The Kimball graphic. (Kimball, Brule County, Dakota [S.D.]) 1883-1905, 1899-01-14
GOVERNOR ZEE would
PROSECUTE PHILLIPS
Declares in His Message That the
treasurer Is in Default
10 the State.
LEGISLATIVE INVESTIGATION ASKED
Some 100000 Interest Dne the
State. the Governor Asserts.
Radical Taxation Rec.
concentrations.

Pierre, S. D., Jan. 4-Goyernor Lees
message was read in both houses of the
Legislature at 2 e'clnek this afternoon.
Governor Lees Message.
Governor Lees message is ~ very
long document. Acareful summary of
it IS given below.
The finances of the state, the gov
ernor says, are in n healthy condition.
During the past four years the state
has been paying its debts ut IL crafty
, /, ing rate, and, the governor says, with
! prudent management of state affairs
there seems to be hope that within
the next two years we may, ii 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 coli
lected in two years was So, 905,024.46,
and disbursements $3,4O5, 506.02. Since
January /, 1897, the debt of the state
has been reduced $554,5O1.63 and at this
time the net state debt is $773s 800
The governor severely criticises the
state treasurer for not having sooner
paid $685. of bonds that were re-
deemable May / last, but which were
not paid off until December 1, while
there was money in the treasury to do
SO all 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 100000, the legality OF
which is in doubt. This payment was
ut the suggestion of the governor
made last August.
Criticises Treasurer Phillips.
The most sensational part of the gov
errors 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 1t felony for
any public official Il make any profit
directly Or Indirectly out of any pub
|lcsfnnfls, nndsg1ysatte c6rfespSnaence
Observation-Disclosures and with the state
treasurer the past year relatingstOthis
He formally asked the banks for state
ments as to whether they had paid
the state treasurer interest OH the pub
lie funds on deposit and not 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 in full in his mes
sage the report of General Maris Tay-
lor, public examiner, of an examina-
ton of the books of the defunct Da-
kota National bank, of Sioux Falls, In
which Treasurer Phillips had state
funds up to the time of its failure.
In regard to this the governor says:
The public examiner was prevented
by the receiver from making the cN-
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 Oh the
public funds on deposit there at the
rate of 4 per cent per annnm on the
average monthly balance. The nc
counts were changed about in a 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 a va
cant room in the basement OF The
home Of the receiver among a mass OF
papers two of the cancelled drafts is
sued by the bank to Phillips for In
terest on the public funds, bearing his
L fsae5stment.n
ne m6st4sasaAiona part of the 5eS-
{AStstapts q some oaaesta
EffdS@ fhe Sytaence Sa crime by
erasures OF the Observation-Disclosures
Of instances the ACKNOWLEDGEMENTS the
record Of the draft sdraw1 for interest,"
I in 1.-The column whereait sh0uidsstate:
| The purpose for which the draft was
issued, has been erased recently These
erasures occur on the books only in
connection with drafts drawn to Phil
lips for interest on state money on
deposit. The governor in his message
recommends that this matter be in
yestigated.
Says Phillips Is in Default.
The governor estimates the total of
the daily average balance of the state
treasurer in various banks the past
two years at $370,87s.41, and comput-
ing tho interest ut 4 per cent, which
Is the rate he received from the one
bank which has been investigated. he
states that the treasurer is o in de-
fault to the state in the sum of s52.-
B53.s6 on the interest deals. No part
Of the interest has been turned over
to the state. The law in the matter
is very plain. "Other states have had
experiences Of this kind" says the
governor. ut is not a new condition
with which we are confronted, but it
is a matter which cannot be ignored.
The money received as interest on
public funds cannot be separated from
the funds themselves. All the money
Grand RECORDERS Report.