, 1877-02-26
What the Schedule Of Assets and
Liabilities Shows--The Court
House Contract,
The Postmaster-Oenerat Notified
~."His Subordinates In the
Dark About the Affair,
What His BOndsfnen Say on tho
Subject---How the Trouble
Began.
It Is Likely that tho Government Will
Lose Nothing..-0ther Creditors.

It Is Likely that tho Government Will
Lose Nothing..-0ther Creditors.
A rumor began TO steal around tho city snt.
ur1ay, md was repeated With greater force ycs-
tcstlay morning. to tho elfcct~ that Gen. John
Macarthur, Postmaster, was bchfndland In his
accounts with the PoatOfIlcc Department to
such degree that he had been compelled to re-
sign Its position md mako general surrender
OF his effects. The reporter 10 whom tho .mat.
ter was handed Tor Investigation found TINT tho
ran,or was In no respect exaggerated; that tho
General had Resigned his position, was heavily
indebted to the United States Government. and
had Saturday afternoon tilcd voluntary pett-
tlon In bankruptcy. According to this document,
which ia given more fully below. his liabilities
aro $l25, 0o0.-0fteen odd thousand being To tho
post-Ohlce Department. and tho assets, somo
OF them OF nominal character, amounting 10
about ss0, GOO. Tie first lit1lcu1ty With Gen. Nc
Arthur's accounts began In January Of 1875,
with tho
FAILURE or TIE cooK COUNTY xATioxAL
BANK.
Prior to tho establishment Of tho aub-Trcasury
iu this city, tho Cook County National Bank
Ind been recognized as q Government de-
posttory, and It was tho habit Of tho Postmaster
1866, United States officers having public moneys
in their hands wcro required to deposit thcm I'M
Sub Treasury wherc ono wRa available. Therefore,
under ordinary circumstances, It would have he
come Gen. McArthur's duty. after the estab.
tfsllmcnt OF tho 9ub-Treusury hero, tn havo kept
Ills money ont OF tho Cook County National
md In tho sub-TrcasurY. But, by special Of
der Of the Fost-Off Department, procured by
political innuencs, lie Was directed to Deposited
simply lis surplus In tho Sub Treasury. and to
keep In tho Cook County Nht!onai enough to
meet tho current expenscs Ut the Post Office,
which arc very ieayy, since 1t is By draft on this
ot1lce that the mnllcontructors for large
portion Of tho Western territory arc
paid. When tho bank failed, In 1878,
Gen. Macarthur bad on deposit there $4,000.
The Treasury Department retained from the
tnargin on tho bonds deposited to secure ths
hanks circulation enough to reduce tho amount
to $o0 900, ut about which figure It has since re-
maincd, uor'l,as tho bank paid any dividends
except tho small one Of 5pcr cent which was
declared. For this Indebtedness Gen. Macarthur
is hardly responsible, sincn the deposit OF thc
funds In tho Cook County National was due to
the orders Of n superior, md Gen. Macarthur
claims in his petition, and With somo Justice,
that no fs not responslbtc for the amount.
But this Ii trivial matter compared with
Tln OTHER ITEM or IspKnTEpHEss
to tho Post-o.tlco Department, which foots up
about *35000 For many Ycars Gsn. Macarthur
1Iaa been running An extensive Iron foundry on
Ezle street OIL tho North Side. It has been his
misfortune 1inco TIM panic TINT tho demand for
iron has fallen OF and tho price has gone down.
While 1c Inns had several large contracts, Fct
they have not been sufficient to mako tho btsl.
ness profitable. and although ho had supcrIn-
tendent, Mr. D. N. Ford, m experienced man,
who formerly ran For1's foundry. on Clinton
.strcct, ret tho works have naturally and ncces.
shrl1y suffered from tho absence OF their
responsible head. Tho tfme which ho
devoted to the duties Of tho Post-oflce Depart
ment was 60 much taken from h!s Legitimate
business, and he has suffered tho consequences.
Efforts were made at various times yesterday
to SEQ Gen. Macarthur for tho purpose Of get
ting from him, who alono could Gtye 1t. detail
cd statement u 10
TIE wAr IN WHICH, And TUE TINE At WHICH,
tho borrowing Of Government funds began.
Although Gen. Macarthur was At homo
during tho day he denied himself to
/ cashier in tho Office, and 1t Ii therefore
impossible to glyo tho most important part Of
| tho story. It is very well understood that Gen.
| Macarthur has been haru lip for a long time.
| just how long Il not definitely known, but
probably over year. When he began borrow
! Ing Government funds Is uncertain, but
presumably prior to last summer. Atthht tine
he mada IN effort to borrow from somo Scotch
capitalists tho sum Of $4,000 on bis foundry
property. There was then, - At present, 4
mortgage Of o., 600 upon It. H0 stated at tho
| time that he wanted to borrow tho Isl, LOCO In
| order to lift tho prior mortgage and to mako
certain Improvements In tho works. But the
presumption is, slnce be has borrowed from Tho
United States $780, o,ooo, that bis object in u,ahus
The loan was both 10 lit tho prior mortgage and
also 10 make good the p.esumabla deficiency In
hiA accounts. Tho troubles III tho Iron business
hare By no means improved sInee last summer.
Tho contracts which he had have not been over"
productive, new work has been scafce, and he
found It Impossible to tide over tho tlmo until
money might hegln coming In from tho t1on
work on the now Court-1lousct In
in securing au tutcress. It hts
been considered unlikely In political citvlcs that
Gea. Macarthur would remain "a fostmas&es
after tho new Administration came tu. TheFe
was no psoaptct Of catching up In that linited
period, and 'ha therefore presumably did tne
tog H. h Powf ~ wsg atg 10 .
Il In Ills mind last fall to resign his posttion as
Postmaster for substantially tne satne reason
wht3h has now snuyel hlm to da It, bat
ing ou 4 document which he had a.
ready written out. The muuey taken
fEoni the Poet-0dlce revenue u believed to Aa'c
been eunk In the works aud In nothing else.
bad habits. H. simply borrowed little 80 tida
him over : temporary emergency, found nm.
self uua1le to Eeplace It, and kept on borrowing
more, all tho time hoping to catch up.
Willie tho SUN which has been diverted scu-
porarily froM the Poat-Oitee funds lnay seem .
large cue, yet it u small n comparison with ena
total revenues Of the ottler. Tie sum derived
last ye4r from the sale of stamps, stamped Gu.
vclopts, etc, amounted tu &buut 81 ,0Q4.0ut anu
II IL tbcreiore easily seen how 10
could he behlndhaud $4,000 Titnoat