The Grange advance., 1874-09-09
GRANGE ADVANCE.
News Department.
WEDNESDAY, SEPT. 9.
Important Evidence
MalfeaSance Of EX-Auditor Mcllrath
Frauds in the Stumpage Business
OVER 100000 LOSS TO THE STATE

On the tenth day of February, 1874,
in obedience to a resolution previously
adopted by your body: the communica-
ton from lion. E.. 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:
ReSolued, That the communication of the
State Treasurer, with accompanying papers
and letters, he referred to a select committee
Of three, with instructions to further inves-
tigatc the subject matter thereof and all mat
ters relating thereto; and that said commit
tee nave power to send for persons and pa
pcrs. and have authority to employ an ex-
l,crt 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 act and proceeded to the discharge
oi' their duties as such. At the first
State Auditor, appeared before US and
presented and read a 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 otpine stump
age and granting permits to purchasers is
found in section % OF chapter 33 OF the gel-
eral statutes. In general, it empowers the
Commissioners of the State Land Office to
sell stunpaee at psblic sale after an ap-
hp t],o Gu Gor Of i
Lumber, and to grant permits therefor under
sucE rules and regulations as he may deem
proper, or as may bc provided 10y 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
urcd by the Surveyor General, and that the
log mark shall only be transferred upon re-
Seipt OF the stumpage in full. These points
were fully embodied in the form Of the per-
NIT used, together with certain other details
not material to this statement.
The proceeds Of sales of stumpage were,
by the express terms Of the perznit, payable
at the office fthe 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 lulnttr manrtac-
tured ti,crefrun, and sell the same for the
a1ncu1ft 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 evi-
dent that the log market was everstocked,
and that large quantities of logs must be
held ever 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 deth rs stated
that nay official term would expire on the
close OF the year, and that all these matters
the end of tire fiscal year, as | was deter
mined to turn over the business Of the office
in as finished condition as possible. They
answered that payments should be made in
time, and if necessary, they WOULD borrow
the money fram the banks. Fromthe char
scter OF the films represented, had full con-
fdence in their representations. ard every
reason to believe that such payments would
be made within the fiscal year. Later in the
fall fonnd that owing to the great stringen-
cy of money, the banks could not be rel led
upon for such discounts. It was then too
late to take possession of the logs AID sell
them, and in the then condition Of the
money market, they would not sell for any
reasonable price. therefore concluded to
1aNc sucA eecurIlJ aAulIlOHai W TIE lle2 ul,-
on the logs under the permits, as I could
get, and 70 get the debts drawing interest.
TO this end I procured notes for the
amount so due as last as could, and neld
them as collateral 20 the Indebtedness uIder
the permits.
No log-marks were transferred, and no re-
eeipts given which would in any way invsli-
date the lien OF the State on the logs, Or the
lumber cut theretrom.
In Saarroly half of< <h1
had arrived in the boom. In otker cases tie
logs were RATED and moored witkin the inE.
isdiction OF the State and in NO case was
the State left with insufficient security,
With affairs in this situation | made m.
report to the Legislature of 1873, and in the
proper place mentioned the difficulties had
encountered and my action in the premises,
and in another portion Of my report made
mention Of the amount of stumpage SO in
volved
In retiring from Office, explained these
transactions to my successor, and advised
him hereafter to enforce the conditions of
such permits more rigidly.
turned 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. 1 consid-
cred that Office the proper place to leave
them.
They We're not received or receipted for as
State CT school funds, but taken as bills re-
ceivable by said Treasurer
The present State Treasurer is wholly mis-
taken, as his books will show, in calling
these notes or accor nts "Investinent, of the
Permanent School Fund"
Proceeds from stumpage become "Perma-
nent School Funds when paid into the
treasury tothe credit of that fund. Then
they are subject to investment by fund
committee in certain State and national
bonds. ANY other Investment would :.
high crime and misdemeanor, implica.ing
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 70 the stumpage con-