The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-24
SUNDAY MORNING, JANUARY "a, 1858
The Alleged Defalcations In the CoInptroller's

IMPORTANT rNvEsrIs ArroN-pIscREDrrA FACTS
DEvELoPED-TEsTIAoNY OF CoxPTAoLLER FLAGd
THE INVESTIGATION TO BE CONTINUED,
An interesting investigation commsnca3 Sss:srday
The special committee Of tho Board of CAhcmen were
in attendance at the time agreed upou purpose
nqurng into the alleged dealca.ons in the ONCE Of Mr.
Flsgg Comptroller os the city revenue.
Mr. Genet, the Chairman of the committee, asked Mr..
agg he Would have any objection to give his testimony
IN re'atf<n to the subject tho committee were ap-
pointSd To investigate After replying in tho negative,
sAd being sworn he testified substantially follows in
answer to the questions Of the committee
FIAGG's TESTIMONY
am Comptroller of the city and county Of New York;
know that several errors IN money matters exist IN
Office mean Of all descriptions relating 10 ac
counts particular 10 now; is not
office where money s deposited, but collection
Office where money placed t II 10 deposited In the
treasury OF the city business simply relates 70 keep
ing accounts think some one has failed TO perform those
duties in my office that under his charge; j. B.
Smith has failed TO act upto his trust some time since
discovered this could not say exactly what tins, but
about the time of the failure Of the Bowcry Bank
IL the failure of the Bowery Bank that enabled TO
discover the fraud notes found deposited there for
large amounts and D. Smith responsible for them he
used adjust the accounts in office the person who
adjusts the accounts could arrange matters with the
contractors for different works through the city that he
might have par. of the money that paid TO them
for any work paid over again. suspect that this Is
the way the money passed from my office; several of
the vouchers that entrusted to the
OF Smith not their proper files, discover
where they cannot state whether Smith might have
made mistakes intcnte nay or not could not nd the
vouchers the time made my report; did not appre
hend anything wrong until the time the Bo very Bank
failure occurred and the disclosures connected with
made have not got far enough through to state the
particular that might have been msappied there
other persons in the Office whom suspect; Mr. Smith
Is not still there; cannot say that dismissed him
found his regard to these matters and dis
covered that his notes discounted for large amounts
after the failure Of the Bowery Bank no one would endorse
them; knew nothing regarding his correctness yet
certainty asked him something about the possession of
the amounts specified in the memorandum and he talked
about his father building cottage up at Yonkers and
other business Of his own but said nothing satisfy
me- l then began 10 suspect; this after the bank
failure and its disclosures desired that he would
give the keys Of his desk and the safe
that was in bis charge, and he did so; he
is pot in my office now; keep the keys that taken
from h m myself; he has only been in the office
twice since, and never stopped more than hour at
time he has new er cleared up the mater TO my saisfac
experienced person, with Mr. Caiy, one of my clerks,
to examine the books and papers, and discover possible
how and where the discrepancy between the accounts
ists they will also whether extra paid out
Of the Office where money brought into payments;
hope to find something that may throw light on the mys
terry think elicit better by ourselves in
the office than by getting committee 10 look the
books is difficult TO say in what way the frauds might
be perpeTaed; discovered in the Fifty seventh street
contract where fraud of 81 900 existed the money was
paid for the building of wall although such wall
specified in the contract the wall built well
built, but the paid for II the amount
what named in the contract for the entire work;
the work did not include the wal Is
not true tDat the defacaronS amount 10
5000 ooo rumored; could not mention the exact sum-
could not be ready 70 give every particular connected
with examination os the books, &c before next Friday:
cannot tell whether the city would be loss by the
deaications whether would fall upon ndividuals
will try 10 have all the information necessary by next
Friday will have what cam they have not progressed
far in the examination Of the books and papers my
office yet, for busy now closing our accounts, in
addt TO other business; the mistake about the wall
might have occurred nnocenty
At this stage Of the proceedings the Chairman adjourned
the further Investigation before the committee till next
Friday afternoon. While the examination going ON
the interest manifested by all present was intense.