, 1874-12-06
OBJ Gbmagn UTiburt.
sunday Morning, December 8, 1874.
WITH SUPPLEMENT


The trial and acquittal of David A.
Gage, ex-Treasurer of the City of Chicago,
has produced profound sensation in all
ranks Of the community. As one of the wit
nesses stated on the trial, Mr. Gage was,
perhaps, the best known man in Chicago,
and, up to his retirement from Office, was
universally respected and esteemed. He
possessed the unlimited confidence of the
public. Ten or fifteen years ago he WAS
elected City Treasurer, and discharged the
duties Of the Office with acceptability and
fidelity. In 1869 he Was elected to the same
office by large majority. There had pre-
ylous1y been much discussion concern
ing the enormous profits supposed to
have been made by the City Treasurer.
The practice had been for the Treasurer
elect to make some arrangement with bank,
or several of them, whereby the officers Of
the banks signed his bond, and thenceforwnrd
the city money was kept by the Treasurer in
these banks. The average deposits at that
time were probably about SS0O,000. At that
time, also, the city was not authorized to use
the money belonging to one fund for other
purposes It Was therefore no uncommon
thing for the city to have half million of
dollars belonging to various funds in the City
Treasury, and yet, to meet soue demand on
another fund, would have to borrow at 10
per cent. It was notorious that the Treasurer
was paid, directly or indirectly, 4 or per cent
interest on the average deposits in the bank,
and the aggregate of this interest was esti-
mated at from $40, 600 to $50, 900 per year. A
reform in this practice was made an issue in
the election Of 1869. h1r. Gage promised that
he would account for the interest aud turn
over the proceeds of all his deposits to the
City Treasury. The salary Of the Treasurer
was $4,000 year, with no allowance for
clerks. Shortly after his election he notified
the Common Council that his bond was
signed by persons in no way connected with
the banks, and he was therefore able to gctone-
half of one per cent more, or four and a half
per cent, interest on the city deposits; that
he would use his legal salary to pay his clerk;
and that out of the interest he would deduct
$4,000 year for his own compensation, and
pay the rest over to the city. This PROPOSE
ton was generally acceptable. The Common
Council had power to designate the banks in
which the Treasurer should deposit the city
money; but to do this, in tie opinion of the
Law Department., would release lis sureties
rom any loss that mil ght result from such
designation, and therefore the Council
refrained from exercising that DOW
er. While the city authorities were
favorable to Cages proposition, there was no
official recognition Of it /; yet no ona ever OBJ
]ected to it, and the city subsequently, re-
ceived $4,000 from blr: Gage as interest
collected by him from the banks On the citv
deposits- So acceptable was this administra-
ton Of the Office Of Treasurer that A1r. Care
~as, by universal consent, reelected in 1871.
Just after the fire. Up to this time it is as
Sumed TINT Mr. Gage was all right in his
money affairs, although others claim that
more than 100000 of the city funds were
not deposited in the banks at the time of the
nte ana before his reelection. However this
10y oe, ne had construed his own arrange
eu1 WIN II. tne city Us authorizing him to loan
ne poonc money to the banks. He then or
oetore' assumed that the loan Of this money
70 other persons, or using it himself n.os
within the spirit of his proposition, and
hence the Riverside and per1aps otbor =,
vestments. Mr. Gage was wealthy r,a,,
though the fire Ind seriously crippled him ond
eventually destroyed the Riverside operation
He managed, however, to keep fair exhibit
until the eve Of the election Of 1873. Run,ors
that the Treasurer was in default were circu-
lated, and, despite Mt. Gage's protestations to
the contrary, they had serious effect On the
sasult at the election. In the meantime, the