Reporter and farmer. [volume] (Webster, Day County, Dakota [S.D.]) 188?-1946, 1899-01-12

The following is a careful and faithful
summary OF Gov, Lees message, a very
long document, to the South Dakota leg
islature. The inances of the state, he
says, are in a healthy condition. During
the past four years the state has been
paying It's debts at a gratifying rate, and
the governor says, with prudent manag
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 ian 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 $1,000 from
liquor licenses. The total revenue col
lected in two years was 1905 24 AS. and
| disbursements SO, 405, SCOOP. Since Jan.
i, 1897, the debt of the state has been re-
duced 1854. sol. GO, and at this time the
net state debt is S73S, 800.
The governor severely criticises the
| state treasurer for not having sooner
paid S53, 800 Of bonds that were redeem
! able May l last, but which were not paid
off until Dec. /, while there was money
in 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 in 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 G.. Phillips. state treas
urer, who was o 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-
lating 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 mot one
| 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 Gen, Maris Taylor, pub
lie examiner, of an examination of the
books. of the defunct Dakota National
bank of this Acity, in which Treasurer
Phillips had state funds vi to the time
of its failure.
In this regard the governor says:
1.-The public examiner was prevented by
the receiver from making the eXamina-
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
terest on the public funds on deposit
there at the rate ofA4 per cent per annum
on the average monthly balance. The
accounts were changed abou' in a va
riety Of ways, but in every case the pup
| lie 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
- q H. 1~z ft,2 A,aAl, ne. Co. fsNn
yember Interest," The examiner sue
ceeded in finding in a vacant room in the
basement of the home of the receiver
among n mass of papers two of the cam
celed drafts issued by the bank to Phillips
sfor interest on the public funds, bearing
his Endorsement. The most sensational
part of the examiners report relates to a
manifest attempt ON the part of some one
TO hide the evidences of the crime by
erasures on the books. In a 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 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 I'm his
message recommends hat this matter be
investigated"
The governor estimates the total of tie
II dNh1 f0AhSt - ~ ~ RNAN - tS
urer i'm various banks the past two years
at S370.6TS.41, and computing the interest
at 4 per cent, which is the rate he re-
ceived from the one bank which had been
Investigated, he states that the treasurer
is now I'm default TO the state in the sum
of So. 653. sc on the interest deals. No
Part of the interest has been turned over
to the state. The law in tho matter is
very plain. "Other states have had TX
periences of this kind" says the governor.
1T is not a new condition with which We
are confronted. but it Is n matter which
cannot be ignored. The money received
as interest on public funds cannot be sep
arated fram the funds themselves. All
the money which may hav accumulated
by reason OF the deposit of public funds
in banks belongs to the main fund, and il
the books OF the treasurer do not show
that such money has been regularly COW
cred into the treasury the treasurer is In
default TO the state. In view OF the great
Importance of this matter / submit the
facts in detail and recommend that a
committee of the legislature be appointed
TO settle with the outgoing treasurer n
to fully investigate the facts which are
disclosed. i 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-
coyery of every dollar of money belong
| ing to the state winch N. VI. FnillpS may
have collected as interest or profits on
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 at 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
The amendment to the constitution pro-
yiding for state control OF the liquor
traffic submitted TO the voters by the last
legislative assembly. was ratified at the
polls at the recent election. and It there
fore becomes your duty TO make provi-
sions necessary for carrying out its ex-
pHcit intent by putting into operation a
dispensasy law, devised upon an economi-
cal and just basis. The people have
spoken, and 1t is Your duty TO give effec-
tive force to the popular will. regardless
Of the private opinions of those to whom
Is committed legislative W
The fellow ervant rule embodied In Sec
iion 1888 Compiled Laws In a radical In
Justice to railroad employees and servants
OF other industrial corporations whose
business require more or less hazard to