New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1873-10-16
THE ARRANGEMENT.

THE ARRANGEMENT.
TIE CUIPRT's EXAMINATION DEFERRED TILL To-
DAY-How MS DEFArcAToS CAME TO LIGHT
ALBANY, Oct. 15.-Charles II. Phelps, cashier
in the State Treasurers office, was arragned IN the
Police Court this afternoon ON charge Of stealing
draft or bill exchange from the Treasurers ohce to
the amount OF $4,000 stated that his counsel Judge
Birdseye and A. Chapman of NewYork, were not
present, and requested postponement OF TIE
examination until tomorrow afternoon Which
was granted 1t liz feared the amount
embezzled will exceed 100000 The Euenlng Joui'di
says appears that at the examination about the fret OF
September Phelps stated the balance in the Mechanics
and Farmers Bank at 100000 more than really
The books OF the other banks examined. but
whether Phelps produced the book OF this bank, or,
upon the plea that It was not written up
or some other pretext, induced the general
bookkeeper to accept his statement OF the balance Is not
absolutely clear. The book itself has not been seen
Phelpss disappearance about the LIST OF October
and cannot be found In the latter part Of September
question was raised as the transfer OF funds from one
bank to another the consent Of the Controller being
necessary. lie secured statement OF the balances from
banks Themselves aud the Treasurer did the same
thing. The statement led TO examination and to the
disclosures which have been made.
Phelps has not made known the names OF those with
whom he operated IN his speculations, and IL Is not
fully known what banks cashed the drafts, or whose
indorsemont they bear One or two OF them which
have traced found TO be made payable 20 the
order OF an individual who Il known TO be cashier OF
NewYor banking The cashier Of the treasurers
office have usually had small side account In the
checking bank which mainly used for the
convenience or employees Of the State who might
desire TO anticipate part ofItheir monthly pay. The
cashier would draw small checks for the various
amounts desired and make them good by the deposit
OF state checks at the end Of the month. MI Phelps
had account as his predecessors had but II
seems to have larger than generally the case
aggregating $4,000 about the LIST Of septem-
ber The EUetlin0 Times has the following account ot
how the defacaton was detected:
On Saturday, Sept IS, the first step was taken by
Deputy Controller GallIen which resulted in the dis
cOvery Of the fraud On that day Mr. Phelps presented
to him. In the absence OF Controller Hopkins transfer
checks amounting to $4,000, which he requested Mr..
Galen countersign. This Mr.. Gaen refused TO do.
and in few moments Mr. Raines the State Treasurer,
brought them to him to sign Mr.. Gaien again refused
to do 30, upon which, it is said, Mr..
Raines became very angry, and left the Con
troller's office. Mr.. Gallien then sent 10
the banks in which the State funds were deposited and
asked for copy OF their balances. As as he re-
ceived the figures he found there was not sufficient
surplus at the Commercial Bank to warrant the drawing
Of transfer checks for large sum. All money re-
ceiyed at the State Treasurer's Office Is should
be paid the Commercial Bank in this city. BY an
existing cement that bank is entitled to retain
half the Mechanics and Farmers Bank one quarter and
the Albany City and New-York State National Banks
one-eighth each Of the whole amount deposit. As
soon as the gross paid into the Commercial
Bank transfer checks were drawn on that bank and
paid into the other banks equaliZe the whole
deposits II appears that the 9th Of September the
deposit at the Mechanics and Farmers Bank had
been drawn down to about 100000, and it was
known that day or two previous aDoui
81 100000 had been paid into the Commercial
bank and it being about the time OF the panic when
banks were anxious to have large balance as posi-
BILE a complaint was made by the farmers and mechan-
les bank that they had theO full share OF the dcpos
It's This caused the drawing OF the r0nser checks for
the sl75OOO above alluded to- as Mr. Raines wished TO
eoualize the balances As Deputy Controller
Gaen became satiied, from the figures furnished by
the banks that Sl75OOO the proper amount TO
transfer he told Controller Hopkins, and justified his
refusal TO sign the checks Controller Hopkins went
into Mr. Rainess Office and acquainted him with that
fact aud then the balances in Pheps books and in the
hank books were compared and the fraud discovered.
Phelps had charged the banks with larger balances than
they had aud by this means enabled TO cover MS
fraud and make his trial balances come OUT
r1gnt. On Friday, the Sd or october, Phelps
left his Office and did not again return, as
doubtless matters were becoming unpeasantly warm.
Even after Mr. Gallen had discovered that something
for on Mr.. Gallien's showing Mr. Raines copy Of his
figures the Treasurer impressed with the uniln'
peachabe character OF Mr. Phelps that he either omit
ted or eglccted investigate his books AT present
banks are not liable George seeley. the ookkeeper
has been suspended the duties OF his Office for the
present