The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1898-03-23
CLEVER SWINDLE.
How the ST. Paul Banks Were De-
frauded so Successfully.

st. Paul, Mimi, March 23-Just how
great the loss through the government
time check fraud may prove cannot he
known until an examination of the
books of the engineering department
has shown which checks are good and
which are false.
About three weeks ago the local
banks which first became interested
through some Hartford, Conn, holders
OF the papers, began an investigation
ana became satisfied that the amount
OF checks out was far in excess of the
money appropriated by the government
10 carry on the work of the upper Mis-
sissippi river.
After several interviews with Southall
in which, it is claimed, that he tried to
prove that there was nothing in the
claims, it is said that he finally admit
ed that fully 25 per cent of the checks
that are now outstanding, are worth
To protect themselves, the banks at
once took the stand that the govern
ment having adopted a scheme for the
payment of the WOrkmen EMPLOYED bv
it that enabled an employee to defraud
the banks and other innocent purchas-
ers of the paper, it should be compelled
to stand the loss.
The filing of the claims of the banks
for the payment of the entire amount
of the checks, was made in Washington
with the result that the matter became
public.
j. H. Southan has been EMPLOYED by
the government for a period of more
than Is years, up to six months ago. At
that time he resigned the position of
chief clerk of the engineering depart
ment in this city, being succeeded by J.
D. Dushane.
1t was given out at the time that
SOuthall retired from the position of
clerk, that he had made cOnsidera BILE
money in a speculation in corn and that
he intended in the future to devote his
entire time to the stock market. His
duties. while he was acting as clerk,
were to keep the time as turned in by
the foremen, of the pay that was due
the wOrkmen, and in time to pay them
off in these time checks. The time
checks were often bought up in large
numbers by spectators, We're cashed
by banks and were held until the gov
eminent was prepared to meet the bills,
when SOuthall would receive a remit
lance direct from Washington and
would then deposit the money in his
own name and take up the checks with
his individual checks. By doing this for
a period of Is years, his signature be
came perfectly well known to all the
banks in this vicinity and his credit
with the government back of the paper
that he issued was considered as good
as a government bond.
OF the $500, 900 or $400, 900 worth of
time checks known to be outstanding.
probably less than One-fOurth was held
by banks, and some of this was held by
them for individuals.
Two local banks, which failed fifteen
months ago, held oyer 0,000 and near
ly as much more was held by a Hart
ford, Conn, bank.
One man in Wisconsin, whose name
could not be learned today. bought S64-
600 worth of these checks and $4,000
more had been taken as a good person.
al investment by a St. Paul capitalist.
In smaller amounts the time checks are
understood to be held all over the
country, and it will be some time before
the full amount can be learned.