Western Reserve chronicle. [volume] (Warren, Ohio) 1855-1921, 1858-01-06

W duu tApeuleHL OJ Tue TIOSeCuCt9
Attorney and Attorney General, was
made for his apprehension, and the char
ges were betrayed from my Contingent
fund. A correspondence was also insli-
tuted with the Federal Government at
Washington. in the hopes Of engaging
lis Intervention with the British Govern
msht. by which means alone the surren-
der Of the fugitive defalter could be OBJ
tanned. The Federal authorities, how
ever. declined TO interfere. on the ground
that the surrender of a fugitive, charged
with embezzleneni, was not stipulated in
the treaty between the UuitedsStates and
Great Britain, aud therefore could no.
with propriety be asked for.
Civil suits have been instituted by the
Attorney General. against the two x
TreaSurers and their sureties, upon their
official bonds. In the course Of the in
vesiigations required by these actions. as
well asby tine criminal precautions upon
the indictments found by the grand jury,
II is hoped that some further light may
be thrown upon the uses made Of the
money abstracIsd from tie treasury, and
that a considerable portion Of it. at least,
may be recovered.
Up TO The time eli the disclosure Of the
deficit, Mr.. Gibson had obtained means
FOR meeting the current demands against
The Safe Treasury. and deceiving theleg-
i>laiive committees and the Auditor,
when examining It's condition. py tempo
rarv loans from banks and bankers. and
other devices described IN the report Of
the Special Examiner. Whether the
withdrawal Of the moneys thus obtained
and represented to belong 10 the Safe.
constitutes a d~efalcatiOn aad renders him
liable as a defalter, notwithstanding he
may not have participated in tie origi.-
al abstraction, is a question for the
courts. The practical effect Of that with.
drawal was to leave the State u%nprovi
drd with sufficient funds for the pay
ment of the interest on the State debt,
becoming due on the l>t Of July. or for
the ordinary expense of The government.
To obtain these funds was indespensa-
be. and there were but two means of &C
complishing the object. One was, to
call the Legislature together. in exlra
session, and await its action. the other to
make an INN. date arrangement, and in
woke for j. the sanction OF the General
Assembly at the next regular meeting
Only eighteen days would elapte after
The resignation of Mr.. Gibson before The
interest was payable. and that time would
hardly suffice for the assemblage of the
Legislature and the provisions Of the
Necessary funds through its action. Un-
der these circumstsn ;es. | did net think
it advisable to incur the expense of an
extra session. but advised the making OF
such arrangements. by The Commission
ers of the Sinking Fund and the State
Treasurer. as would promptly secure the
needed mean on TIL. best terms, MT ex
ceeding the rate of six per cent. per an
mum on the amount obtained.
An arrangement was accordingly made
with the Ohin Life Insurance and Trust
Company. under which that institution
advanced TO the STATE. on the Is; day of
July, in New York. the sum of $3.50, 600
which sum. with what had been previ-
ously provided. paid the interest on the
debt, and fully protected the credit OF The
State.
Another arrangement was made with
the State Bank and Branches. by which
Institutions agreed TO pay directly
to the parties holding the warrants of the
Auditor upon the Treasurer, the several
amounts due them, and await reimburse
nent of the principal from the incoming
revenues. and OF interest at six per cent.
from the mex General Assembly. By
arrangement. the pecuniary expen-
ses of the Stlte Government were provi-
led for. and the injurious effect of the
defa lcaiion upon the public interest. as
rs possible. averted. | do not doubt
hat you will promptly provide for the
payment Of the interest which has sccru
I'd uooh the advances so hOnorably and
made.
The arrangement with the Trust Com
paw resulted in unforeseen advantage 10
he State.
AT the time Of Mr.. Gibson's resigna-
lion, according TO the Treasury books.
were in his custody as Treasurer.
State six per cent. bonds to the amount
Of S209 628 II. deposited as security
for the circulating notes of the Seneca
Bank. OF these bonds. it was
soon afterwards ascert iinri that SlS2.-
1873 IA. had been sent 10 New York, TO
be converted, as was alleged. into other
bonds ola differen, date; and 100000
Of these had been placed in the hands Of
& Co.. with authority to sell;
and drafts had been made on hat firm.
and accepted and paid by it. on this
TO the amount Of S58. 500. Pro-
in behalf of the State were i'm
nediately instituted 10 obtain possession
of these bonds. which resulted in an ar
by which the bonds were
transferred 10 the Ohio Life Insurance
md Trust Company, to b. retransfered
o the State, as soon as the money ad-
by that institution in discharge
IF the claim of Atwood d Co. should be
u o. certain securities deposi.
ed by Mr.. Gibson. Before the making
If the transfer according 10 this arrange
nent. the Trust Company failed; and it
vas ascertained that the bonds had been
converted by its Cashier to his own use
" that OF the institution, by which means
he Trust Company had become the
leb;or of the State in their full amount.
Other funds OF the State in the hands Of
he Trust Company were also converted
u the same marper. TIE whole amount
hus embezzled was nearly equal TO the
,um advanced, and would have been al
most. ii not altogether a total loss. had
the arrangement for the payment of
he July interest. created amore than
quail debt to the Trust Company, and
hus secured the State against the posi-
'i!ity of loss by its failure.
Until within a very recent period no
,fectual legislative guards bad been pro-
'ided for the security Of the Treasury
rhe Legislation of 1856 and 1857, in
.reas part supplied this defect. Il made
Auditor of State the chief accounting