Evening star., 1900-05-09
NEELYS ALLEGED DEFICIT
1T IS AsCRIBED TO THE SALE OF
"sURCHARGED- POSTAGE STAMPS.
Post Office Department officials Ad-
NIT That There is an Element of
Doubt in the Matter.

There were no developments at the Post
ONCE Department today in the alleged en-
bezziement of postal funds in Cuba by
Charles F. w. Neely, chief of the bureau
of finance for the postal department in
Cuba 1t is now believed that IL there is
any shortage 1t is due to the sale of the
surcharged postage stamps which were
Gently ordered destroyed by the director
general Of posts. Those who have claimed
shortage insist that these stamps were
never destroyed, but were resold.
After the United States took possession
of Cuba and its postal system was intro
duced the Spanish stamps were retired. and
in their place the regular United States
stamps We're introduced, with the word
Cuba stamped in black ink across the
face of each. This was done pending the
adoption of a distinctive Cuban stamp.
When the new Cuban stamps were COM
pleted and sent to Cuba the surcharged
stamps on hand were all ordered to be de-
stroyed. 1t is claimed that some Of the
offices in Cuba have recently shown a
shortage in their receipts, and those who
charge that there has been embeZzlement
claim this shortage to be due to the sale
of the stamps which We're supposed 20 have
been destroyed. The Post Office Depart
ment officials are quite retcent the
matter. 1t is not that they desire to keep
anything from the public, but because they
believe there is an element of doubt If.
however as charged, Nicely is guilty. it is
believed that others are implicated, but
there is way of determining the amount
involved. 1t is known that several hun
dred thousand dollars worth of stamps
were ordered destroyed some time ago, but
there does not appear to be any direct evil
dence that any of these stamps were
tanned and resoid. Director General of
Posts Rathbone is in cable communication
with Postmaster General Smith and is con-
ducting a thorough investigation of the
charges.
The Post Office Department has report
from Agents Seybolt and Neal as to the
amount of postal revenues in the hands of
Neely on April D. At that time. accord
ing to these reports, he apparently
counted for all sums due the government.
and it is said by Post Office Department
officials that If Neely embezzled postal
funds he must have juggled the figures and
made false entries or else took the money
Immediately after the balance was struck
According to the figures at command here,
however, there is an apparent discrepancy
between the amount of postal order funds
as given by Mr.. Nicely and the amount due
the government. 1t was stated that he had
on April % $119.930. while the books here
indicate that he should have had approxi-
-mately S200,N0.
DiscIaimed Responsibility.
Beyond the fact that the War Department
is In nominal control of affairs in Cuba by
reason of its military occupancy it has had
nothing whatever TO do with the admins
tration of the postal service in that coun-
try. This statement was made at the War
Department today and was intended to
show that the War Department was in no
wise responsible for the recent frauds in
the postal revenues.
1t was explained that the Cuban postal
service was directly under the Post Office
Department and the postal officials We're
completely under its control All the Off
GERS and employees of the insular postal ser
vice We're appointed directly by the Post
Office Department with the single eXcep
ton Of the assistant auditor for auditing
the accounts of the department of post
Offices" who was appointed by the Secre-
tary Of War, upon the nomination, how
ever, Of the Postmaster General.
The incumbent of this office is Mr..
Reeves. who, 1t Is understood, has been
suspended from duty pending the result
of the investigation into postal affairs All
the Cuban postal officials report to the
Post Office Department aud receive their
Instructions from the same source. The
Cuban postal code was prepared by the
officers oc the Post Office Department, and
was simply promulgated by the military
governor. The latter was advised at stated
Intervals of the receipts and disbursements
of the Cuban postal service, and gave the
Information to the War Department in his
consolidated returns of the general rev.
enues and expenses Of the island.
The postal accounts were rendered by the
officers of the Post Office Department. and
had nothing to do with the details of the
administration of the postal service.
Col. BurtOn's Discovery.
The alleged shortage in the postal ac-
counts was discovered by Col. Burton of
the inspector generals accounts in the
course of a regular inspection Of the ac-
counts Of all the principal insuiar officials
and was Immediately reported to the War
Department, with the result that Mr..
Neely, the financial agent, was arrested
and other officers We're suspended pending
further investigation
Secretary Root said this afternoon that
there had been no further Developments so
far as he knew. and that he did not expect
to learn the details of the alleged fraudu-
lent transactions until Col Burton who
ic IA l.o