New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-29
THE ALBANY DEFALCAiION
Is ANY PUBLIC OFFICER TO BLAMEf

THE CONTROVERSY IN REGARD TO HE hESfVN'A
BuITY NOT SHARED IN BY THE CONlhoiAH'
AND TREAsURER--THE LAw-How BUSINESS ~
CONDUCTED IN EACH oFFICE-sOME OF THE
ESTABLISHED CHECKS NEGLECTED - CARELESS
NESS OF THE CONTROLLERS DooKKEEPER -
THE BANKS DID NOT DO THEIR WHOLE DUTY.
IRON TIE SPECIAL CORRESPONDENT OF THE TRmUsE.l
ALBANY, Oct. 2S.-The controversy which has
arisen within the past few days. between the respec-
tive friends of State Treasurer Ranes and Controller
Hopkins in regard to the measure Of responsibility
which rests upon each for the defacaton of Cashier
Phelps, lately discovered and which has been car
ried on with considerable bitterness by
portion of tho party press OF the
State, is not participated in by those gen
tlemen themselves, and probably would not have
occurred at all had they not been candidates
on rival State tickets. Party leaders could not allow
an opportunity like this TO pass without an attempt
to make political capital. The discussion VIII nOt'
however bs without its good results The defalca-
ton itself has already caused a most searching IN
vestigation INTO the methods of conducting the
business of the State TreasureIs oice the contro-
versy referred to will result in an extension OF that
investigation to the Office of the Controller ana IN
sure careful review both of the laws OF the state
and of the regulations Of each department which
have been established, TO insure an honest manage
ment of the State financial affairs.
The State Treasurers office and that OF the Con-
troler arc intended to be q complete check upon
each other and the laws making them such seem to
have been very carefully drawn. Title Ill OF the
Revised Statutes of the State treats of tho duties OF
tho Controller and quote from it several para
graphs to prove the assertion have just made:
Sec. a. Tho Controller shall from time to time, re-
que all persons receiving moneysCr secTS; or OF
State or which an account Is kept IN ms Once, W
render statements thereof 10 MINI ana an sucn peisos
shall render such statements at such times anu IL quo"
form rs hesshali require. 1900. N .,,.,
SEC. G. lie shall cOuntersign ana enter on checEs
drawn By the Treasurer, and all receipts TOT money
paid to the Treasurer ana no such receipts sha' po
evidence or payment unless 50 counterSlsheu. -,
SEC r. lie shall procure from the books OF the banks
in when tue Treasurer shall make ms deposits, monthly
paid out of the same on account OF tue Treasurer.
SEC. TO- On the first Tuesday OF every month, or
anime tho tie debts aud credits IN the Dak
rTeslsTiy OF dtcrncy tneren he SHALL unless the
same BE- rCciod or explained 10 Ma Satisfaction, IOI1u
! with report the same. writing TO the Governor
! SIG H. There sha bo "a deputy controller. who may
perform any OF the duties OF tbs COntrOer except thc
! drawing of warrants ON the treasury inc AUDITING oi
public accounts, ana the dunes OF the Controller a. com
missioner OF tue ldnd once COMMISSIONER vi tno Vd"'
! fund, and state canYdsorl.
These are all the sections in the law that throw
any light upon the duties of tho Controller in con-
| nection with the Phelps defalcatiJn. Title Nv.
treats of tho duties Of the Treasurer. The 5h 9th,
! 95n and 10Th sections forbid the payment of any
money out of the Treasury except on the warrant
of the Controller aud direct the Treasurer 70 deposit
all moneys that into his possession on account
Of the State in BANKS III Albany that considered
| by him and the Controller secure, and which pay
the highest rate of interest," also in the Manhattan
Bank Of NowYork. Sections H. u, and IA vi this
/, title quote in full
SEC H. The MONEYS so deposited shall be placed 70 the
OF the Treasurer; aud he shall kcepa bank
In which shall Oe cnereu his account OF deposits Ia anu
moneys drawn from the banks IN which bdch deposits
SIC T.? tho said banks shall respectively transmit 90
the Controller monthly statements OF the moneys WMc
shall be received and pad W hem on account VI tue
Treasury. . ,,..-,..--,, H.. a..
Controller Tor BIS Inspection on the nEsl 1e5d"y Ia every
! month, anu OUencr II required.
IL has always been the custom, long before the
! present administration Of the Treasures and Con
rollcrs Offices to make all deposits In and draw all
| checks upon the Commercial National Bank of this
! city. few exceptions TO this rule have occurred
within the past few months, but they have not
amounted in all to 100000. Funds intended foE
other Albany banks, or for the Manhattan Bank Of
New-York, are transmitted by means of transfer
| check on the Commercial National Bank, and
when it is desired to use money that is OH de
post i'm any other bank, II Is first transferred
to tho Commercial in the same way. 10 has FOL
many wears been the custom to have duplicate pass
!
Commercial National Bank. One of these was KEEP
in the Trcasurers Office and the other in the office Of
the Controller. More than a year ago tho Con
trolley's copy was discontinued without the knowl
edge, as it is now asserted IN the Controllers Office
of either Mr.. Hopkins or his deputy. Mr.. Seeley
tho general bOobkeeper in tho Controllers office
who had charge of this book. says that the bank
officers or clerks complained that the du
plicate book involved them in so much labor
that it was announcement for them to keeI
it up and promised that if he would consent to il
discontinuance they would write up the Treasurer
copy enough earlier in the month for it to pass
through the IrcaSureIs Office and reach him early
! as he then got tho duplication. He thought the
duplicate was kept only for his own convenience
and so consented. Mr. Raines thinks that Phelps
had something to do with abolishing this duplicate
pass book bnt it is agreed i'll both offices that the
fact Of its discOntnuance was not known to any
body but Phelps and Seeley until about the time
that the defacation was discovered. No duplicate
pass books were required from the other banks
Phelps never got any money on checks; those,
after having been signed by the Treasurer and his
deputy, have to be countersigned by the Controller
aud when they are taken 10 him must be accom-
panied BY the warrant for the amount, previously
drawn by the Controller. 1t would be almost impos
sble for a check in blank, or one made payable to
the order Of the wrong person. TO pass through the
Controllers Office His stealing was in the form OF
drafts of County Treasurers payable the order Of
the State Treasurer and of cash from the money
drawer The manner in which the drafts were di-
verted is already known. When they are made pay
able to the Controller they are recorded and in
doTsed by him or his deputy to tho Treasurer, who
either himself by his deputy, Endorses them
to the cashier Of the Commercial National