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.
