The Placer herald., 1857-02-14
The State Treasurer.

Mr.. Catlin presented the following report:
Mr.. Speaker-The Select Committee, to
whom was referred the investigation Of the
facts connected with the alleged remittance
TO New York of the sum Of one hundred and
twenty-four thousand dollars to provide for
the payment Of the semi-annual interest due
upon the funded civil debt of the State,
falling due on tls first day of July next,
with instructions to inquire into the subject
of the failure on the part Of the State to pay
the interest which was due upon the same
debt upon the first day of July last, ask leave
to make the following
REPORT.
In matter of so much Importance to the
State, and of such grave import to the parties
concerned the Committee have been careful
10 take the testimony of all persons from
whom they supposed information could be
obtained, and to base their reflections upon
the facts thus furnished, unwilling to trust to
their own suspicious, or even to their own
Judgment, for safe guidance in searching out
the information and developing the facts
most desirable to know for the purpose of
4 the investigation.
As early as December 1855, before the
Treasurer entered upon the duties of his
office. he made a contract with the Express
and Banking House Of Wells, Fargo q Co.,
to receive and pay the semi-annual interest
upon the bonds Of the civil debt of the State,
upon the first days Of July and January of
each year during his term of Office. Under
former State Treasurers these payments had
been made by the Banking House of Palmer,
Cook 4 Co. The new Treasurer when about
to assume the duties of his trust, it is pre-
sumed, partook of the distrust which was
generally felt towards these detauting agents
The defalcation in July 1854, by which the
credit and character of the State was first
shaken, and which was wrought solely for
the purpose of allowing specializing vutures
to feed upon State credit, had received too
broad and general reprobaiion not to con-
vince him that it was advisable to cast off
the fathless agents BY whom his predecessor
been carried out by the Treasurer, when the
time for its performance arrived, new calami-
ties to State name and character would have
been prevented and what is of great, though
not equal con equcnce. great losses of money
from the Treasury would not have happened
1t is easier for the State to repair the loss of
few scores Of thousands, than to regain the
position lost by the impeachment Of her
credit. A State debt not being collectabe
bv process of law is therefore debt of
honor.
But as the sequel will show, the Treasurer,
from fatal proclivity to unite his fortunes
and that of the trust confded to him with
the house of Palmer, Cook q Co., was found
about the first of April, 1856 beseeching
Wells, Fargo & Co., to release him from his
contract with them SO far as it related to
the July interest then next accruing, and
gave as Il reason for such request that he
was unable to comply with the contract, in
as,nuch as Palmer, Cook d Co., had already
forwarded about fifty thousand dollars of the
funds designed for that purpose to New York
That Palmer. Cook d Co., should thus early
have gotten possession Of the public funds
may seem surprising to some but not to such
As have studied the intimacy between that
concern and the State Treasury for the past
four years.
In order that no repetition of this failure
should occur on the part Of the Treasurer.
Wells, Fargo d Co., soon after demanded
that their contract, which hitherto had been
verbal one, should be reduced to writing.
Accordingly, on the 18th day of April, 1856,
written contract was entered into between
the Treasurer of State and Louis McLane, jr.
agent of said house, by which the former
agreed to furnish the money, and the latter
agreed to pay the interest for the remainder
of the Treasurers official term, excepting, of
course, the then ensuing July interest, a copy
of which contract is annexed hereto.
That Palmer, Cook & Co., had failed again
in paving the July interest was not positively
known in California until the arrival of the
steamer, about the first of August. Then
the Treasurer had recourse to Wells.
Fargo Co., with whom All arrangement was
speedily made to pay the same as soon there
after as circumstances would permit and the
money withdrawn from the Treasury for that
purpose. Nothing has ever been realized
from Palmer, Cook & Co., except the sum Of
fifteen thousand dollars, by means of a draft
drawn by them upon New York, and made
use of by Wells, Fargo & Co, in paying the
interest in pursuance of the before mentioned
arrangement The balance due from them
at the present time to the Treasurer isseven
ty-three thousand five hundred and eighty
dollars, with legal interest for the space of
ten months. They have used this large
amount of the public money for that length
OF time, in their banking business and other
speculations, without encouraging any overt
act OF remonstrance or prosecution from the
public authorities, until about the first of
January last. With consideration for the
Interests of the defaulters quite inconsistent
with proper regard for the interests of the
State, the Treasurer permitted them to 90
unmolested, SO far as any coercive means
were concerned, until the last of December,
when the bonds or contracts were placed in
the hands of the Governor, who employed
attorneys to bring suit against them and