The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-03-23

cation was made. 1t was then discov-
cred that the time checks held by the
bank We're fraudulent and that Mr.
Southall was not in the government
employ.
The local banks We're questioned and
they then realized that they had been
VictimiZed. They made inquiries among
their Out-of-town correspondents, and
found that the entire state of Mime
sofa was flooded with the worthless
paper
Gross Fraud Discovered.
The result of these inquiries was
sent TO Washington and the war de-
partment officials sent agents to St
Paul 10 look into the matter. 1t was
very quickly shown that somebody us
ing Mr.. SouthalIs name was guilty OF
the grossest fraud.
The banks are not the only defraud-
ed ones. The government has also
been defrauded 10y the bogus pay rolls
under which the bad time checks We're
drawn.
! he banks say they Will hold the
government responsible for the fraud
uient paper. but the government Off
CialS at Washington contend it is not
responsible. They say the government
cannot be held liable for checks drawn
by one not in its employ. The govern
1nent, however, has case against
SoGthau for forgery and for obtaining
mu"eY on dummy pay rolls.
The ViCtimiZed bankers are not anX-
1ous 10 have their troubles advertised.
They say it is bad enough to have
hren caught by rogue without hay
ing it published. They blame the gov
eminent for authorizing the issue OF
paper Of that character and they de-
clare ii shows the existence of a dis
graceful state of affairs when the gov
err-ent of the United States has TO
ask credit from its Workmen. The sys-
tenn they say, invites fraud, and the
wonder is that it is not more wide
spread.
As Good as Gold.
, 1T is too bad" said a prominent
banker to a reporter for The Glob e,
that such thing should have been
possible. We looked upon Southalrs
time checks as good as gold, and this
* a great shock to US all. We shall
not know what paper to accept now,
for it is possible that we may be vic
timiZed again. Our confidence in all
such paper is shaken. To make things
worse. ii will be almost impossible to
separate the good paper from the bad
and as there is a great deal of it out,
much that was issued by Southall, it
will he impossible to determine which
Of 1t is genuine. OF course we consider
The government responsible for paper
issued by SouthalI during his connec-
ton with it."
There are very few banks in the city
that are not involved in the case.
If the bankers had taken the trouble
t. inquire at the engineers Office
whether the paper was good or not,
theY would have saved all this
trouble" said an official of the en-
gineer's department yesterday ''It
would have taken not more than ten
minutes for the fraud to have been ex-
posed. But no one came near US, and,
"a we did not know of the fraudulent
transaction, it went undiscovered. The
bankers showed little judgment in al
lowing the fraud to be practiced upon
them"
Hughes Pulls Out.
The firm Of Smith. Hughes & Co. was
dissolved last week by the retirement
Of Mr.. Hughes. 1t was reported yes
terday. that Mr. Hughes drew As,OOO
evening denied that
II put no money in the concern" he
said. and l drew none out l retired
because 1 was dissatisfied with the
manner the business was conducted.
Il was taken into the firm because I
am a telegraph operator. and Southall
and Smith wanted one who would take
a personal interest in the business. I
was To have a quarter interest and a
money guarantee. but was not to put
any money into the firm. The other
two were each to have three eighths
interest
But Mr.. Southall who was to put
5000 into the business, failed to do So.
For a while the concern did well, but
the promised was not Forthcoming, and
i was dissatisfied. Mr.. Southall spec
,Ulated in stocks. and lost every time
Che invested. Matters began to look
Shaky. | tried to ascertain how the
firm stood, but when 1 attempted to
examine the books l was prevented by
Smith. 1 never could get an idea of
nov the concern was getting along.
That convinced me that affairs We're
mot right. and last month 1 told South
all that if his money was not in the
concern by the first of March I would
get out. I said I did not want to be
connected with a firm that had no
money. and would not show its books.
He promised that the money should
HE paid in, but in the latter part Of the
month he lost a good deal Of money
by the slump of stocks caused by the
Cuban war scare and I guess he was
mot able to put in a cent. Then I noti-
fled my partners that would not con-
rtinue longer with them and they gave
me a release.
since TO let my friends know that my