The New York herald., 1873-10-16
ROBBING THE STATE.
The Cashier of the State Treasury
a Defaulter.
100000 PURLOINED.
Arrest of Charles Fl. Phelps,
the Cashier.
HOW He MANIPULATED THE BOOKS.
Cool Propositions by the
Criminal.
100000 PURLOINED.
HOW He MANIPULATED THE BOOKS
ALBANY, Oct. Is, 1878.

ALBANY, Oct 15 1873.
Charles H. Phelps, cashier in the State Treasury
Department., was arrested in Jersey City Tuesday
and brought here last night at midnight, charged
with robbing the State Treasury OF an amount of
money supposed to reach $S0o,Ooo Under an ar
rangement made by the Comptroller and Treasu-
rer the State deposits are divided between i've or
six OF the banks OF this city, few days since the
state Treasurer discovered that the cashier was
making larger deposits in one of these banks than
Ii was entitled to- and at once instituted an ex-
animation OF his accounts, but without suspecting
that any OF the funds OF the State had been embez-
zed, the most entire confidence being placed in
the cashier by every one, and the system OF checks
In the Comptroer's ONCE being deemed
AN ABSOLUTE SECURITY AGAINST FRAUD
For years 1t has been the custom for the banks to
send to the Comptroller's Office duplicate OF the
Treasurer's bank book upon the first day OF each
month.
These books passed through the hands OF the
general bookkeeper, Mr.. George Seeley. The
banks complaining or the labor involved, and Mr..
Phelps giving assurance that IL was entirely un-
necessary. Mr. Seeley dropped the duplicate set
without the knowledge OF either the Comptroller
or Treasurer. This left but one set OF books 10 be
manipulated. The next step was to induce the
general bookkeeper to accept in some Instances
the statement OF the cashier OF the balance in
some one OF the banks without producing the bank
books. This was successfully accomplished
during the last month and thus Mr.. Phelps
escaped detection for very short time.
He charged large sum to the Mechanics
and Farmers Bank. which lis own state.
Mr. Seeley made the usual and proper examination
the bogus entry would then have been discovered
Having shown how Mr. Phelps succeeded dine IN con, !,
remains to show
It appears that he obtained the cash upon some OF
the drafts remited to him oy the county treasurers
These drafts could not legally be cashed without
the endorsement OF the Treasurer or OF his deputy
and any bank taking these crafts upon the en-
dorsement OF the casner only is liable and Will be
compelled TO refund to the State. The Treasurer
is not yet able TO say through what banks the
drafts have passed, nor what Endorsements they
bear From examinations thus far made the Treas
urer Is OF the opinion that the emDezZlement may
approximate $500, 000 but
THE STATE CANNOT BE THE LOSER.
The Treasurer began his examination by request
ing the various banks OF deposit TO furnish him
with statements OF their accounts. This threw
Phelps into despair, Tor he knew that the examina
ton of these statements would reveal his opera
tions. He therefore fed from the state, and wrote
note to the treasurer admitting that his accounts
were not entirely correct. Mr.. Raines followed
took place last Friday Mr.. Phelps claimed that II
allowed his liberty two or three months he could
the money in speculations in New York city, but
not in stocks, and would not say definitely to what
purpose he had applied IL. He also admitted that
HE HAD ACCOMPLICES,
but would not give their names. He claimed
that the money was still largely under his
control and that he would soon be able
to refund say 100000 OF the amount. lie
desired TO be left alone that he might be Tree to OBJ
tain and restore the money, and propositions were
also made from legal sources TO adjust the matter
on some basis of compromise. The Treasurer, how
ever, would not assent TO any arrangement which
either settled the offence or permitted the offender
10 remain at large. He put a detective upon the
track OF Phelps, obtained the necessary papers
from Governor Dix and had Phelps arrested In Jer-
sey City and brought here last night