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Friday, April 20, 2012

WOLF AMONGST THE FLOCK

I don't know of any better way to describe Ronald Finney, than to say he was a man susceptible to temptation. He had the advantage of being raised in the “Prairie Hay Capital of the World,” the flat-lands of Woodson county, Kansas, where temptations were few and far between. If you sought more drama than the wheat fields offered, or a little “cultural stimulation”, you had to travel the 100 miles due south to Tulsa, or 50 miles due north to Topeka, or the 60 miles due west to Wichita. Certainly Neosho Falls, the counties' largest town, must have had a seedy side, but with less than 20,000 citizens in 1900, most of whom worked for the Atchison, Topeka & Santa Fe Railroad, the local cast available for seductions was limited indeed. Yes, Ronald was lucky to be born into a region that prided itself on its lack of temptation. But Ronald had the disadvantage to be the son of Warren W. Finney, who was perfectly capable of generating all the temptation his son would ever need.
W.W. Finney was a man of vision and ambition. Just after dropping out of college, in 1895, he had organized the Neosho Falls Telephone Company. By the turn of the century W.W. had gotten married (to Mabel Tucker), produced a son and heir (Ronald) and a daughter (Mary Jane), had been elected mayor of Neosho Falls (above) and to one term in the state legislature, and had risen to a position of leadership in the local Congregational Church. Then in 1905, W.W. sold his Neosho phone company and bought another in Emporia, Kansas, Lyon county. Moving to that town, by 1920, he had pieced together a conglomeration of small community telephone companies, and had achieved such success that he could afford to make the mistake of starting to buy banks.
First there was the Farmers State Bank at Neosho Falls, then the Neosho Falls State Bank, and then the Fidelity State and Savings Bank at Emporia and finally the Bank of Eureka, Kansas. The banks gave W.W. access to foreclosures, which allowed him to become a gentleman farmer, stocking his expanding acreage with prize cattle and breeding horses. He even acquired a few oil wells in the nearby Flint Hills, which led to an endless string of fast cars. His parties in the family's 25 room mansion outside of Emporia or at the Emporia Country Club became legendary - at least in rural Kansas. Attendees included a veritable who's-who of Kansas politicians and power brokers. And W.W.'s life became even more perfect in 1921, when, at the age of 21, Ronald graduated from Cornell University, and went to work in his father's banks.
Ronald Finney worked at various posts for his father for most of the decade. And if there were rumors that he was not the brightest penny in the bunch, he was a hard worker, and like his father he was known about Lyon county as a “swell”. It was after all the “roaring twenties”, and although Kansas had inspired national prohibition, the whole country had merely traded alcohol intoxication for getting drunk on paper profits; Kansas too. And so it was to be expected that in 1928 young Ronald (he was now 30) would approach his father with a request. Could he see what he could make with the banks' bond business? After all, Ronald was not selling high flying risky corporate bonds, but dull practical municipal bonds, for schools and city water systems and hospitals and city offices. Daddy said yes. How could he have said no?
In 1928 Ronald opened an office in a suit at the Jayhawk Hotel in the state capital of Topeka, to tend to his contacts with the state's political structure. And his hard work backing, buying and selling bonds paid off very well. Back in Emporia he built his own mansion, complete with a lighted tennis court. He collected fast cars, just like W.W., but then Ronald went his father one better by buying an airplane. On one of his farms he raised Arabian thoroughbreds. He did so well, he hardly noticed the depression that was gripping the country.
In one of his schemes, Ronald invested in bonds for Hinsdale county, Colorado. Why Ronald chose to invest in this isolated, inaccessible unpopulated mining region deep in the Rocky Mountains was never clear, but he urged his friends and business partners to follow his example. He built luxury cabins in the midst of an abandoned mining camp, and talked about the place as an exclusive resort. But in 1933 Colorado authorities charged Ronald and several members of the county government with fraud. It seemed Ronald had bought up the counties' bonds at a discount, paying as little as thirty cents on the dollar, expecting to sell them back to the county at full face value. A trial date was set for April 11, 1934. But that was in Colorado, where morality was well known to be compromised by greed. It was so unlike the good solid bedrock business practices of dependably boring Kansas.
In early August, as the part of Roosevelt's New Deal regulation of the nation's banking system, a Federal bank examiner descended upon the National Bank of Topeka, Kansas. There he found something odd in the numbers for the Kansas State School Fund Commission. They did not add up. The examiner notified the U.S. District Attorney, who called up the State Treasurer Tom Boyd, and asked if he could please physically examine the School bonds held in the State's vaults. To his surprise, Mr. Boyd said no. Doing the politically correct thing, the D.A. notified the Kansas Governor, and Tom Boyd's boss, Republican Alf Landon. Governor Landon immediately issued an executive order opening the vaults for the Federal examiners.
It took them less than forty minutes to find the bonds in question – twice. The first set were in the files, where they were supposed to be. The second set, clear forgeries and copies of the first, were stacked near the door; $329,000 worth of bonds, twice. Eventually the total of forged copies and real bonds used as collateral for  bank loans, would be figured at $840,000. Jumping to the logical conclusion, Governor Landon ordered the Kansas National Guard to take possession of the vault. Then he ordered the immediate arrest of Treasurer Tom Boyd, and the man who had sold both sets of bonds for the state, originals and forgeries -  Ronald Finney.
Ronald turned himself over to police in the state capital the next day. He was driven to Topeka by W.W., who insisted his son was honest. The patriarch told reporters “His transactions from the first of the year showed a profit in excess of $200,000, according to information given me by his auditors.” The old businessman told Governor Landon, “I am not going to let (my) bank be closed. I have run it for 20 years.” The Governor sent the old man back home to Emporia, with several state bank examiners in tow.
This time it took a little longer, but by morning examiners at the Fidelity State and Savings Bank had discovered another $600,000 in fake state and municipal bonds. One set had been handed over to the state to hold as collateral for loans to the bank, while the second, forged set, signed by one sad sack employee, Leland Caldwell, were handed over to a Chicago brokerage house as collateral for even more loans. As long as the bonds were never sold, the were never reported, and nobody had noticed there were two of each of them, until now. In fact, just weeks earlier, Ronald had told Tom Boyd the truth, or part of it anyway. But instead of turning him in, Boyd had handed Roland a state check for $150,000, to cover his accounts and avoid a collapse. The total fraud reached $1.5 million in 1934 - equal to $250 million today. It was impressive scam for a couple of hay seeds, not versed in the moral laxity required to be a big city politician. Said W.W., “I am heart broken.”
Three banks were closed because of the scandal. A Chicago brokerage house went bankrupt. And in  Kansas' moral vision of the universe, someone had to pay. Both Attorney General Boyd and State Auditor Will French, were impeached. The state Senate failed to convict either of them. But AG Boyd was not so lucky before a Federal jury. He was sentenced for 4 to 10 years in Federal prison. And on November 9, 1934 W.W. was sentenced to from 36 to 600 years in prison. On the day he was supposed to begin his sentence, the old man drove out to a fishing cabin on the Neosho River and put a bullet in his brain.
Ronald cut a deal with the prosecutors for fifteen years on 31 counts. But rumor has it that the night before sentencing the judge got a phone call from Governor Alf Landon, who was up for re-election that year and was considering a run against Roosevelt in 1936. “Hammer him”, ordered Landon. The next morning Judge Paul Heinz announced he was not going along with the plea deal. “Would it make any difference as to your guilt or innocence?” he asked. Ronald responded, “My rights have been disregarded in having me plead guilty under an agreement that was not kept.” The Judge ignored his argument and sentenced Roland to from 31 to 635 years in prison.
In jail Ronald took courses in creative writing (like he needed that), and after serving just 12 years of his 635 year sentence, he was released in February of 1945. He made a comfortable living writing for trade journals and spent the last years of his life between summers in Oregon and winters in St. Petersburg, Florida. He died in the humid Gulf air of acute bronchitis and emphysema in 1961. He was 63 years old.
The last half of his life had been free from any major legal or moral transgression. And half a good life is a reasonable achievement for a human being so susceptible to temptation.
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