The age-herald., 1900-07-26
NeeIy's Embezzlements Aggre-
 gate at Least $131,713.
THE GR0SSEST FRAUDS UNEARTHED
Rathbone Had Charged the Personal Expenses of His Family For Off, cial Expenses-Cuban Postmas-
 ter Was Also in Conspiracy

Washington, July 25.-The postmaster general has made public the report of As sistant General Bristow. who inspected the Cuban postal frauds. MT. Bristow finds that Neelys embezzlements aggregated at least s131,713, and says he was Justified in recommending the removal of Director General Rathbone. Whether or not the latter was guilty with Nicely In the embezzlements, he says, there can be no doubt that in the matter of unauthor- ized per diem allowances, personal ex- pehses and warrants cashed and unac- counted for, he unlawfully appropriated to his own use money of the Cuban revenues. For this MT Bristow says he believes MT. Rathbone should be required to answer.
 MT Bristow explains that the bureau of finance inaugurated by Director General -Rathbone of which Neely was appointed chief, was started July 2, 1899. This bureau was charged with the custody of all stamps and postal supplies. The division of postal accounts, changed July l, 1899, to a division of the auditors office, was in charge of Dr. w. H. Reeves, who was appointed by the Secretary of War.
 The report says that no accounts of the unbonded postmasters were required, re- mittances being entered as cash sales, and the only information the auditors office had of these transactions came from Nicely himself. There was no check whatever on his transactions. From the accounts ex- amined the report says the minimum of Neely's embezzlements may be summarized as follows Shortages as shown by his own records, $3O.6oO; excess of credit by de- struction of surcharged stamps, definitely ascertained, s1O1,113; total, $131,713. This will be increased by the discovery of addi- tional sales of surcharged stamps, but will not exceed $150.oOO in the aggregate.
 m Commission Appointed By Rathbone
 The report says that Rathbone appointed Neely, who had custody of the stamps; Reeves, the only man who could have a check on, Neely's transactions, and Dr. Warfield,s chief of the bureau of registra- tion, a commission to destroy the sur charged stamps of which Nicely had re- ceiyed $522,0 900, and that Nicely and Reeves entered into a conspiracy to report a larg- CT quantity of stamps destroyed than were actually destroyed. But, the report says, Neelys fraudulent transactions were not confined to those embezzlements, and while the amounts were small compared with the latter, they show the same official de- prayity and utter disregard for the instru- ments of the public service.'
 The connection between Nicely and the Nicely Printing Company of Muncie, Ind, ofIwhich he was proprietor before he went to Cubai is then explained. The alleged sale of the plant of this company. to
 
 port says, was not a bona fide transac- tien, as it is not believed Cowan ever paid Neely any money for his pretended inter est. Nicely ordered from this company sup plies for the department of posts in Cuba The books of the printing company show 1t received for printing $7,937, while the bills paid and the money order records at Muncie show $2,131 more than the amount indicated by the books as having. been paid Some of the bills were paid twice. Rathbone when asked why he approved these accounts, said he did not know un- til. after Neelys arrest that any printing was done at Muncie.
 Guilty of Gross Negligence
 If this statement be true says the report. he -convicts himself of the most utter and indefensible negligence of official duties The department of posts purchased from the Keyless Lock Company of Indianapolis s34, STA worth of furniture. This company paid Neely 8, ,292 in two checks, one of $2,- 072 and the other of $320. For what purpose this money was paid him does not appear. The only reasonable conclusion Is that 1t was paid as a commission" "subsidy" or bribe for the privileges of supplying the furniture.
 In July, 1899, the money available for salaries was delayed and at Neely's sug gestion Rathbone authorized a warrant on the unexpended balance for the fiscal year ending June 30, for $7,251. This sum was to be reimbursed after the July fund be- came available, but when Nicely obtained the warrant on the July fund, instead of depositing 1t he cashed it and made no &C., counting of the money.
 When Nicely was assigned to duty in Havana January T. 1899, his salary was s1,- S00 The report says he was at this time financially embarrassed. His account with he Union National Bank. of Muncie was frequently overdrawn. February 6, 1899, he sent a deposit of $329 to the Muncie bank, and In February and March his ad- ditional deposits aggregated $1,53O. Thus Nicely, with a salary of $50 month, was able within three months to deposit n, ,S59, conclusive proof that his embezzement be- gan in February, 1899. In May he deposited $S37; June, $775; July, $96S; August, SIS, ,125; October, s20250, and number of deposits of lesser amounts were made afterwards"
 Speculative Ventures
 The report deals at considerable length with the speculative ventures into which Neely branched out in Cuba. They included the West India Trading Company, in which he invested $12,500; brick plant, Havana. in which he invested $2O,OOO. and some mn- ing schemes in South America. The report says that C. M. Rich, who was brought to