The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1876-01-31
sPECULATING IN STATESMEN.
SEQUEL TO BRIBING CHRISTIAN CON
GRESSMEN.


THE CoMPANY's SUIT AGAINST WILLIAM s.
KING, EX-PosTMAsIER OF THE HOUSE OF
REPRESENT CHECKS FOR $3.50 =
600 PAID.
The New York Sun of Wednesday revives
the Pacific Mail subsidy scandal: The al
legged use of $3.50, 900 for Washington LOBBY
ing in behalf of a subsidy for the Pacific
Nail Company in 1872 is brought 20 public
notice again by the company's suit against
William S. King, ex-postmaster of the
House of Representatives. The action was
commenced III Minnesota, in which stste
King lives, aud is intended by the present
managers to result in the recovery of the
money either disbursed in cOrrupting
congress or retained by the defend.
ant. The plaintiff says the money was ap-
propriated without the knowledge of ms st
OF the directors, and the defendant AYERS that
such is not the fact. Testimony was taken
in this city yesterday before Mr.. Z W.
Wight, notary public. The money bad, by
previous testimony, been traced 10 Kings
posst ssion in this way: Mr.. f. w. q. B5l-
lows, vice President of the P6c DC Mail
company in 1872, wrote to Mr.. Richard B.
Irwin, the agent In San Francisco, 10 come
90 New York and report what he had done
regarding a subsidy for the China line. Ir.
win came, and spent several subsequent
CHECKS FOR S750,OOO
were given to him, aud on May % he pre-
sented them at the American Exchange Ma
tional Bank for payment. King was then
with him, and to King on the following day
the money was paid. Thomas Ellis, note
teller of the National Park Bank the FIRST
of yesterdays witnesses, testified that King
deposited in that bank in May, 1872, SIl2,0O0
and that of the sum $4,000 was placed to
the credit of the State Bank of Minneapolis,
s., 900 to the First National Bank of st.
Paul, $500 paid an overdue note, and the
rest was drawn on certificates of deposit for
various amounts. Mr.. Theodore T. John
son, eX-secretary of the Pacific Mail Com
pany, testified that in May, 1872, he drew
six checks in favor of Irwin, aggregating
S750,000 His further testimony, in re-
Spouse to questions by the opposing lawyers
Mr.. Henry s. Bennett for the plaintiff,
aud Mr. John Noble Goodwin for the de-
tendant-Was as follows: A motion was
offered by o. z. c. Billings, in a directors
meeting, authorizing President Stockwell
to incur expense in Washington. Toe
checks and their connection were first
brought to light in December, 1874 1t was
not the duty OF the treasurer to know for
what use checks signed by him were iu-
tended. The simple order of the president
or vice president was enough authority for
signing q check for any amount. An entry
OF the purpose OF the check, as stated by the
president or vice president, is usually made
IN the margin of the check book.
WITH REFERENCE TO THESE CHECKS,
L asked the vice president to what account
they should be charged. The original
checks had been issued to the order OF A.
B. Stockwell, and so entered in the margin.
After destroying the original checks, by
order OF Vice President Bellows, and draw
ing the checks, of the same am cunts, 10 the
order OF r B. Irwin, asked u V "a a.
count thsy should De entered. Mr.. Bellows
replied: LIST them stand as they sre, aud
the otner part of the entry in Ibe margins
will be given TO you" The promised in:or-
IN atom was subsequently given by Mr..
Bellows, who said, For i've of the checks
add in the margin, 'Eidridge & Irwin. agents
in San Francisco For the other, of $500 900,
add 'Hsrriott d Noyes.'" made these en-
tries. l did not know, but have since
learned, that this was said for the puT-
pose OF misleading me as TO the real pur-
pose OF drawing the checks. L did not
know of any other entries of that tranaction
in any othsr books than the check book.
discov ered that the record was not OF the
actual disposition OF the money when the
matter was brought into court. l saw Irwin
in the Office on or about the day on which
the checks were drawn. Mr.. Stockweu and
had no conversation about what entries
should be made to account for this disburse-
ment. The board OF directors in that period
met monthly, generally, and the next
meeting after the drawing of these checks
was on May 80, 1872. the auditing commit
tee met on December Is, 1872, and was
present when they made their report to the
board. The subject OF this large expendl-
g I'd fNr n ic-
cussed. know, as a fact, that the expendi-
ture was purposely concealed by Mr.. Stock
we'll aud Mr.. Bellows from the board, and
that the entries that / and other officers OF
the company made were q part OF the plan
to conceal the knowledge from other officers
and directors.
IN TRANSMITTING THE BUSINESS OF THIS COM
PANY,
the system used to guard against such false
entries as these was this: The bylaws pro
vided for an auditing committee of the pres
ident and three directors, appointed every
three months, to audit all accounts OF every
quarter of year; to have before them al
securities of every nature and kind to com
pare with the accounts and verify them; snC
| to make full written report to the board
All bills for things purchased were required
to be examined by a clerk. The survey o.
4
certify to the quantities and prices. Al
checks were required to be signed by th'
president or vice president and by the treas
urer. The president or vice-president wa
| required to put his initials on every bill
draft. or contract for which he signed I
| check. As an expert accountant
should say that. had the auditinl
committee properly performed it
duty, il would not have dis
covered the falsity of these entries
because the amounts were not unusual.
there was no collateral tor the amount o
loan represented by the entries TO have
been made, the committee should have dis
covered it, provided the entries in the &C
counts were the same as in the margin
the check books. L had no supervision o
| the accounts. In the cash book, sub
sequently, tue $3.50, 600 was mentioned with
out explanation, by order of the vice presi
dent. The accounts of the San Francisco
agency were adjusted every month, ant
/ uouchara uaro rau uirad for avarV dollar