The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-31
FRAUDS In THE COMP PrROLLE6'S OFFICE.
.~~~~~O~~~-~~~>~~~~~~o~
Proceedings Of tho Investigating Committee
Testimony Of Mr. Flagg,
n &c. 20.

Testimony Of MI. Flagg,
&C., &C., 10.
me special committee appointed by the Board Of Coun-
camen investigate the alleged frauds in the Comptroers
ocs, net yesterday, in pursuance Of motion OF adjourn
ent from Friday week. At the last meeting Of the com
nitse COMPTROLLER Fagg was examined but hs testimony
being very vague and indefinite in consequence OF his
inability To examine his accounts carefully with reference
70 the frauds OF his accused clerk j. Smith, the chair
nan consented TO adjourn the proceedings until Mr. Fagg
vss IN position to make direct statement The nves
uxatou was resumed yesterday, Mr.. Genet, the chair
man. and Messrs Bckford and Crawford being present
rne first witness examined Mr. rmpson, the pre-
sent auditor of The Comproier's department
James Kmpson, sworn and examined by Mr.. Genet
@ Are YOU the Auditor Of the Comptrollers Officer A.
Yes.
@ When were you appointed9 A. In 1852
O. Were you in the office there before that9 A. Yes
- Assistant Auditor.
@ How your appointment made2 A. By the Com
mon Council
@ Is there an Assistant Auditor there now? A. Yes.
Q What time did Smith take your placer A. think
II August, 1885,
O. Did he any Of your dutiesS A. Yes the
u the trust accounts.
O. Was not that a part Of the Auditors duty2 A. It
was.
Q But more especially Of the Assistant Auditor'sP A.
More especially of the Assistants, certainly.
O. Who is the present Assistant Auditor2 A. David
Groesbeck.
Q. What Is his duty9 A. 70 audit the accounts.
Q. Do you know of any defslcatons or wrongs being
committed by Mr.. Smith A. do not, excspt by
hearsay.
Q BY hearsay onlyP A. Only by hearssy, sir.
Q. Did you examine any Of his accounsY A. No
O. You examined the accounts OF the trust department.
ss we'll those Of all the other departments, before
Smiths time, didn't your A. did.
Q po you know who appointed Smith, A. No.
Q. Nor whether he was confirmed by the Board of
Aldermen A. No.
CHARmAs-That Ia all we want OF you, Mr.. Tmpson.
rhe Chairman here stated TIA, M Esgg would be pre-
sent very shortly that he expected NJ Smith would
also be before committee but that gentleman did
appear
after few moments, Mr.. Flagg entered the room,
and his examination continued.
Mr.. GESE-Mr. Flagg, at our last examination de
SIRED know when you first discovered any defacaon
the part Of Mr. Smith. Are you able to tell now'
Nr. FIAoG-You mean any actual defalcations that !
suppose can be'proved9
CaMRMAs-I mean when you first suspicioned him.
Mr.. FIAGG-I say nothing that subject than
when here before. found that he mai money
at the Bowery Bank and notes which paid by
out come remuneration.
Q. When was this 2 A. After the examination of the
accounts of the Bowery Bank by Mr. Edmonds, and the
appointment Of Mr. Stewart receiver. 1t was Mr.. Cady
frst told me of IT,
@. So he s an employe in your Officer A. Yes; he s
Comptroller clerk office specially provided for by
the ordinance.
q What have you discovered since in the entries made
by smith, A Well, when coming out Of the office
After was here last Saturday Mr.. Cady who had been
examining, told me there was an appearance Of some
hing like alteration in Of the accounts on the
edser where the contractors accounts kept and
eve him directions about finding the corresponding
sooros and examining them; we went about the exami
ration and Monday found, supposed, a,era-
n in an abstrct Of confirmed assessments, originally
tered on book 81 500 which, with Surveyors and
her expenses, would make it about s3, 500 there ap
cared to nsore put before the q soo thus making
tsl2,soo.
O. In whose handwriting the aiterationS A. 1t
would be extremely difficult 10 tell IN a mere figure
dded in that way.
O. Was this under Smiths control9 A. The accounts
In the ledger under his CONTROL depended him
10 keep his accurately In Of contracts OF
ter thousand dollars and under payment Is not
made until they confirmed by the Common
Council all higher contracts . monthly payment
Of 70 per cent is made upon certificate Surveyor
that the Is done directed Smith 10 take all these
assessments afer they we're connrmed and enter thom
IN the bureau OF arrears they now entered, under
the new law in the tax com nssioners' once ordered
Smith to take them and open accounts with each contract
basis for the settlement OF the Su veyor account
This abstract entered IN this way and was catered
rsh, In the arst place but as suppose the figure was
subsequently, put In, converting $500 into sl2,soo.
q. When dii you 9rst give Smith directions 10 open
these accoupts7 A. When the Street Commissioner dis
puse arose after Mr. Tayiors death u, (Mr. T) used
To certify 10 these absrac himself After that took
them from the a..essment rolls
Q Was the si2,s 500 paidr A. Yes, in bonds
by the stock CLERK; Smith made memorandum Of the
ooutract and 10 whom u was assigned 1t was assigned
ry Bank and subsequently by the bank 10 Joho Ftzpa
rick, as Il 70 alleged
o In whose name was these bonds sub niiied to the
ssok clerk A. In Mr.. smiths; but directed the bonds
20 be issued
@ Have you 20. that certificate in your Officer A. Yes.
o. What IL the stock clerks nameS A. Mr.. Dykeman
o. What amount are the bondsf A. There are two for
5000 and for $780, these are i've years bonds,
ansferabe only on the books Of the olce OF
has back assigned 10 Fitzpatrick by Charles
Devlin and by him assigned 10 some brokers IN Wall
street
Q which Of the bonds was ,hs' A. One Of the s5 600
bonds
Q when did you appoint SMITH 4. think in 1855
q To what portion did you appoint himS A. Well, he
came first 9 clerk think in the bureau Of arrears
And you then transferred him 10 the position ho oc
cuped at the time Of his discharges A. Well he not
o Was there any difference between his duties In the
bureau Of and those he Afterwards performed
the time Of his dischargeS The bureau ot has
charge OF all assessments after year has elapsed he
was sent " keep those
Y You have an auditor, have you not2 A. Yes, Mr..
Tmpeon.
O. and assistant auditor A. Yes.
Ans q sh'' the '1'''''' 'D'-' not TO ORA" dr'i'''
q Dd Smith the duties OF the AUDITOR A. I'm
der nv direction he drew drafts.
O. For what reason Mr.. Flagg, did you give him that
directon9 A. Well
u Hr Freo, the reason ask is that read in the ordi
nance Of 1850
Mr. FIAGa-You mean 49
Chairman--Yes, '49. and Il provided here iha, the
auditor shall draw drafts (rcferrng 70 the ordipance)
Mr.. Fhee-i will state 70 you how that took place
When the Common Council passed what IL called the 10
per cent ordinsncethat s requiring the Comptroller
pay 20 per cent monthly estimates of work doue on
contracts $40 600 charge, the contractors interest
theso amounts made inquiries a the Street Commission
ers Department 70 whether they kept these
or not could ascertain whether they did
then directed OF the clerks who supcriniendod the
assessments-