The anti-monopolist. [volume] (Saint Paul, Minn.) 1874-1878, 1874-09-03
Supplement.
IMPORTANT DEVELOPMENT.
Nafeaance of Ex-AuditOr McIlrath
Frauds in the Stumpage Business
OVER 100000 LOSS TO The STATE
To the Senate:

To the Senate:
On the tenth day of February, 1874,
in obedience to a resolution previously
adopted by your body, the communica-
ton from Hon. f. w. Dixie, State
Treasurer. which is hereto annexed,
and marked schedule "A, was received
and read. Whereupon the following
resolution was adopted by you, and
your committee was appointed pursu-
ant thereto:
Resolred, That the communication of the
State Treasurer, with accompanying papers
and letters, be referred to a select committee
of three, with instructions to further inves-
tigate the subject matter thereof and all mat
ters relating thereto; and that said commit
tee have power to send for persons and pa
pers, and have authority to employ an ex-
pert to make an examination OF said books
in the office of State Treasurer and Auditor,
as said committee deem advisable and
proper.
Immediately thereafter your commit
tee met and proceeded to the discharge
OF their duties as such. At the first
meeting, Hon. Chas. McIlrath, formerly
State Auditor, appeared before US and
presented and read written statement,
which was evidently intended by him
to be his answer to the foregoing COM
munication Of the State Treasurer and
resolution appointing this committee.
That statement is as follows:
The law relating to the sale of pine stump
age and granting permits to purchasers is
in nf oh voto oct bo
eral statutes. In general, it empowers the
Commissioners OF the State Land Office to
sell stumpage at public sale after an ap-
praisal by the Surveyor General of logs and
lumber, and to grant permits therefor under
such rules and REGULATE, ms as he may deem
proper, or as may bc provided by law. it
provides that all logs SO cut shall be marked
with log mark, recorded to the State that
they shall remain the property OF the State
until fully paid for; that they shall be meas
ltred by the Surveyor General, and that the
log mark shall only be transferred upon re-
ceipt OF the stumpage in full. These points
were fully embodied in the form Of the per
init used, together with certain other details
not material to this statement.
The proceeds of sales of stumpage were,
10y the express terms of the permit, payable
At the office of the State Treasurer If the
purchaser fails to comply with the terms of
the permit, the Commissioner can take pos
session of the logs Or the lumber manutac-
tnred theretrom, and sell the same for the
amount of stumpage due and the proper
costs and expenses of such sale.
The stumpage business under considera-
ton was conducted according to the fore
going requirements, and during the summer
OF 1872 | succeeded in collecting about $780,
600 for stumpage cut the previous winter
But as the season advanced it became evil
dent that the log market was overlooked,
and that large quantities of logs must be
held over winter for another seasons con-
sumption. Seeing this state of affairs |
doubled my exertions for the collection OF
the several amounts due the State. As an
additional argument to such debtors stated
that my official term would expire on the
close of the year, and that all these matters
must be closed up by the seth of November.
the end of the fiscal year, as | was deter
mined to turn over the business of the office
in as finished q condition as possible. They
answered that payments should be made in
time, and If necessary, they would borrow
the money from the banks. From the char
acter of the firms represented, had full con-
fidence in their representations. and every
reason to believe that such payments would
be made within the fiscal year. Later in the
fall found that owing to the great stringen-
upon for such discounts. It was then toe
late to take possession of the logs and sell
them, and in the then condition of the
money market, they would not sell for any
reasonable price. therefore concluded to
take such security additional to the lien up
on the logs under the permits, rs l could
get, and to get the debts drawing interest
To this end l procured notes for the
amount so due as fast as could, and held
llo%o A~& L.. III l.
the permits.
No log marks were transferred, and no re-
eeipts given which would in any way invali-
date the lien of the State on the logs, or the
lumber cut therefron.
had arrived in the boom. In other cases the
logs were rated and moored within the jur-
isdiction of the State, and in no case was
the State left with insufficient security.
With affairs in this situation I made nv
report to the Legislature of 1919, and in the
proper place mentioned the difiollties I had
encountered and my action in the premises,
and in another portion Of my report made
mention of the amount of stumpage so in
woived
In retiring from Office, explained these
transactions to my successor, and advised
him hereafter to enforce the conditions O,
Iturned over the notes thus obtained, and
the accounts and papers, to the State Treas
urer. did so because under the Law, and
by the express conditions of the permits,
they were payable at his office. oonsid-
cred that office the proper place to leave
them.
They were not received or receipted for Is
State srschoel funds, but taken as bills re-
ceiEable by said Treasurer.
The present State Treasurer is wholly mis-
taken, as his books will show, in calling
these notes or aecor nts ''Investmenu, of the
Permanent School Fund"
Proceeds from stumpage become "Perma-
nent School Funds when paid into the
treasury to the credit of that fund. Then
they are subject to investment by fund
committee in certain State and national
bonds. Any other investment would ,. q
high crime and misdemeanor, implica.ine
the Governor, Treasurer and Auditor who
make the investment. These notes were
not charged to that fund BY either the Audi
tor or the Treasurer. They were considered
merely as collateral TO the stumpaee con-
tracts. Some of the notes forwarded to me