The Grange advance., 1874-09-09
GRANGE: ADVANCE.
News Department.
WEDNESDAY, SEPT. 9.
Important Evidence
Malfeasance of Ex-Auditor McIlrath
Frauds in the Stumpage Business
over 100000 LOSS TO THE STATE

over 100000 LOSS TO The STATE
TO the Senate:
On the tenth day Of February, 1874,
in obedience to a resolution previously
adopted by your body, the communica-
ton from Han. - E.. w. Dke,- 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:
Resolved, 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-
Iert 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 a written statement,
which was evidently intended by him
to be his answer to the foregoing COM
municati9n 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
found in section 80 of chapter 38 Of the gen.
eral statutes. In general, it empowers the
Commissioners of the State Land Office to
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 br provided by law. it
provides that all logs so cutshan be marked
with log mark, recorded to the State that
they shall remain the propertysef the State
until fully paid for; that they shall be meas
ured by the Surveyor Genera, :and that the
log mark shall only be transferred upon re-
were fully embodied in the forra of the per-
init used, together with certain other details
not material to this statement.
The proceeds of sales of stumpage were,
by 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 Commissionercan take pos
session of the logs or the lumber manutac-
tured theretrUn, 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 1879 succeeded in collectinssabout $780,
600 for stumpage cut the previous winter.
But as the season advanced it became evil
dent that the log market was overstocked,
held over winter for another seasons con-
sumption. Seeing this state of affairs
doubled my'cxertions for the collection of
the several amounts due the State. As an
additional argument to such deh6ers stated
that nay official term would expire on the
close OF the year, and that all these matters
must be closed up by the 3Oth of November,
the end OF the fiscal year, as | was deter
mined to turn over the business Of the Office
answered that payments should be made in
time, and If necessary, they would borrow
the money fram the banks. Fromthe char
acter OF the fxms represented, I 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 l fonnd that owing to the great stringen-
ey Of money, the banks could not be relied
upon for snch discounts. Il was then too
them, and in the then condition Of the
money market, they would not sell for a,,y
reasonable price. Therefore concluded to
take such security additional to the lien up
On the logs under the permits, as could
get, and to get the debts drawing interest.
To this end I procured notes for the
amount so due as fast as:I could, and held
%1ovv, 4 loVA L.
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, ortle
lumber cut theretram.
In some cases, scarcely half of the LOGS
had arrived in the boom. In otker cases tie
logs were RATED and moored within the jux-
isdiction OF the State and in no case was
the State left with insufficient security.
With affairs in this situation made nv
report to the Legislature Of 1879, 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. "r' = .'
In retiring from office, / explained these
transactions to my successor, and advised
him hereafter to enforce the conditions Of
such permits more rigidly. 49,, -
turLAe0 over t0e nOte8 tnuS OpIane0, ana
the accounts and papers, 70 the State Treas
urer. / did SO because under the law, and
by the express conditions of the permits,
t6ey were payable at his office. 5 i eonstd-
cred that Office the proper place to leave
them.
They were not received or receipted for as
State :r school funds, but taken as bills re-
ceiyable BY said Treasurer. -..& ~ :
The present State Treasurer is wholly mis-
taken, as his books will show, in calling
these notes or accoE nts "Investment, of the
.PermanentSc School Fund - t:s-..~= 1. ''s>.
, ProceedG from stumpage become ''Perma-
nent School Funds when paid into the
they are subject to investment by fund
committee IN certain State, and national
bonds. Any other Investment would ,, 1
high crime and misdemeaner, implica.ing