New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-06-09
INVESTIGATING CARR0LDs FRAUDS.

TESTIMONY OF THE ASSISTANT DEPUTY CON-
TRoLLER AND THE DEPUTY CONTROLLER.
The special committee of the Board of Aldermen
engaged in investigating the coupon frauds In the
Finance Department. continued its session yester-
day. Assistant Deputy Controller Osborne Nc,
Daniel explained at great length the process o.
issuing and cancelllng bonds and the canceiatlop
of coupons. He believed that the amount Of the def
alcation on the part of Carroll was $14S,63O. Inc
assertion made by the Commissioners of Accounts,
that the discipline OF the Finance Department was
lax and that the office in state bordering on de,
mOrallzation. the witness declared was false and
sanderous. One reason why the defalcatlon went
so long without being discovered was because the
Commissioners of Accounts made frequent exam,
nations of the accounts of the Finance Department
and the Controller believed their statement that
everything was right.
Deputy Controller Richard A. Storrs testified that
prior to 1873 the coupons were paid by the CITY
Chamberlain. The forms now used were obtained
from the Sub-Treasury. The books in which the
coupons were pasted were discontinued IN 1879.
In September. last year, coupons amounting 70
S19,S30 were found uncancelled in CAROLS desk.
1t was found that they had been paid and they
were therefore cancelled. Afterward q number OF
coupons were found in the safe of the stock and
bond clerk that had only been cancelled once. Iney
were ordered cancelled by the witness. The Con-
troller was not informed of this discovery. Soop
afterward In making up the account to transmit to
London to pay the interest there it was found that
the amount was short $1,000. The attention OF
the Controller was then called to the matter and
an investigation ordered. When the first lot OF un-
cancelled coupons were found it was thought That
they were merely awaiting cancellation When
another lot OF Sll,OOO was discovered IL was felt
there was something wrong.
HIS theory of the defacatiOn was that the coupons
were first paid to the honest owners, but were not
cancelled and were then paid to the brokers to
whom they had been sold by Carroll under the
name of Bennett He dId not believe in the coun-
terfeit theory He had never heard of counterfeit
coupon or bond being discovered in the Finance De-
partment. The office is not bordering on demorall-
zation and there are sufficient number OF persons
employed in the Department TO perform the work.
David L. johnson, assistant stock and bond
clerk, testified that he assisted Carroll and In the
latters absence attended to his duties. He had
never discovered any irregularities, and if anything
family have noticed IT. The coupons as paid were
entered in q book opposite the number of the bond,
st b was waud
be at once discovered. He discovered the uncan-
celled coupons IN drawer with combination lock
in Carrolps desk after his death. Witness was
ordered to cancel them by Deputy Controller
Storrs. His theory was that the coupons were not
cancelled by Carroll and were sold by him to down.
town bankers and were by them presented and paid
q second time. He had never seen any indications
of counterfeit city bonds or coupons
The Commissioners of Accounts are about to
begin careful! examination of the accounts of the
Finance Department, including the issuing and
cancellation of bonds Of all kinds Controller
Campbell will probably return from Atlantic City
on Tuesday next. His health Is mach improved.
Asisoon Jas Recorder Smyth had taken his seat
yesterday morning in the Court of General Sessions
Simon Stevens. the foreman of the Grand Jury in
formed the Recorder that a letter had been received
on the 9th instant from Controller Campbell asking
that Investigation INTO the affairs of the Finance
Department be made by Tie Grand Jury. He asked
for instructions as TO the duty of the Grand Jury.
Recorder Smyth, In answering the request, said
% have already read TO the Grand Jury the sec
tons of the code defining the duties OF the Grand
Jury. II IS yOur duty TO inquire regarding all
crimes that may he committed in the county, and
of course you have right to make such an nvesti-
CATION as has been requested in order to find
whether any crime has been committed / would
make one or two suggestions. / understand that
there are now two nyestig cations going in regard
to the affairs of the Department referred TO. One
Is by the Commissioners of Account t. supplementary
to the one already made The other is by a COM
mittee of the Board of Aldermen. 1t is only
saTy 10 suggest that these Investigations require
the presence OF the clerks of the Department and
make II necessary TO produce books and papers to
such an extent that further Investigation at the
present time might interfere with the transaction of
public business. l understand also that the Con-
Toer Is at present out of town and will not return
until next week. / would only offer another sug-
geston. that an examination of books and papers
III large numbers would be necessary, II would be
well If your Investigation could take place in some
room in the County Court House the records need
not be removed from the building. Under all the
circumstances | would advise that action be de-
layed until some day-perhaDs Wednesday-of next