St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1885-07-12
MINNESOTA TAX LAWS.
An Able Discussion OF the Question
BY Examiner Knox.


The July number of Rhodes Journal of
Banking, which is one of the standard au-
thorities on finance in New York, will con-
tain an article written by Hon. H. N.
Knox, public examiner of Minnesota. in
relation TO the measure recently before the
state legislature in the shape of an act to
provide business check upon the funds
collected by the treasurers of the several
counties of the state. The article in ques-
ton was prepared at the request of the ed
tor of the Banking Journal, and is plain,
concise statement of measure framed for
the better protection of the funds in our
public treasures, which Mr.. Knox claims
are without any adequate check. The
funds in the hands of the eighty county
treaSurers amount to nearly $4,000, 600
yearly, of which over Sc, 900, 900 are from
collection of the tax levies, one-half a mill
ion from the sale of public lands, One-third
of a million from funds apportiOned by the
state for the support of common schools,
and the remainder from the sale
of county bonds for public buildings,
state appropriations for bridges and roads,
fines. licenses, interest on deposits, etc.
Mr.. Knox says that the total amount re-
ceived by the county treasureTS is increas-
ing at the rate of fully three-SOurths of
million dollars annually.
After explaining why the law provides
for the Office OF public examiner, because of
the frequent defaleations on the part of
county treasurers, Mr.. Knox proceeds to
point out the obstacles which were found to
be in the way of the working of any thor
Ough and effective system of accounts, and
which are inherent in the very structure of
the laws He quotes from the state law TO
show that it not only fails TO provide any
ada 70 ohaoI- Of
into the several treasures, but that it has
taken the check ont of the hands of the
county auditor, the only other coordinate
officer, and placed it in the hands of the
county treasurer, the very officer in
regard TO whose accounts the check
was necessary. The point made by
Mr.. Knox in these transactions is
that 1.-THE whole proceeding, so far as the
funds and the accounting for them are con-
cerned, is left solely and absolutely with the
treasurer" We quote from the article of
Mr.. Knox as follows: His (treaSurer's)
receipt to the auditor for the total amount
of the tax lists (sectiOn So makes a falla-
ciOuS show of protection, but cuts no figure
at all, as no charge to the treasurer is based
upon it. In fact this receipt if made at all
Is on printed page of the list itself, and
accompanies the book into the treasurer's
hands. The treasurer is ordered to collect
the money land place the same, when col
lected. to the credit of the proper funds"
and of course under the uniform, or any
correct system, to charge himself with the
same amount. The treasurer fills and gives
out the receipts, and is to return dupli-
cate of them TO the auditor (sectiOn
56) as the basis of that officers debit entry
to himself. The return of these duplicate
stubs is required, by the new system, daily
instead of monthly. The auditor is COM
manded by the same section to charge the
treasurer with the amount OF the stubs as
made out and returned by him, and without
any intimatiOn that he is to compare
them with the corresponding de-
scriptions and amounts upon the lists
which are in the treaSurer'S possession.
The treasurer holds all the data for such
comparison in his own hands during the
six months of the year in which, on ae-
count of the 10 per cent. penalty, very
large proportion of the taxes are paid.
Upon the return of the lists to the auditor.
on the 1st of June. and when an Oppor-
tunity is given for such a comparison, the
treasurer (sectiOn 69) is ordered to make it,
and the very structure of the language is
such as to relieve the auditor from response
bility i'm this regard, an opportunity which
he is not slow to accept.
After June 1, when the taxes are delin-
quent the auditor has possession and control
of the tax lists, and it might be supposed
that he could then charge the treasurer with
his collections of his own knowledge. But
the taxes are then paid upon staten ents"
issued by the auditor and handed to ''any
person wishing to pay Orredeem' (sectiOn sly.
The auditor has no means of knowing that
payment is made. In fact, great numbers
of these statements are applied for merely
for the information of the taxpayer himself
or of his nonresident principal. Hence the
return of the treasurer's duplicate is the au-
ditOrs first and only information as to the
payments, and hence his debit entry TO that
officer is based. as before. on returns made
by the treasurer himself, and not upon any
Independent knowledge of his own.
As to the payments into tine treasures of
moneys other than for taxes, the utterly I'M
guarded and inadequate provisions of law
viii appear by two quotations, viz:
when any money IS paid to the county
treasurer, excepting that paid on account of
taxes charged on the duplicate, the treasurer
shall give to the person paying the same du-
plioate receipts therefor. one of which such
persons shall forthwith deposit with the county
auditor in order that the county treasurer
may be charged with the amount thereof"
Chapter S, section $50, G. s., 1871
THE county auditor shall keep an accurate
account current with the treasurer of his
county; and, when any person shall deposit
with the auditor any receipt given by the
treasurer for any money paid into the treas
ury, the auditor shall file such receipt in his
Office, and CHI arge the treasurer with the
amount thereof" Section 140, idem.)
In this case the auditor is entirely de-
pendent for his check upon the mem
DRY and entirely voluntary offices of
any person making a payment into the
treasury. This person is himself protected
by the treaSurer's receipt which he holds.
Except as a citizen and taxpayer of the
county land he may not be either he is in
no wise personally interested further, and,
of course, should be charged with no
further responsibility in the matter.
From the quotations given it will be seen
that our laws are consistent at least III
this-that they entirely ignore. the funda-
mental principle upon which reliable
check can be based, viz: the necessary con-
cuTTence in it of at least two independent
persons. As the result. we have the Singu-
lar and entirely unprecedented anomaly in
bookkeeping, that by law the treasurer Is
made:
First-The collector of the money.
SecOnd-The only possible keeper of the
books from original data.
Third-The auditor of his own accounts.
As an expected and logical consequence
of this novel system, sired by legislation
and fOStered by quarter of century of
practice, experience confirms the truth of the
statement That the losses to the state by
peculation, errors and omissions are many
times greater than from the defalcatiOns
which the examiner act was devised to pre-
vent"
Mr.. Knox then proceeds to a discussion
of the statutory amendment which is pro-