Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1857-09-16
REPORT OF
I. SPARROW AND AUDITOR WRIGHT ON THE
TREASURY DEFALCATI0N.
NEGLECT OF THE DEMOCRACY WHEN
IN POWER, TO EXAMINE THE
TREASURY
Breslin gully Of tie entire en'bezzlemen
GIBSON GUILTY OF CoNCEALMENT.
ICoNCLUDED.

GIBSON GUILTY OF CoNcEALMENT.
CONCLUDED.
We have said in former part of the
report that there is no doubt that the
balance called for by the books of the
Auditor and Treasurer, was in the Treas
ury at two different times during the
past year. We have just expressed the
opinion that the deficit has existed
long time prior to the examination made
by the Joint Committee and by the Audi
tor of State. How, then, was the lac
Treasurer enabled to produce the money
or its equivalent 10 their different exami-
ners? Whence were the funds procured
to supply the deficiency, and conceal the
defaIcation? The explanations furnished
by Mr.. Gibson's deposition.
The examinations by the Joint Com
mittee and by the Auditor of State were
made early in December. Prior to this
date the Auditor has issued TO the Treas
urer of State drafts on the county Treas
urers, payable on the Gath of December,
under the provisions Of the acts Of 1856,
for the purpose of meeting the January
interest on the foreign debt. Of course
the Treasury could not properly be
charged with The amount of these drafts,
until they were cashed by the drawees.
Mr.. Gibson, however, in some instances
sent notices OF the fact that he held such
drafts to the County treasurers, who at
once forwarded to him the whole or a
portion Of the sums drawn for, he still
holding the drafts. When the Commit
tee and the Auditor examined the Treas
ury, the Treasurer produced the funds
which had been payed on the drafts, to
make up the deficiency, and the drafts
themselves 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 GER
tifcates were also produced to the ex-
aminers, with statements either express
or implied that the drafts on which they
were predicated had not been paid. In
this transaction, of course, there was
nothing improper in the condnct of the
Banks or of their officers.
They have, innocently we presume,
furnished a portion of the means by
which the deception was practised upon
the several examiners. The profits of
banking depend, in great manner. up
on the time which elapses between the
issue of notes and their presentation for
payment. So long as they are kept in cir
culation. the bank is enabled to reverse
the ordinary incidents of indebtedness
that is, she receives instead of paying
interest upon her debts. 1t is, therefore,
a matter of importance to every bank to
put its notes into circulation at a dis
tance from home, or in places where
they are likely to be retained for busi-
ness purposes, and not returned for re-
denption. To accomplish this object,
and 10 postpone the presentation of their
paper, the banks resort TO many devices.
The Treasury of our State has been
subsidiary to this puspose. 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 understand
ing from him, that they should be paid
out to the creditors of The State, resid-
ing at points remote from the location of
the bank. and the sums SO deposited,
refunded after it had been paid out
The testimony shows that large sums
were thus deposited, and that frequently
a long time elapsed before depositors
called on the Treasurer for their money.
The Treasurer was thus furnished with
the means of deceiving the most saga
cious and astute examiners. He had
the money always on hand to exhibit,
though not cent of it belonged TO the
State, or was properly in its Treasury.
Indeed, the State seems seems 10 have
been in IFS pecuniary transactions. close
Iy allied with these institutions. Nearly
all of the taxes were paid into the Treas
ury through the banks. Banks were the
deposiiors of the State, and the credit
ors of the State were paid by checks on
the banks. There is little in the CORES
pondence of the Office foi several years
past to distinguish il from that Of bank,
except that the writer subscribed him.
self Treasurer of State," instead of
"Cashier."
For the control which the banks have
exercised over the public funds, the
Treasures are not wholly responsible
The Legislature of the State has sane
toned and encouraged it. The act pro-
viding far the protection of the canals
and the collection of tolls requires the