, 1860-07-25

will now be paid az correspond with the bonds
from which they are taken, and the payment OF
spuri.u. coupon vii! be detected be 10 exsmi-
nution Of its number aud class which will either
not correspond with that Of any genuine bond,
or will be duplicato thereof. In which case the
genuine coupon must be determined BY reau'F.
ing If necessary the production Of tbs bond
from which It has been taken.
Only such bonds Is have been correctly en-
tered in books Of issue Of tho st lte: should be
included in the balance sheet. If there afe
any bonds outstanding not thus entered, sha
Treasurer should refuse TO pay the coupons,
properly examined and if found jeuuine duly
registered and entered upon the Treasurers &c
count. It requires NO argument or lluatrat,on
to convince any Intelligent business man, that
indicated, is absolutely indispensable, in order
10 protect The State against frauds in this class
OF bonds.
II such system or sny equivalent one was
ever adopted By any Of our State officers, no
records Of It's e1istence could be found upon
last session Of the Legislature, after the accdsnt
al discovery of the Mattison fraud
Ths inscribed bonds Of the State IRE non
transferable certificates Of indebtedness,
payable only 10 the persons to whom they are
issued.
No interest certificates ara attached to these
bonds, but the parties to whom they are issu-
ed credited with the amount Of stock respective.
ly held BY them, in q stock ledger kept Tor that
purpose, and the interest payments are there
made TO these parties or their duly authorized
attorneys, aud receipts taken for the same,
When 3 bond il thus issued to 4. and be Is
credited with the amount, say &l,000. On the
stock ledger, if be sells his stock the bond ha
holds. is not delivered to the buyer, but is sur
rendered tothe transfer agent OF the State, whose
duty it Is to cancel the bond, and issue a new
one to the purchaser: Charge A. with the
comes the o"ner Of the stock, ia the place Of
a. An account is thus opened with every
stockho!der and the stock ledger if CORRECTLY
kept will always show the exact amount of bonds
outstanding and the names Of the individual
bondholders with the amount Of stock held by
IN which every bond issued is charged. and
when any payment upon the principal IL made,
the State becomes purchaser of her own stock
from some one OF her stockholders, and the
amount purchased is regularly transferred to
the State, and the State credited and the stock.
holder, from whom the purchase in made.
charged with the same. To make out his bal.
aace that for interest paym-nts, on these, bonds
the Treasurer should first ascertain from the &C.
count with the State the preclse amount Of
bonds outstanding He should then make out
list OF the stockholders, from the ledger, and
set down opposite the name Of each the amount
shown By the accounts to be due. When these
credits are all added up, the amount total must
correspond to penny, with the balance on the
account with the STATE
The interres. can NOW be paid to the persons
who are shown By the stock ledger, to be the
actual bondholders. sud creditors Of the State,
and any frauds in this department y hen proper.
J., managed, will be securely guarded aga,nst.
You will perceive at once that under this syg.
| ten knowledge Of the names of the bondhold-
e1s, and the amount Of the bonds held bY each
is indispensable to the correct management Of
| the interest account, no coupons or interest
ccriideatns being issued, hut the receipt Of the
bondholders, or their duly authoriz ID attorneys.
taken for every payment Of interest," Prior to
the passage Of the law Of 1859, all Of the inter-
est and transfer books, were kept in New York,
mad ttere :'ere no records Of any kind In this
state BY which the names Of the bondholders,
! nr lie amount OF stock owned by them could
be ascettained. Every si1 months the Treasur-
er would tors ard to the New York agent, funds
| fur the payment Of the interest on tho State
debt. The amount to be forwarded was not
a:certalDed By any correct balance sheet of the
State debt, but it was iudefnits snd variable,
and always sufficient to meet every dema,d that
was made, without examination BIZ the TreAsur-
er into Its validity.
For the payment Of the interest on the in.
<c1ibed bonds, the only vouchers returned to
the Treasurer were the cancelled checks of the
agent on some New York bank, payable to The
order Of various parties purporting to be hold
srs Of our bonds, the checks being indorsed By
them. As the Treasurer kept no books. and
had 10 records in his office by which the names
| of tie actual bond bo!ders could be determined,
or the amount held by them. these iudorsed
checks could hardly. be regarded as Of much
value as a meaos Of detecting any frauds in the
New York office. Assuming, for ILLUSTRATION,
| that the Transfer and Interest Offices in New
York should fall into dishonest hunds; how. IN
the absence Of correct system of accounts ,n
the Hume Department., could any fran3ulen1
practices Of the foreign agent be dstectedy
| Fer transfer purposes he New York agent yat
furnished With blank bonds, signed, sealed, and
htied up with all but the names Of the holders
ia books containing 1000 bonds Of 81, ,00{
each. No regular account waa kept at the cap
i,a, Of the bonds thus sent to the agent. and nt
stated and frequent reports were required o
him. Of the number used, accompanied zith {
return Of the cancelled bonds in whose plac,
they we're issued. If the agent. then, hAd is
sued fraudueutly 4l0O, 900 Of these bonda. Ell
} ing in the names Of tie buyers and credit,n,
: | them with the amount on the black ledger. ant
, had subsequently paid the interest regularly Of
) the bonds, by glving the holders checks for th
same, and returned these checks cancelled au,
indorsed as vouchers, to the Treasurer, hos
: would the Treasurer, under the management
! have described, be able to Distinguish thos
checks from those Of the holders of eenuin
bonds, Or how in the absence Of Q balance
s sheet showing the exact amount OF State deb1
J he was authorized to pay interest upon, coul
he detect the payment Of any e1c.ss that woul
+ result from transaction Of this kind1 lhe
j again, in the loose manner in which the At
i counts we're kept with the agent, it was perfec
), ly easy, and might say safe, SO far as de.et
: tion was concerned, for him to neglect to cur
= eel the bonds, surrendered when transfers we,
+ made, and then use them to any extent as co
e | la.eEals to borrow money on to speculate wit
in Wall at1eet. Very far be it from me to SO,
r that any Of these things we're done- l am onl
e great q temptation existed in consequence
e 1be entire absence Of correct system Of a
counts in the Department at Springfield.
RrroRx COMMENCED.
!. The discovery, By mere Incident, during Il
,e la.t session Of the Legislature, Of the startlir
h fraud that had been practiced in the t}ndiug
e. the 90 day Canal Checks, By Gov. Maltese
in and the Developments growing out. Of the
,e vestigation Of this fraud, by which it VI
+ in liquidation Of Canal Scrip, Checks and 9th
d, | evidences Of Indebtedness, almost ad l1la
~ | without auy correct and duly authenticated !
e cord Of the character or amount Of the o.
ur standing indebtedness. subject to be fund
ie under the law, having been kept in the Fu
it. Commissioners office; the rule adopted bel
simply to ''tske all that was offered" re
n. naturally led to an effort on the part Of t
H. Legislature, not only to provide against su
to frauds in future, but also to adopt such mea
d. as would lead to a full discovery Of any ott
~ dishonest practices, that might exist in I
te management of our State finances.
er For this purpose the Act Of February 9:
ia. A. d. 1859, was passed, removing the Trans
la. | Office and books from New York and providi
Il. tor future transfers by endorsement on
.se back Of the bond, acknowledged before Co
be missioner to be appointed for that purpo
liz Without entering upon any examination Of Il
,e. that. in mr. opinion, it falls far short Of
IT, remedy needed for the many evils that b,
nd grown up under the previous improper mana
IN | 1uent Of our State hnances- There are t
be t leading eyils conaected with our State d.
Ta | account that should be remedied as far a. D.
Il | s,ble, The first Is the want of order, sYst
w. and correct records in its past history, and
secoSa IA the diversity or multiplicity Of val
he tes in the is ne Of State bonds and certitica
bis | Of Indebtedness.
en- Of,be first Of thcee evils hare already 81
%. ken the second, II fully eucidated, would N;
H. u ioug and remarkable chapter in the !" curie
his ties OF finance
en- have previously noticed the division Of
ut. State bonds, into coupon and inscribed bon'
to these are subdirided with variety of issr
ers similar and dissinlilar IL their character.
Ell There are the old "Internal fnprovem
aye bonds" the "Internal improvement seri
in aud Certificates Of New Internal 1mp1oveu
d.. | scrip." "Interest Improvement bonds"
"Iduuidation bonds" " Interest Stock Of IS
and "1nterest Stack ot 1857" Re9iste
Canal bonds" and ''Unregistered Canal bond
an- "Certiticates Of Interest Stock and Chef