The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1873-10-23
DEFALCATION IN THE TREASURY OF
THE STATE OF NEW YORK.

F1hG lAlE OE NEW YORK. sH
Charles II. Phelps, Cashier in the Trsasury
Office Of tho State Of New York, has become q
defaulter 30 the amount OF $500 OOo Their,
was sys.sm OF checks in the Comptroller
office. which was deemed an absolute sscurit,
against fraud. All money received In The
statc Trsasursr's Office 10 or should be PAID
into the Commercial Bsnk In Albany. BY al
existing arrangement that Bank 10 entitled te
retain one half, and ono quarter Is to be
Transferred 70 the Mechanics and Farmers
Bank and one eighth each to the Albaay CITY
aud New York State National Banks. For
yesrs II had been the cusEom OF the Banks ia
send TO the C0lnptTOilel's Office duplicate oil
ot each month. These books always passed
tnrougn the hands OF the general book keep
er, George 5ceiey. THE banks compialn,ng
OF the labor involved, and MIR. Phelps giving
assurance that:t Was entirely unnecessary,
Mr Seeley dropped the duplicates without
the Treasurer. This left bu: o angle act OF
looks TO be manipulated. The next step was
to induce tue general DO0k.kceper 10 accept.
ia seine lnstanTeS, the 4.Atelnent Ut the cash
Ter vi Lls baialco in some one OF the banks
without producing the bank books" This
opened The way " use the money and by false
statements and entries 10 cover II up. And
the explanation given above 10 evidently by
one wrltlng in the interest or believing In the
lnnocencs Ut tho Treasurer and Comptroller.
Tue dstAlcatlon WAS brought To light Ia
this way by Deputy Comptroller Gallon OIL
/ he 35th OF September. "Mr. PhslpS present
ed, IN the absence OF Comptroiier Hopkins.
transfer cascks amounting TO SITS. 900, Whlch
This Mo. GaIlien refused TO do, and in = few
moments Mr. Ralnes, tho State Treasurer,
brought Them TO him TO sign. Mr.. Gallien
again refused TO do so, upon which, 1t 10
said, Mr.. Rainss became very angry, and lett
the ComptrOlIer's Office. Mr. Gsllien then
sent to The banks in which the State funds
were deposited, and asked for copy of their
balances. As soon as he received the figures
he found there was not sufficient surplus at
the Commercial bank to warrant the drawing
OF transfer checks Tor so large a sum-" 'On
the 9Th OF September the deposits st the
Mechanics aud FArmers' Bank had been
drawn down To about S4Jo,OOO, and it was
known that day o. two previous about
$150, 900 had been paid into the Commercial
Bank, and It being about the time OF tho pan.
ic, when the banks were anxious to have as
large bAlanc as possible, complaint was
made by the Farmers and Mechanics Bank
that they had not their full share OF the de-.
posts. This caused the drawing OF the trans
for checks for SITE. 600 above alluded to, as
Mr.. RAlRes wished to equalize the balances
came satisfied. from the figures furnished by
the banks that SITS 900 was not the proper
Am ount to transfer, he told Comptroller Hop.
ktns. and justified his refusal to sign the
checks. Comptroller Hopkins went TO Mr.
RAnes office aud acquainted him with tho .
fact; then the balances in Phelps book snd In
bank books were compared aud the fraud
discovered. Phelps had charged the bank
with larger balances than they had, and by
;his means was enabled to cover his fraud and
make his trial balances come out right.
On Friday Phelps left hls Office and did not
again return, Ms DOUBTLESS matters were be-
coming unplessantlV warm. Even after
Mr. Galllen had discovered that something
was wrong. Phelps's good character STAYED
inquiry of, for on Mr.. GA;lien showing Mr..
Ralnes copy or the figures the Treasurer was
SO impressed with the unimpeachabIe char
acter OF Mr.. Phelps that he either omitted or
neglected to invest ate the books
Mr.. RAines finally followed Mr.. Phelps with
detectives and arrested him in New Jersey
and brought him back, and at last accounts
ho Was undergoing examination before The
police magistrate. Frank Z. Sherwin. VIII O
has been doing business in New York. osten.
sibly as o banker and broker, has been arrest-
ed and held to bail but being unable to fur
nish 1t has been committed to Jail,
Mr.. Raines and Mr.. Hopkins are both can
didates for reelection for their respective Of
fees, Rsines Democrat and Hopkins Republl>
eau.
w ORIEDGE AGAIN