Evening star. [volume] (Washington, D.C.) 1854-1972, 1903-06-10

Rank. and a prominent local capitalist;
Charles b. Church of 800 11th street south
west, q retired business man, and George L.
Deering, deceased. Mr.. Deertng died only
n few months ago. He was retired con-
tractor. Mr.. Petty Is said to have been
most pleasantly treasured by his surviving
bondsmen.
In examining Watson's papers this morn
ing the District authorities found an en-
velope marked ~. NJ. A. Watson. Per-
sonal" Inside they discovered checks sign
ed by Auditor Petty amounting to nearly
$4,000. Some We're Cancelled checks. and
some had not been cashed. One Of the lat
ter was drawn by the auditor in August,
1901, and made payable in the indorsement
to the collector of taxes Mr.. watson nau
scratched a pen through the name OF the
collector. 1t Is impossible as yet to tell
just how far his operations have gone II
will require weeks to learn the extent OF
his clever manipulationS.
1t is not even known as yet just what
special funds are the chief sufferers from
his populations. There were three classes
of accounts handled by Watson and the
system of checks in use In the ONCE Is saio
TO be so lax that the matter has got into
a deplorable condition. The best estimate
Mr. Petty could give Commissioner West
this morning was $4,000. AT one time IL
was thought the amount was S3,Uo. II
may go up or down. as matters develop.
In his conference with Commissioner West
this morning. Auditor Petty admitted that
he had not required bank return from
Watson when the latter had taken funds to
deposit The collector of taxes when send
ing money to the treasury receives In re-
turn q cash ticket, and later a more COM
plete acknowledgment from the treasury
officials. Mr.. Petty did not require such
memorandum from Watson.
Commissioner West asked him IL he kept
close watch on the entries in the bank
book. Mr.. Petty said he did not. He as
sured Commissioner West that he had I'M
plicit confidence in Watson that he knew
p I, haHyin hnar an
the reform school and was not acquainted
with the rumors that had been floating
about as to where Watson got It IL
was then that Mr.. Petty declared he as
sumed entire responsibility. 1t seems that
Mr.. Petty is the only official upon whom
the loss will fall, although certain class
of depositors may sue the District
The Deposit Fund.
Perhaps the most vitality interesting point
to the taxpayers is the character Of the
funds from which 1t Is now believed that
Watson took the money. The first of these
is what is known as the deposit fund
This fund Is created by deposits from the
street railroad companies. telephone ana
telegraph companies and plumbers. They
deposit a given amount estimated by the
District engineers, to cover the cost OF
putting the street pavements In proper con-
dition after they have finished their un-
derground construction Each plumDer IS
making a cut in street pavement. In
the case of railroad and telephone COM
panies the amounts deposited are very
large.
recently The Great Falls and Old Domin-
lon Railroad Company which recently Sc
cured permission to lay a street car track
across the Aqueduct bridge. deposited only
a few weeks ago the sum Of $4,000 with
the Commissioners to cover the cost OF al
terations to the bridge. Mr.. A E. Randle,
president of the East Washington Heights
Railroad Company, deposited the sum OF
"a 900 for laying tracks across the Pennsyl-
vania avenue bridge over the Eastern
branch.
This money was not turned into the
United States treasury. 1t was paid into
the office Of the collector of taxes on esd-
mates made by the engineers. The collec-
tor kept the money separate from the tax
accounts and deposited 1t in a private bank
When charges were to be made against
this money the auditor drew a warrant
on the collector OF taxes and placed the
amount so drawn to his credit In another
private bank. Mr.. Petty would then make
payments from the fund on his personal
check with Auditor d. c." under his sig
nature.
Watson had complete charge of this
money and so manipulated 1t that he drew
out of 1t at will. The average collections
for the fund amount to about $40 900 yearly.
but of late this has been largely increased
The deposit fund was not created by law
of Congress. The plumbing deposits were
prescribed by the Commissioners In the
plumbing regulations while the deposits
of the railroad companies and others Tor
repair of pavements is an office practice
of the engineer department approved by the
hoard of Commissioners. The manner IN
which the funds are handled was also pre-
scribed by the Commissioners, although
they, of course left the bookkeeping and
auditing arrangements in the hands of the
under officials
1t is from this fund that it Is believed
the heaviest drafts were made. Counts
soner West stated today that he under
stands an effort was made two years ago
to have the Treasury Department handle
these funds but at that time, 1t Is under
stood the officials declared they preferred
not to be bothered with the trust account
There have been instances, however,
where the treasury has acted as bank for
the District. and an effort will now be
made to have the treasury take the money
in the future.
There is no reason. though" declared
Commissioner West. why the money
should not be handled here if the proper
safeguards were thrown about it and the
accounts kept In a stricter manner"
Mr.. West said he admitted that he did
not know until the developments of yester-
day that any money whatsoever was ham
died in the auditors office. He though that
this office simply passed vouchers accounts
and the like and kept strict lookout on
the expenditures of the other departments.
Mr.. West said he had left the auditors
ONCE untll the last TO investigate into its
methods. He has gone into the practices
of the other departments assigned to him
since he qualified as Commissioner and
was about to reach the auditor when the
exposure came.
Whole Cost Fund
The second fund from which 1t is believed
that Watson has taken large amounts Is
what Is known as the whole cost fund.
This fund is created by the deposits of citi-
zens or corporations who are to pay the
entire cost of an Improvement
For instance. one of the checks found III
Watson's desk today was for 1919. drawn
on deposit by the Capital Traction Com
pany and Bernard r. Green, who had re-
quested the construction of catch basins In
certain sections of the city which the car
lines reached. The whole cost fund is
separate and distinct from the half-and-
half permit and assessment fund The
whole cost money is handled entirely by
the collector OF taxes and the auditor. while
the half-and-half money Is handled through
the Treasury Department.
In making a whole cost deposit the citt-
zen desiring the work has an estimate
made in the engineer department and de-
posts the amount named In the slip In
the office of the collector of taxes The
collector puts the money in a private bank
as In the case with the deposit fund de-
scrtbed above. and turns it over to the
auditor from time to time as reouiSitfons