The pioneer press. (Miller, Hand County, S.D.) 1893-190?, 1899-01-12

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summary of Gov. Lees message. a very
long document, to the South Dakota leg
stature. The finances OF the state, he
says, are in a healthy condition. During
the past four years the state has been
paying its debts at a gratifying rate, and
the governor says, with prudent manage
ment of our affairs, there seems TO be
hope that within the next two years
we may If disposed be practically free
from debt. This change in state affairs
has been due to improved industrial con-
ditions better administration, the econ
omy OF two legislatures and the addition
TO our revenue Of more than $4,000 from
liquor licenses. The total revenue col
iected In two years was $3,9O5, 02i. AZ, and
disbursements S3.4o5. 50602. Since Jan.
J. 1897, the debt Of the state has been re-
duced SOL g. and at this time the
net state debt is S73S, 800.
The governor severely criticiSes the
state treasurer for not having sooner
paid S53 300 of bonds that were redeem
able May l last. but which were not paid
off until Dec. l. while there was money
Jp the treasury to do so all the time.
The state also on Dec. % paid off $4,000
of state bonds not due until 1910 being
part of an isue of 100000. the legality
Of which is i'm doubt. This payment was
at the suggestion of the governor made
last August.
The most sensational part of the gov
errors message relates TO the receipt OF
interest on public funds on deposit in
banks by Kirk CT. Phillips, state treas
urer, who was Gov. Lees opponent in the
late campaign The governor quotes the
clause in the constitution Of the state
making it "a felony for any public official
to make any profit directly or indirectly
out of any public funds, and gives the
correspondence he had with banks and
with the state treasurer the past year re-
laiing to this. He formally asked the
banks for statements as to whether they
had paid the state treasurer interest on
the public funds on deposit and not one
had replied directly to the question.
Some OF them refused point blank to
make any statement. Treasurer Phillips
was also asked for statement but did
ny reply a9vsrror owes IN fuu IN n,s mes.
sage the report OF Gen. Maris Taylor, pub
lie examiner, OF an examination of the
books of the defunct Dakota National
bank OF this city, in which Treasurer
Phillips had state funds up to the time
of it's failure.
In this regard the governor says:
''The public examiner was prevented by
tho receiver from making the examlna
ton before election. but since the eXamin-
alton has been made. He sets forth the
record of the books of the bank month by
month. showing that the bank for twenty
one months regularly paid Phillips in
there at the rate of per cent per annum
on the average monthly balance. The
accounts were changed about in a va
siety of ways but in every case the pup
Sic examiner was able to trace the connec-
ton between the public funds and the is
sue and payment of drafts to Phillips.
The bank books showed in some cases the
purpose or the drafts such as for mo
vember interest" The examiner sue
oeeded in finding in a vacant room III the
basement of the home of the receiver
among a mass of papers two of the cam
Neled drafts Issued by the bank to Phillips
for interest on the public funds, bearing
his Endorsement. The most sensational
part of the examiners report relates to
manifest attempt on the part of some one
70 hide the evidences of the crime by
erasares on the books. In a number OF
Instances the entry opposite the record OF
the draft drawn for interest in the
column where ii should state the purpose
for which the draft was issued. has been
erased recently These eraaureS occur on
the books only in connection with drafts
drawn to Phillips for interest on state
money on deposit. The governor In his
message recommends that this matter be
investigated"
The governor estimates the total of t!.a
daily average balance of the state treas
urer i'm various banks the past two years
at IOG7S.41. and computing the interest
at per cent, which is the rate lie re-
ccived from the one bank which had been
investigated he states that the treasurer
Is now in default to the state in the sum
of So 653.SC on the interest deals. No
Fart of the interest has been turned over
20 the state. The law in the matter is
very plain. "Other states have had ex-
periences of this kind" says the governor.
1T is not a new condition with which we
are confronted, bat IL is Il matter which
cannot be ignored The money received
as interes. on public funds cannot be sep
arated from the funds themselves. All
the money which may have accumulated
by reason OF the deposit OF public funds
in banks belongs to the main fund, and IL
the books of the treasurer 10 not show
that such money has been regularly COW
cred into the treasury the treasurer Is in
default 10 the state. In view OF the great
Importance of this matter ] submit the
facts i'm detail and recommend that
committee of the legislature be appointed
10 settle with the outgoing treasurer and
TO fully investigate the facts which are
disclosed. / further recommend that the
legislature Immediately make available a
reasonable appropriation TO be used by
the attorney general In prosecuting the
treasurer and his bondsmen for the re-
covery Of every dollar of money belong
ing To the state which X. G.. Phillips may
state funds and converted to his own
use"
1t is with pride that I direct your at
tention to the initiative and referendum
which have been engrafted into our con-
stitution. and now demand detailed provi"
sion al your hands for carrying them into
effect South Dakota has the enviable
distinction Of being the first state in the
Union to adopt direct legislation.