The spirit of democracy. [volume] (Woodsfield, Ohio) 1844-1994, 1853-05-04
Violation Of the Sub Treasury Law
by Mr.. Corwin.

Violation Of the Sub Treasury Law
by Mr.. Corwin.
Some grave charges have recently been
made in the public prints against THOMAS
CoRw1N of an official violation of the Sub
Treasury law, while he was the chief finan-
cial officer Of the Government. and there.
fore bound to see that its provisions were
respected. 1t is said that he has, in direct
violation of that statute, and for purposes
which the law was expressly enacted to
prevent, been loaning the public money,
on interest, to stock spectators. taking
southern and western railroad stocks at
their face, as security. in sums exceeding
halt million of dollars at a time! thas
been urged in explanation, that Of the
$6. SOC, 900. of five per cent. stock, which
falls due in 1858, the Department has been
making purchases as far as it could obtain
the stock, and paying for it out Of the ac-
cumulated balances, and in order to do
this without exciting the market by coming
openly to it. the Department has advanced
or loaned money to a leading broker, who
purchased in his own name; that for this
purpose the specie was withdrawn from
the Government vaults and placed IN
bank to the credit of an individual, where
it remained for length of time, to the
extent of $500, 900, without interest, and
was finally returned to the Treasury vaul,
on the approaching change of Admins
tration, on the plea that the stock could
not be obtained. The Economist, a sta
tistical and financial journal published in
New York, of high character, says that
the facts in the case are as follows:
By an arrangement between Thomas
Cor~in, Secretary Of the Treasury, and
Simeon Draper, Esq, broker. of Wall
street, the latter deposited at Washington
quantity oi stocks, mostly southern and
western railroad securities. and on these
stocks the Secretary drew warrants on the
sub.treasury here to the extent of $780,
600. in favor OF Mr.. Draper. On the
change of Administration, Mr.. Draper
paid back one-half the amount, and retains
the other till the time for which he borrow.
ed expires-probably next July. 1t is sta.
ted that he obtained the face Of his secu.
rites from the treasury, and that he pays
FIVE per cent. interest. In addition to this
transaction, it is stated that John J. Palmer,
Esq. obtained similar amount in two
warrants. one of $500. 900 from the New
York sub-treasury. and one Of $2OO, 200
from the Boston sub-treasury; that, on the
request Of the Department. after the change
in Government, he returned these sums.
1t will be observed that money both here
and at Boston was paid out by the officers
on regular warrants drawn in favor of the
payee, and they had no knowledge of the
nature OF the draft. The whole matter
seems to rest entirely with Thomas Cor
win, Esq. If Mr.. Draper pays five per
CEN. say, $4,000 per annum interest, who
got the money? The 18th section Of the
sub-treasury provides as follows:
"If any one Of the said officers, or oi
those connected with the Postoffice Depart
ment. shall convert to his own use, in any
way whatever, or shall use by way OF in.
vestment in any kind Of property or mer-
chandise, or shall loan with or without in
terest. or shall deposit in any bank, or shall
exchange for other funds, except as allow
ed by this act, any portion Of the public
moneys entrusted to him for safe keeping,
disbursement, transfer, or for any other
| purpose, every such act shall be deemed
and adjudged to be an embezzlement ol
so much of the said moneys as shall be
thus taken, converted, invested, used,
loaned, deposited or exchanged. which is
hereby declared to be q felony"
The act specifies exactly howsdisburse-
ments of the public money shall be made,
and the Secretary of the Treasury has no
more right to vary the mode of payment
than the lowest clerk Of the Department
The Secretary has right to transfer the
public money only as the law directs, viz:
l.sSec. 90. To transfer moneys in the
hands Of any one depository constituted
by this act to any other depository consti-
tuted by the same.'
For the purpose OF making payments,
the Treasurer 'smay draw upon any one
Of the repositories, as he may think most
conducive to the public interest. or to the
lconsenience of the public creditors. or
both." But mo exchange Of funds shall
be made byany disbursing officer or agents
Of the Government, of any grade or de-
nomination whatsoever, or connected with
any branch OF the public service
| Now il is averred that Mr.. Thomas
Corwin did exchange drafts upon the New
York Sub. Treasury, with Mr.. Draper, for
fancy railroad securities at their face. Il
this is so, he clearly stands within the pen
atty Of the law. which inflicts five years
imprisonment for its infraction. The re-
cipients or borrowers of the money are
mot made liable. If Mr.. Draper made a
good bargain, he was not bound to give
legal advice to the counsel in the Gardiner
case in respect to money transactions
The whole Of the matter has not vet tran
spired.
| All the Assistant Treasurers are to give
bonds, and it is the duty Of the Secretary
to renew and extend these bonds from time
to time, as the accumulation OF funds NAV
require. Now il is charged that in the
face Of all these stringent provisions, sums
of $500 900 and upward, in gold, have
been absolutely taken out of the govern.
ment vaults and placed in the vaults Of a
"pet bank" and then returned to the gov.
iernment vaults.