The Cadiz Democratic sentinel. [volume] (Cadiz, Ohio) 1854-1864, 1857-08-27
Add balance in Treasury
Nov, Is, 1856.
579,5I7 55
s3,459,g7l Sc


HotiOuhA ANOuu f9t II
--'2 .683, ,53l IS
cash balance in Treasury
June l3, 1851, per Au-
dit's books. ,l40 4
In order to ascertain from the above state
ment the true amount of the defalcatOn, and
reconcile the discrepancies between the accounts
Of the Auditor an Treasurer, it is necessary tc
add to the foregoing balance S13, 127 %, due
repositories, and S67, 900 81 belonging to Cana
Bank of Cleveland This would swell the bal
ancc to 1856 2G8 O3. From this should be de-
Quoted S104, 143 10, the amount of assets in
the Treasury on the 18th Of June, leaving a
balance of 1852, 124 "a which is S23, 3,374 G3
greater than the balance shown by the books ol
the Treasurer. This discrepancy is accounted
for by the fact that the Treasurer has credited
himself with the payment of exchange, &C., to
that amount, of which the Auditor has no ac-
count, and which cannot be allowed without
legislative action
How long has this deficit existed? To this
question, the books of the office furnish no an
swer. 1t is not to be expected that they would
throw any light on the subject. Offenders do
not voluntarily furnish evidence of their guilt,
or make a record of their crimes
The facts and circumstances disclosed by the
witnesses who have appeared before us, and
whose testimony will be fully examined in an
other place, in the opinion Of the undersigned,
clearly show that the defalcation is not of re-
cent date.
We have said in a former page Of the Report,
that there is no doubt that the balance called
for by the books Of the Auditor and Treasurer
was in the Treasury, at two different times du-
ring the past year. We have just expressed
the opinion that the deficit has existed for a
long time prior to the examination made by the
Joint Committee and by the Auditor of State
How then, was the late Treasurer enabled to
produce the money or its equivalent to these
different examiners? Whence were the funds
procured to supply the deficiency, and conceal
the defalcation? The explanation is furnished
by Mr.. Mr.. Gibson's deposition.
The examination by the Joint Committee and
by the Auditor of State were made early in
December. Prior to this date the Auditor had
issued to the Treasurer of State drafts on the
County Treasurers, payable on the 24th of De-
cember. under the provisions Of the act of 1856,
for the purpose of meeting the January interest
on the foreign debt. Of course, the Treasurer
could not properly be charged with the amount
of these drafts, until they were cashed by the
drawees. Mr.. Gibson, however, in some in
stances, sent notices of the fact that he held
such drafts to the County Treasure1s, who at
once forwarded to him the whole ora portion of
the sums drawn for, he still holding the drafts.
When the Committee and the Auditor exami-
ned the Treasury, the Treasurer produced the
funds which had been paid on the drafts, to
make up the deficiency, and the drafts them
selves to show that they had not been paid.
In other instances, he sent the drafts to
Banks for collection, with the request that
certificate of deposit for the amount should be
returned to him. These certificates We're also
produced to the examiners, with statements Ell
ther express or implied that the drafts on
which they were predicated had not been paid
In this transaction, of course, there was moth
ing improper in the conduct of the Banks or of
their officers
They have innoccntly we presume, furnished
a portion of the means by which the deception
was practiced upon the several examiners. The
profits of banking depend, in great manner
upon the time which elapses between the issue
Of notes and their presentation for payment
So long as they are kept in circulation the bank
is enabled to reverse the ordinary incidents of
is, she receives instead of
paying interest upon her debts. 1t is, there
fore, a matter of Importance to every bank to
put it's notes into circulation at distance from
home or in places where they are likely to be
retained for business purposes, and not returned
for redemption. TO accomplish this object,
and to postpone the presentation of their paper,
the banks resort to many devices. The Trea-
sury of our State has been subsidiary to this
The State has been subsidized by
capital to assist in the accumulation of wealth
and the increase Of its profits. The banks have
deposited their notes with the Treasurer of
State, with the promise or understanding from
him, that they should be paid out to the cred:
itors of the State Iesiding at points remote from
the location of the bank, and the sums so de-
posted, refunded after it had been paid out
The testimony shows that large sums were
thus deposited and that frequently long time
elapsed before deposltors called on the Trcasu-
rer for their money. The Treasurer was thus
furnished with the means of deceiying the most
sagacious and asute examiners. He had the
money always on hand to exhibit, though not
, cent Of it belonged TO the State, or was prop
erly in its Treasury. Indeed the State seems
to have been in its pecuniary transactions
closely allied with these institutions Nearly
all of the taxes were paid into the Treasury
through the banks. Banks were the deposito-
ries of the State, and the creditors of the State
were paid by checks on the banks. There is
little in the correspondence of tile office for sew
sral years past to distinguish it from that of a
bank except that the writer subscribed himself
Treasurer Of State instead Of "Cashier."
For the control which the banks have exer-
cised over the public funds the Ireasurers are
not wholly responsible. The Legislature Of
The State has sanctioned and encouraged it
The act providing for the protection Of the ca
nails and the collection of tolls, require the col
ector to deposit all money received by them in
some bank designated by the Treasurer OF
State.
The act making appropriations for the year
1887, authorized the County Treasurers to make
heir payments into the State Treasury, by de-
posting the sums due the State n some neigh
boring Bank. The same provision was incor-
1orated into the incorporation bills for 184l and
IS42 The law Of 1886 that fruitful source of
in our financial administration has
the continuance of the practice up to
he present time State Treasurers have col
ected the State taxes from the banks and not
rom the County Treasurers.
Mr.. Gibson says that he resorted to borrow
ng, in order to meet the demands on the Treas
lry and conceal the deficit. II it is true that
le received but S303, 600 from Mr.. Breslin, the.
books Of the office corroborate his declaration
The balance in the Treasury, on the 18th No
yember last, was $350,54859 If Mr.. Bres.
in owed at that time $55o,000, Mr.. Gibson
must have borrowed nearly 100000
Notwithstanding the Act Of April 8th, 1856,
orbids it, the practiccd of receiving deposits
ind issuing certificates still continued, and fur
nished portion Of the funds by which the
Joint Committee and the Auditor were decei-
ycd in regard to the condition Of the Treasury.
The holder Of d draft on the Treasury, on pre-
;enting it for payment, instead of the money