The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-07-26

at the time HndHcldily euIpdIIdSoeu' hlS
account with the Union National Bank
of Muncie way frequently overdrawn
February 9th, 1899, he sent deposit OF
1929 to the Muncie Bank, and in Febru-
airy and March his additional deposits ag-
gregated 81, $50. Thus Neely, with sal
airy of $3.50 a month was able within three
months to deposit 81, 1859, conclusive proof
that his embezzlements began in Febru-
ary, 1899. In May re deposited 1897, June
$775, July 1868 August $13, ,125; October
800 250; and a number of deposits of les
ser amounts were made afterward."
The report deals at considerable length
with the speculative ventures into which
Neely branched out in Cuba. They in
cluded the West India Trading Company,
in which he invested $12, 500: a brick plant
at Havana in which he put $4,000, and
some mining schemes in South America
The report says that c. M. Rich, who was
brought to Havana as Neelys assistant,
told Rathbone in April that Neely was
''crooded.' Rathbone denied any such
conversation with Rich
The report continuing says:
"Rich claims to be innocent, but he at
least had knowledge of Neelys embezzle-
| ments long before he claims to have told
Rathbone. Reeves confessed that Neely
paid him $4,000 for concealng the fraud
in the destruction of the stamps. Both
Rich and Reeves protest against any
criminal designs. How much credit should
be given to their statements it is diff
cult to determine"
December 21st, 1898, when RathboIe
was appointed Director General of Posts,
his salary was fixed at $4,000. At his re-
quest the Postmaster General allowed him
per diem of S. in addition. He claim
ed this was not sufficient and on June
10Th, the Postmaster General increased
the salary to Sc, 500 with notification that
with the increase the per diem would
cease. July 3rd Rathbone complained
that the increase amounted to only $675,
and asked for an official residence This
was also allowed. December 10Th the
Postmaster General officially fixed Rath-
bones salary at S6,500, making it effec-
tive August 1st. But although the per
| diem was cut off Rathbone continued to
| draw it,
The bills rendered for furniture for the
official residence, the reports says, con-
| tain many items such as charges for
| trunk gloves, dog collar, overcoat, hats
| for coachman, boots for footman shirts
| for coachman, etc.
| When the character of these purchases
| became known to the Postmaster General
| he wrote to Director General Ratnbone
| as follows:
Il have today for the first time seen
certain of your bills as Director General
of Posts, which were brought here by
| Colonel Burton. Some of these bills are
without authority or Justification but
are scandalous, and never should have
| been passed or paid. The auditor, who is
| responsible to different department. was
| inexcusable in allowing them and your
action in presenting them for allowance
| was grossly reprehensible. Without
| waiting for q review and roconsidera-
| tien of these bills by rightful audit,
| you should at once reimburse to the island
treasury the sums thus improperly paid"
Rathbone made numerous trips. In
| April, 1S99 he made a tour of inspection
| accompanied by his family and his eX-
| pense account covered the entire expense
| of his family. In May of the same year
| he came to the United States and charged
| up as official expenses his expenses to
| Cincinnati and Hamilton, Ohio, where he
| went on private business. The report
| says Rathbone was aware at the time
| that these charges were unauthorized and
! fraudulent" In November, 1899, when his
| family were in New York he charged 1896
| for eight days in New York while waiting
| for a steamer.
The report also calls attention to war
| rant for $500 drawn by Rathbone June
30th, 1899, for which no accounting was
made, and another $500 warrant drawn in
May of the same year. 1t says:
From the official records it appears
| that Rathbone has drawn warrants to
| himself in the sum of $500 each, received
| the money thereon and made no ac
| counting whatever for the same to the
| Department of Posts. There stands
against him therefore, the charge of un-
! lawfully appropriating $1,000 of the Gu
| ban postal funds to his own use"
The report also calls attention to many
| large expenditures by Rathbone for which
no vouchers were filed although they could
| have been easily obtained. For some
months miscellaneous expenditures ag-
| gregated as much as $3.50. such items as
| Repairs, $780, Freight $450," appear.
| Reeves explained that he passed such ac-
| counts because they had been allowed by
| the Director General. The report does
i
not credit this statement, saying "thc
| evidence is too strong of collusion be-
| tween Nicely Rathbone and Reeves" II
| says:
| General Rathbone has been engaged in
| the government service many years and
| knows that such method of presenting
| bills and such expenditures are wholly un-
| warranted and bear the strongest evil
| dences of corruption. Therefore, for him
| to approve such accounts renders him
| equally guilty with Neely. The total
| amount of these miscellaneous eXpendi-
lures was S. ,290. part of this was prob
| ably legitimate but a large part were
doubtless fraudulent expenditures, for
which Rathbone, Nicely and Reeves are
equally responsible.
The report finds that Rathbone's ex-
penditures in the payment of debts and
living expenses were much in excess of
his salary; that in September and Octo-
Der, 1899, within thirty days after the de-
struction of the surcharged stamps,
Rathbone paid over So, 900 Indebtedness. In
discussing this subject the report says:
"It is evident that the money with
which this Indebtedness was paid was Sc
cured from some other source than his
salary"
The repOrt closes as follows.