Reminiscences of a. Wayfarer
Some of the Important Events of the Pioneer Days
of Richardson County and Southeast Nebraska, as
remembered by the writer, who has spent fifty
one years here.
KAI.I.> t ITY’S MI'MCII’M. HONIlS
When 1 determined to write
my recollections of people and
events in the early days. I in
tended to confine myself to the
territorial period of Nebraska
history, and close with the ad
mission of the state into the
Union and its habilitation as an
independent political autonomy,
which was not complete until
the close of the tirst session of
the legislature under the con- j
stitution, which met at Lincoln, j
the new capital, in the winter!
of IrttMl.
A circumstance, which will
sufficiently appear as this paper
progresses, has induced me to
make a slight alteration of my
original plans and in this in-!
stance to write of some matters'
of public interest that occurred
a few years after Nebraska had
ceased to be a territory, and to
which public attention has been]
called by a recent publication in
one of our local newspapers,
it is from the pen of Mr. A.
R. Keim. who has passed at
least forty years of his life in
Falls City, and as lie is not
probably much above the age of
fifty, his residence here covers
therefore, the greater part of
his earthly existence. The sub
ject of his editorial in the Falls
City Journal, of which I am in
formed he is editor, of the date
of May ltitli, instant, was cer
tain municipal bonds alleged to
have been issued by the city of
Falls (’ity about thirty si \ years
ago, to assist in building our
present county court house; and
cejtain bonds of the school dis
trict, in which Falls Uitv was
then, and yet is, located, upon
which to procure money to biuld
a school house, and which were
issued two years after the court
house bonds were issued and
put on the market.
The issue of those bonds and
the circumstances attending the
transactions from their ineep
tion, and what followed, are en
tirely consonant with my gen
eral purpose in writing these
reminiscenses, a n d t h o u g h
events of a time 1 did not e.\
pect to write about, I embrace
this opportunity to give to the
public the real and indisputable
facts concerning them, which
]Ur. Keim has not done.
The editorial 1 refer to com
*
mences thus:
“Falls City has an easy fash
ion of voting bonds and also a
convenient way of repudiating
them.”
This statement has not the
slightest foundation in fact, and
it is the purpose id' this article
to make that plain to the “new
comers in town and some young
people”(1 use Keim'sown words!
“who have grown up who have
never heard<d our escapades in
that respect." It is not a com
mendable bird that will foul its
own nest, and even if what he
has written about Falls’ City
were true, which it is not, it
comes with a bad grace from
one like himself, who has passed
most of his life in the town, and
whose father and uncle were
among the most influential busi
ness men in the city at the time
the bonds lie mentioned were
issued, and were the active fin
ancial agents in the disburse
ment of the funds received from
their sale in furtherance of the
enterprises they were intended
to promote, to make a wholesale
charge of dishonesty against
the people of the town including
his own flesh and blood. But
that aside I make a further quo
tation from his editorial of
the 19th:
“This is ancient history and
the story no doubt will be fully
and interestingly told by the
‘Wayfarer.’ ’
Whether interestingly told or
not, I accept the task, and wil
proceed to give the /arts as i
know them to exist, and which
others in Falls City at this mo
ment, know quite as well, to lie
named as I proceed.
At the session of the legisla
ture in the winter of 1*75, an
act was passed authorizing
“Falls City precinct to issue
bonds to aid in the construction
of a court house for Richardson
county” in the sum of $15,000.
That act was prepared by Mr.
E. S. Towle, who was a mem
her of that legislature, and
passed into a law through his
active exertions. Mr. Keim is
tolerably correct when he said
that the object of the law was
to permanently locate the coun
ty seat at Falls City, and end
the long drawn out tight, which
had disturbed the peace and
quiet ol the people for more than
fifteen years I was not in the
country at the time, but Towle
informs me that he introduced
and passed that act at the ear
nest solicitation of all the busi
ness men in Falls City, includ
ing tht' proprietors of The Falls
City Rank, Mr. C. K. Keim and
Mr. H. R. (irable, father and
uncle of A. R. Keim, our city’s
present critic. The bonds were
issued accordingly and sold in
the market, and 1 am told by
Mr. John Hinton, who was also
a banker in the town at the
time, that the money was dis
bursed through the Keim and
(Irable bank, gentlemen who
were as anxious to promote the
Welfare of the city as any two
men who ever lived in it. In
the course of a year and a half
perhaps, the court house was
completed and formally pre
seated to the county and the ap
parently interminable struggle
over the county seal question
was in fact ended forever.
Matters stood in that attitude
till the 2nd day of duly, 1 "77.
when an action was commenced
in tin1 district court of our coun
ty by dudge K. S. Dundy, an ex
tensive property owner in Falls
City precinct, against Diehard
son county, to enjoin the collec
tion of certain taxes that were
alleged to have been illegally
levied, among which was the
tax to pay interest on the court
house bonds.
1 have the record ol that case
before me, and besides 1 was at
torney for the plaintiff and my
knowledge of what was done
therein is full and complete. < hi
the hearing in the lower court
the contention of the plaintiff as
to certain matters of tax, was
sustained, but as to the court
house bond tax, his bill was dis
missed. From that decree an
appeal was taken to the supreme
court, where it was very fully
argued on both sides, and on
the 22ml day of April, I'-Td, an
opinion was handed down by
the court sustaining the district
court in all its ruling in the case,
except as to the court house
bond tax, and as to that the de
vision below was reversed, the
tax held illegal and the bonds
issued by the precinct absolute
IV void, and for the following'
reason I quote from the opinion
of the court speaking bv Judge
Maxwell:
“The court house tax was
levied for the payment of the
bonds issued under a special act
ol the legislature, approved
February 14, l"7o. “to authorize
Falls City precinct to issue
bonds to aid in the construction
of a court house for Richardson
County.”
Have such bonds any validity
under our constitution? Sec.
1, Art. VIII of the constitution
of 1S67, prohibited the legisla
ture from passing any special
act conferring corporate pow
ers. This being the case, the
act in question conferred no
authority whatever to issue the
bonds in question, and they
were absolutely void in whom
soever hands they may be."
That was all the litigation
that was ever had over these
bonds. The validity of the tax
levied to pay interest on them
was not attacked by Falls City,
or by Falls City precinct, but
by a taxpayer. He had a ri^lit
to do so, and the court had jur
isdiction to decide the point.
Of course that decision did
not bind tile holder of the bonds
for he was not a party to the
suit, and besides the bond bold
er bad a double remedy, for if
the bonds were void for the want
of power in the municipality to
issue them, he could throw them
aside and proceed against the
municipality as for money had
and received, and the courts
have uniformly in all proper
cases allowed a recovery.
V old bonds cannot be issued,
money obtained by a sale of
them and the money kept by the
municipality simply because
the bonds are uninforcible as
valid securities. The bonds are
not the debt, but only the evi
deuces of thedebt. Nosuit was
ever brought on the bonds
against Falls City precinct, or
against any other corporate en
tity, nor was any action insti
tuted for the money obtained
from their sale.
The holder of the bonds is
alone to blatne for the non-at
tempt to enforce the obligation
of Falls City precinct to repay
the money it had received from
the sale of its void court house
bonds. The right of action to
enforce that obligation became,
barred by the statute of limita
tions by such delay of the bond
holder, and that is all there is
of it. Nobody repudiated any-;
thing, nor could it be done by
anybody, or corporate munici
pality. It is a thing impossible
iii our government.
Now as to the school bonds
issued t wo years laterunder an
other spe cial act of the* legisla
ture empowering School Dis
trict r>r>, the one in which Fails
City was and is yet located. 1
l.a'. e conferred with Mr. .1. K.
( am. Sr., who was a member of
the school board at the time,
and he- remembers the.facts sub
stantially as 1 do. Bonds to the
amount of s?:M,ooo were issued
by the school district under the
authority of the special act
above mentioned, and a contract
let to .1. B. Burbank to build
the school house. The bonds
were in the Falls City Bank.
This was sometime in the year
l"7f>, probably about mid sum
mer. Before the school board
could negotiate a sale, it was
discovered that there was some
doubt as to their legal validity,
and talk of an injunction pro
ceeding to prevent their sale
was rife on the street. This
somehow came to the knowledg
ot the contractor, Burbank, and
by some means unknown to me,
and Mr. Gainsays was unknown
to him and the other numbers
of the school board, Burbank
procured possession of the bonds
from the bank, spirited them
away to St. Joseph, Missouri,
and sold them, but for what
price nobody, T think, but him
self in Falls City, ever knew.
This gave fraudulent currency
of those securities in the mar
ket. The board was powerless.
The contract was already let
and the bonds were sold. A
strong pressure was brought on
the board to 'let matters pro
ceed. The country had been
eaten up by grasshoppers, the
people were idle, and no pros
pects ahead. In that state of
public necessity it was urged
that the expenditure of fifteen
or twenty thousand doll a r s
among the people for material
and labor would be a godsend to j
the community and the argu
ment prevailed. Later, when it
was ascertained that the build
ing was built in a flimsy and tin.
substantial manner, some of the
board rebelled, and all were dis
satisfied. Mr. Robert Clegg, a
member of the school board,now
deceased, but who is remem
bered by our people as one of
our most active men of affairs,
was determined to probe the
whole business to the bottom.
He had become convinced that
the bonds were void, aad that
the school district had been
swindled in their sale; and be
sides he didn't like the house
Murbank had built, and he set
on foot a scheme of his own to
have an adjustment of matters
between the bondholders and
the school district, on a basis
of equality and fair dealing. To
that end he purchased one of
the detached coupons from a
school bond and brought suit
on it in the district court
against the school district. It
was intended as a test case.
The court held that the coupon
and the bond from which it had
been detached were void for the
reason that the act under which
they were issued conferred cor
porate power on the school dis
trict against the express prohi
bition of the constitution. In
order to have an authoritative
judicial expression on the sub
ject, Mr. Clegg carried the case
to the Supreme court, where the,
judgment below was affirmed.
That case is reported in Volume
s, Nebraska reports, at page
17s. The Dundy case against
Richardson county is reported
in the same volume at page 50b.
The school board was then in
position to talk to the holders
of the bonds and said to them
substantially this: “The bonds
are legally void, but we don’t
want something for nothing, we
are willing to pay you what the
school house is worth.” And
•
' "M — I ■ nraiww IM
they did, and it was received in
full acquittance of the obliga
tion.
It is proper to say that a like
holding on the question of Ille
gality of the school bonds was
had in the Untied States Cir- (
cuit Court at Omaha, a short
time before and which was later
affirmed by the United States
Supreme Court at Washington.
Clegg wanted a decision by
our own Supreme Court.
It will thus be seen that there
was no repudiation by Falls
City, or by any other corpora
tion, of either bonds or debts,
and besides Falls City did not
issue any of those bonds. As
the holders of the precinct court
house bonds never made any ef
fort to enforce them, or to re
cover the money uaid for their
purchase, it is impossible now
to say whether the court would
have allowed a recovery as for
money had and received. There
was already authority in the In
ternai Improvement act or lHt><), ^
for a precinct to issue bonds to
aid in works of internal improve
ments—and our supreme court
lias decided that a court house
is such a work—but it required
a vote of the people, while this
one did not. It is not profitable
to speculate as to probabilities
The bondholders never put the
matter to a test and that, as
one William Shakespeare once
said, is the end of the heart
ache.
It should be remembered that
a people or a community has its
life precisely like its component
individuals, and that this ap
prepate life is as much an indi
vidualitv, as thouph the whole
mass, great or small, were a
single person, and may be made
the subject of detraction and
unfriendly criticism in the same
way.
In any case, the censor of the
public morality should be cei
tain of bis facts before he
charges business immorality on
a whole community.
_cl
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