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Sign up freeThe New Orleans Daily Democrat
New Orleans, Orleans County, Louisiana
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In 1878, five families in a sparsely populated area of western Kansas formed Harper County via legislation to issue and sell fraudulent bonds in eastern markets, pocketing the funds. The Kansas Supreme Court recently held no recourse for defrauded investors, as the county lacks residents and assets.
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This little settlement, conceived in 1878, a grand financial scheme: they selected a representative and sent him to Topeka to attend to its interests. This representative appeared before the Legislature and asked for the organization of their settlement into a new county to be called "Harper." The Legislature agreed to this and Harper county sprang into life the next year.
There were just enough men in the new county to hold the county offices. Office holding, however, was not the aim of these swindlers, since, although officials, there was no way of being paid salaries without taxing themselves. A better transaction offered itself-the issue of county bonds. A large county debt was created and a large issue of county bonds made at once and put upon the market in St. Louis and New York.
Of course these men succeeded in their schemes. It was impossible for outsiders to know anything of the real circumstances of the case: they saw on the map a Harper county, knew that Kansas was a rich and growing State, and bought these bonds because they were cheap. The money received for them was then divided among the five families of Harper county.
Such is a specimen of Western bonds! The case has just been decided by the Supreme Court of Kansas, which holds that there is no remedy for the unfortunate holders of these bonds. There is nobody in Harper, no property in Harper, and the bondholders must be satisfied with nothing.
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Story Details
Location
Harper County, Kansas
Event Date
1878 1879
Story Details
Five families in a small, unsettled settlement in western Kansas created Harper County through legislative action in 1878 to issue fraudulent bonds, selling them in St. Louis and New York, dividing the proceeds among themselves. The Supreme Court of Kansas recently ruled no remedy for bondholders due to lack of population and property.