New-York tribune., 1871-09-14
GOVERNMENT DEFAICATIONS
A DISHONEST PAYMAsTER.

OVER HALF MILLION SPENT IN STOCK sPECU-
LATIONS AND GOLD GAMBLING-FALSE RE-
TURNS MADE FOR SEVERAL YEARs-CRIMINAL
CARELEsSNEss OF GOVERNMENT OFFICIALS.
lBY TBLRGRAPH TO THB TRBUNKl
WARRINGTON, Wednesday, Sept. Is, 1871
There was intense excitement occasiOned here
to-day by the report which subsequently appeared to
be correct that Col Hodges. Paymaser Of the Regular
Army, guilty Of dealcation to the Government ex-
tending back to 1884, amounting to half million OF ao
lars Stock peculations gold gambling and real estate
transactions In which he had been unfortunate are gwen
the leading Of the disaster. Col Hodges wss'
last night conveyed under strict guard by order OF Gen
Sherman, to Fort McHeDry, Baltimore, where ne Will Do
held until o court martial can be organized Ior MS
trial. As soon the defalcation was discovered tno
Secretary of War informed By telegraph, ana ne
will arrive tomorrow. On Sunday Gen. Brice fay
master General received from Col Hodges confession
Of his crime, with q statement that he had lost inc
amount during the last few years in stock speculations
The defaulter has been q favorite with Government
officers this city, where he has always peen regaruco
suspicion and he has always had what s caeo
the cream Of the service. He has been retained In
this city for several years. never having been supeeo
to the and embarrassments OF field service ana
has always had the easiest and least responsible service
in the Paymaster's department.
There ia considerable discussion the responsibility
of the defalcation, the Treasury Department claiming
that the Pay Department at fault while the Paymas
ought to have the eguarity in Hodgess ac-
counts months and years ago. The great loss OF the
Government this case is likely to occasion reforms
which ought long since to have been made as means
OF protection against defaulters. Col Hodges in his let
ter to Gen. Brice admits systematic decrpt, running
back several years false and
dishonest statements and inaccurate accounts His dis
bursements six years past amount to 50 For
the payment Of Treasury certificates for bounty alone
amounts ranged from 100000 to$5ooooo per month
The accounts and statements rendered by payDasters
the General Paymasters office do not prove their own
accuracy the real amount of their deposit balances
That only be arrived at by comparison Of state
ments with their respective deposit accounts In the
various United States deposaes, and without direct
information from the United States depOsitary the Pay
can have means Of knowing the accu-
rscy Of q paymaster's certified balance in that de-
posiay The Secretary OF War in 1866 after con'errpg
with Secretary of the Treasury instructed the Pay
forward to the Treasurer Of the United
States direct at the end Of each week, statement
Of his balance hand and where deposited, as all de-
pOstares in the country required to make weekly
statements of deposits hand with list OF deposits OF
disbursing officers and credits to EACH comparison OF
each weekly statement would show any discrepancy
between the depOsitary and paymaster. If any such
found the duty Of the Treasury Department
to inform the General Of the fact 80, too
the Paymaster neglected to forward his weekly state
ment at a the Paymaster General could only know that
fact by notice from the Treasury The following circu
lar was issued by the in accordance
with OH agreement with the United States Treasurer to
all paymasters and 1t has been force ever sinco:
PArMAsTEs GsNRRAL's oFrlcE,
CIRCULAR No. 4--Each Paymsster will, at the cose OF
each week. 70 the TreasursT Of the United states
desntng e place Of such deposit d%Praa % asers w
sa 6e sehf s so as ass Do be matter
pavmaster he at his office or elsewhere.
b. w. BRICE, Paymaster-General
e far az IL relates Paymaster Generals ofncf,
strict compliance has been enforced and the Treasury
Departmen Mt has informed the Paymaster8cncrai
OF any failure Of compliance on the part OF any fayas
ter Col. Hodges's weekly statements, In compliance
with the circular, have been systematically 1alse no.
porting continually deposit balance IN the treasury
largely In excess real balance by forced entries he
made them correspond with the periodical accounts IL
s to be wondered that the Second Auditor OF the reas
who is the proper accounting officer Of this class OF
accounts fail to call the attention OF the Treasury
Department to these glaring frauds, because they
surely could not have escaped his notice. This
fact may account for the failure OF the Treasury
Department to give the necessary information 10 the
Paymaster- General The account current OF the Pay
master and the certificate Of the Treasurer or Assistant
Treasurer should have been regularly received at the
Second Auditors Office and there examined and ver
fed In all probability the will finally he traced to
the carelessness Of this officer The PaymasterGenera
states that If the duty performed OF examining anu
comparing statements or. If Hodges failed 70 render
iptlmation from the Treasury Department that any ex
animation had been made to show that Hodges was
onilty of any false statement Of his money
balance, of any neglect In not rendering his
weekly statements, was ever received He appears
IN have pursued his unchecked by the accounting
officers OF the Treasury Department. 1t appears that the
money used for outside purchases of stock and gold
gambling has been drawn in cash from the
Treasury and In large sums Here again was failure
in the Treasury to enforce the requirements OF law and
regulations Hodgess disbursements required not dol
lar In cash. All should have been made by checks.
Hodges in his letter Of confession refers to two
In this city, and one in through whose agency
he made these specuations, namely, Middleton Co. and
Lewis johnson & Co. Of Washing gton and Pohamus and
Jackson Co. In New.York The Washington houses, he
also states had knowledge of any crminaty on his
part but the New-YOrk firm was not SO innocent.
HEAVY POST-OFFICE DEFALCATION.
THE HEAD OF THE MONEY ORDER TIE GRIM
INAL-HIS PROPERTY SUFFICIENT TO MAKE
WAS DEFRAUDED.
In the month of July, Postmaster Jones,
desiring to ascertain the condition of the finances
OF the NewY0rk Office, directed the heads OF the
different departments who In the habit of
receiving disbursng money to prepare exact state
mens furnishing him with the required information.
All but one of the subOrdinates thus instructed
plied The exception John W. Norton, Superntend-
ept of the Money Order Department who deferred
sentng his statement from day to day. on various
texts Postmaster Jones' believing that something was
wrong sent Washington and requested the services OF
special agent of the PostOBce Department to assist
4, an examination of the affairs Of the PostOfHce.
special Agent ueatherbridge arrived and upon inves
ca,ion earlv In Aueust found that although NortOn'e