotels in the state and due to its proximity to the state Capitol and it’s reputation for hospitality it was a highly sought after.  Groucho Marx, Gypsy Rose Lee, Sally Rand, Bing Crosby and others were known to have stayed there.  U. S. Senator Capper split his time in Washington DC and lived in the Jayhawk until his death in 1951. Designed by Thomas W. Williamson, who is best known for his design of Topeka High School. 

Leland Caldwell—Caldwell worked for Finney, doing everything from laying out the clothes he was to wear to buying fake seals under an assumed name. (RBS p. 208)

Charles Cook—in charge of the bond department at the National Bank who had let Finney buy $60,000 in US Treasury bonds with a like amount of KS municipal bonds on a repurchase agreement rather than for cash.  (Smith pg 48)

Thomas Boyd—State Treasurer—1926 Bolles (Washburn Ave) (gone turned into 1960s/70s apartments) Boyd gave Finney a check drawn on public funds to cover a bank loan, Boyd also gave Finney access to the treasury vault, enabling Finney to steal bonds and replace them with forgeries.  Boyd received several personal checks from Finney. Boyd stood trial and was found guilty and given 4 to 10 years.

Boyd was freed in September and facing almost certain impeachment he resigned effective October 1st, 1933.

As state treasurer, it was in his custody that the bonds owned by the State School Fund were placed.  He was the custodian for the securities delivered to him by the state bank and trust companies. And it was his responsibility it was to protect the state form loss on state funds deposited with these banks.

Ronald Boynton—Attorney General—338 Woodlawn

A cousin of William Allen White.  As AG, Boynton approved state purchases from Finney, often paying more than the asking price on local bonds. Impeached by the Kansas House but the Senate failed to convict so he served out his term in office.

A member of the School Fund Commission, his office approved jointly with the state treasurer securities put up by banks and trust companies to protect state deposits to protect state deposits. 

Mr Boynton lived at until July of 1938 when the property was sold to a straw buyer representing Clif Stratton—one of the reporters that broke the bond scandal.  Mr. Stratton’s granddaughter, Joanna would later find her grandmother, Lila Day Monroe’s collection of memoirs and stories of early Kansas women in the attic of this house and would publish them in the early 1980s as Pioneer Women.

William J. French—1029 Billard Blvd.,

As state auditor, French was a member of the state treasury board that steered deposits to Finney’s banks.  French was also impeached by the House but the Senate did not convict him either and he also continued in office until the end of his term.

As state auditor, French registered every municipal bond in Kansas and is whose signature appears on all municipal bonds, whether it is sold to the School Fund Commission or placed on the market.  And  is a member of the Treasury Board. (TCJ Aug 9, pg 1)

The Lawyers

Sardius Brewster— KS Attorney General from 1915 to 1919 and U. S. District Attorney from 1930 to 1934.  It was Brewster who notified Governor Landon on August 8th of Finney’s bond forgeries.  Brewster would later be put in charge of prosecuting Finney along with Lester Goodell.  Known for his prosecution of prohibition violators, he had a leonine mane and recited Shakespeare, and the classics in Latin and Greek verbatim, Brewster was a larger than life Dutch Shultz said of him “Eating breakfast with a gizzly is a joy, as compared with being on the opposite side of a rough and tumble lawsuit with Brewster.”  (RBS p. 196)—1539 W 16th--  

Dan Cowle—asst. to Brewster

A.S. Foulkes—patrole attr, legal advisor to Gov. Landon—1211 Western

Lester Goodell—Shawnee Co. Attr.—1620 Grove

Paul Heinz—attr. Rep Finney, but during the process of the investigation and trial was appointed to a judgeship by Gov. Landon—2424 Pennsylvania, built in the late 1880s this is one of the five model homes built by J.K. Husdon when developing the Highland Park neighborhood.

Tinkham Veale—Tom Boyd’s attorney residence 1535 Pembroke; office 900 block of Kansas

John Hamilton—Finney’s attourney  before the scandal—1616 Boswell

Ralph O’neil—315 Woodlawn/Washington DC; “Dyke” O’Neil, a well-connected Democrat, was Roland Finney’s Washington contact man.  Reading the Washington papers and giving Finney news that might be pertinent to the market. (Finney also had men in London, Chicago and Philadelphia doing the same thing) There was never any evidence to indicate that O’Neil had any knowledge or involvement in the bond forging business.

John Schneck—Schneck would represent the Finney’s in both the Lyon and Shawnee County trials, office in the National Bank Bldg; 1206 ??

W.C. Ralston—bond attorney in Boynton’s office (AG)—1289 West

Leon Lundblade—one of Tom Boyd’s attorneys

Homer Cunningham

Witness for the Prosecution

Bernice Long—1311 SW 11th

The treasury bond clerk at the Treasurer’s office. Her testimony on how Finney and Boyd removed Eureka depository bonds to Chicago was damning.  (Smith, p. 48)

The Politicians

Governor Alf Landon—Governor’s mansion at 8th and Lincoln; Chairman of the Treasury Board which approves bonds to protect state deposits.

Arthur Capper—Owner of WIBW, the State Journal, former Gov, US Senator—residence at the Jayhawk Hotel and in the Mayflower Hotel in DC

Frank J. Ryan—Secr. Of State,  chairman of the School Fund Commission, and member of the Treasury Board –108 W Courtland

W.T. Markham—Superintendent of Public Instruction and ex-officio  Secretary of the School Fund Commission—1217 Western

Who Started it All

MB Gurley—a Topeka bond dealer who was offered bonds from school district #92 and the Eureka school district (August 9th, TC,pg 1)  and called the bond clerk in the state auditor’s office and were told that those bonds belong to the state School Fund.  He then alerted U.S. attorney’s office. 

E. F. “Jack” Allen and Mark Rooney—national bank examiners on a routine examination of the National Bank of Topeka.

The National Bank of Topeka—where the fraudulent bonds were held.