Custer weekly chronicle. [volume] (Custer City, S.D.) 1890-1931, 1899-01-14

Pierre, s. D., Jan. 4.-Governcr Lees
message was read In both houses Of th,
legislature at 2 o'clock this afternoon
Governor Lees Message.
Governor Lees message Is d very
long document. A careful summary Of
II is given below,
The finances OF the state, tie gov
ernor says, are in q healthy condition
During the past four years the state
has been paying it's debts at a crafty
ing rate, and, the governor says, witt
prudent management of state affairs
"there seems to be hope that within
the next two yenrs we may, IL disposed
be practically free from debt. This
change In state affairs has been due to
improved industrial economy of two
legislatures and the addition TO our
revenue of more than 100000 from
liquor licenses. The total revenue col
lected in two years was $3,o05, 024.46,
and disbursements $3,405, 506.02. Since
January /, 1897, the debt of the state
has been reduced 1854, sol. 63 and at this
time the net state debt Is 73S,300.'
The governor severely criticises the
state treasurer for not having sooner
paid $4,000 of bonds that were re-
deemable May 1 last, but which were
not paid off until December !, while
there was none In the treasury to do
40 MI the time. The state also on De-
cember rs paid Off $4,000 of state
bonds not due until 1910, being part OF
an issue of 500 900, the legality OF
which is i'm doubt. This payment was
at the suggestion of the governor
made last August.
Criticises Treasurer Phillips.
The most sensational part Of the gov
ernor's message relates to the receipt
OF interest on public funds on deposit
In banks by Kirk G. Phillips, state
treasurer, who was Governor Lees OPP
ponent in the late campaign. The gov
ernor quotes the clause in the constitu-
ton Of the state making il n felony for
any public official TO make any profit
directly or indirectly out OF any pub
lie funds, and gives the correspondence
he had with banks and with the state
treasurer the past year re'atinE to TINS.
lie formally asked the banks for state
ments as to whether they Ind paid
the state treasurer interest on the pub
lie funds on deposit and not ohe had
replied directly TO the question. Some
of them refused point blank TO make
any statement. Treasurer Phillips was
also asked for a statement, but did not
reply.
The governor gives i'm full in his mes
snge the report of General Maris Tay'
lor, public examiner, of an eXamina-
ton Of the books of the defunct Da-
ko;a National bank, Of his city, in
which Treasurer Phillips had state
funds up to the time of it's failure.
In regard to this the governor says:
"The public examiner was prevented
by the receiver from making the *
animation before election, but since
the examination has been made. lie
sets forth the record of the books OF
the bank month by month, showing
that the bank for twenty-one months
regularly paid Phillips interest on the
public funds on deposit there at the
rate OF 4 per cent per annum on the
average monthly balance. The nc
counts were changed about in n variety
of ways, but in every case the public
examiner was able TO trace the con-
nection between the public funds and
the issue and payment Of drafts to
Phillips. The bank books showed in
some cases the purpose OF the drafts,
such as for November interest The
examiner succeeded in finding in n va
cant room in the basement OF the
home of the receiver among n mass OF
papers two of the cancelled drafts Is
sued by the bank to Phillips for in
on the public funds, bearing his
Endorsement"
The most sensational part of the eN-
aminer's report relates to n manifest
on the part of some n TO
hide the evidence Of n crime by
on the books. In n number
of instances the entry opposite the
record of the draft drawn for interest
in the column where it should state
the purpose for which the draft was
has been erased recently. These
occur on the books only i'll
connection with drafts drawn to Phil
lips for interest on state money on
The governor in his message
recommends that this matter be in
v~estigated.
Says Phillips Is I'm Default.
The governor estimates the total OF
lie daily average balance OF the state
in various banks the past
two years ut $37O,67S.41, and comput-
ing the interest at 4 per cent, which
Is the rate he received from the one
bank which has been investigated, he
states that the treasurer is now in de-
fault to the state in the sum of S52,-
on the interest deals. No part
Of the interest has been turned over
TO the state. The law in the matter
S very plain. "Other states have had
experiences of this kind" says the
ut is not n new condition
With which we are confronted, but it
S n matter which cannot be ignored.
The money received as interest 'on
funds cannot be separated from
he funds themselves. All the money
which may have accumulated by rea-
ION of the deposit of public funds in
,anks belongs to the main fund, and if
he books of the treasurer do not show
hat such money has been regularly
into the treasury the treasurer
s in default to the state. In view Of
he great Importance of this matter, l
the facts in detail, and recon-
mend that a committee of the legisla-
ure be appointed to settle with the
outgoing treasurer and to fully invcs-
igate the facts which are disclosed. /
recommend that the legisla>
ure Immediately make available q !
Grand Recorders Report.