New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1859-02-23
THE ILLINOIS FRAUD.

Some three or four weeks ago the telegraph from
Illinois announced discovery that the State had
been bed, by the partial payment and partial fund
ing in State bonds of certain forged floating scrip,
to the amount of 100000 or so, presented for re-
demption and funding by e1-Goy. Matteson of that
State who, within short period. past has figured
largely as purchaser of State scrip, banker, and
Spectator in general, apparently with very
abundant means The next story was that the
scrip was not forged, but genuine, only th,t it had
been once paid already. The Legislature OF the
State, being in session, appointed Committee of
Investigation, before which ex-GOy. MattesOn ap-
peared By counsel and by means of this inyestigs-
ton the whole story has been pretty we'll brought
out.
1t appears that during the progress of the Lii
nos and Michigan Canal in 1885, the Canal Com
missoners negotiated loan of million Of dollars
from the United States Bank, payable by install.
ments, to carry on the work. For some reason or
other, the May insallment of the loan was not
forthcoming, and as means of going on with their
work, the Commissioners issued 500, 900 in
ninety.day checks on the Chicago Branch of the
State Bank, and in the August following $l3OOOO
more in the same checks. These checks were all
presented at the bank and paid so that in 1874
there remained outstanding, of the entire issue,
only S3l6. By an set of the illinois Leg
islature passed in 1S47, holders of Canal
or other State indebtedness were allowed TO
fund it, and to receive instead interest bearing
bonds, or by a subsequent arrangement, as it
would seem, to receive payment half IN money
and half in bonds. Two years ago on the 9TH of
January, Matteson being It'll in Office though just
about to 60 out the Republican candidate, Gen.
Bis,el having been elected 10 supersede him
presented TO his own clerk, who was also clerk Of
the Fund Commissioners, of whom the Governor
is one ex.offcio, $1,000 10 the aboye-described
canal checks, for which be took bonds 10 the name
of Cabot johnson. In the February following,
being then out Of Office he presented to the same
clerk packages Of these same checks to the amount
of $40 600, for which also he issued bonds in the
name Of several persons, al Of whom, on inyesti-
CATION, prove to be mere myths, IS unreal as the
value of the checks funded in their names. On
the 18th of March, Gov. Matteson presented 8
new batch of these checks, to the amount of
S3l, 500, for which he received bonds in the same
way. This is the testimony Of the clerk as re-
ported, but there must have been more Of these
checks thus funded, as it is stated that Matteson
received in bonds about SlO7, 900, Of which he
deposited S96,OO0 with the State Auditor,
as security for the circulation Of bank ct Shaw
neetown, of which he is the owner; and further,
that the books Of the Fund Commissioners show
that the amount in bonds and money, principal and
interest thus goused, or attempted to be gouged,
out of the State, amounts to $4,000.
This funding process, thus far, had gone on
swimmingly, when attention was called 10 1t BY
Gen. Fry, one of tie former Csusl Commissioners,
who, happening lately to meet with these funded
checks in the Auditors Office, and well knowing
that the whole issue had long ago been paid sup
posed they must be forged. 1t turred out, how
ever, on examination that they were partly checks
that had once been paid at the bank, some Of them
having special Inducements and all showing abun-
dsnt evidence that they had passed through the
bank on which they were drawn, and partly checks
that had in fact never been issued being IN
trimmed, and without the Hxme Of any payee,