Waterbury evening Democrat., 1903-06-10
WATSON ARRESTED.
Audit Office Employee Is Charged With Dedication.
ESTIMATED S6O,OOO TO S75,OOO.
Amounts Deposited For Street Tm- provements by Railways, E1ec- tric Light and Telephone COm-
 pnnies illegally Retained.


 WASHINGTON, June 1O.-James NJ. Watson, Jr., q clerk in the office of the auditor for the District of Columbia and the son-in-law of 0 wealthy re- tired railroad contractor, has been ar rested on a charge of embezzlement or government funds. The amount is es- timated at from $60, ,00O to $75, 5,000. The warrant makes the specific charge Of embezzlement of $9,eO0, which repre- sents only portion of the alleged pee ulations. Watson was not bonded, and In case he or his relatives, several of whom are said to be wealthy, fail to make good the alleged losses Auditor '. T, Petty will be held responsible for khe amount The auditors bond is for S20,0OO. The money alleged to have been embedded was part of the funds deposited In the office of the auditor by property owners who are willing to pay half of all costs of improvements Rbutting on their property, such as paving sidewalks, alleys and streets.
 This embraces deposits by railway companies, electric light companies, telephone companies, for crossing side walks, for sewers and water mains and Is entirely separate from the other accounts This account is not subject to review by the treasury department, but it is checked by the clerk in charge of the corresponding account in the District department, and he reported it correct as late as February, 1902.
 The depositors, it is said, have the right to recover from the District through suit. The auditors office is under the supervision of the board of commissioners of the District of Co., lumbia. Auditor Petty has complete charge of the assessment and permit fund, depositing the money in bank to his own credit MT. Watson, it is al. legged, has been intrusted with making the deposits and has returned the pass book in apparently proper condition in each instance. He has been an en- ployee of the District for four years, and the alleged defalcations are sup posed to have occurred throughout most of this period.
 The discovery of the alleged shortage was made several days ago, but was kept secret by the auditor in the hope of securing restitution. The commits sioners of the District were made &C., quainted with the condition of affairs and at a special session demanded from Auditor Petty 8 formal report on the matter and an explanation of the system by which such large sum of money would be abstracted without earlier detection. The system is said to have been inquired into ten or twelve years ago, but no changes in methods resulted. Auditor Petty said that the accounts had been manipu- lated in such clever manner that he was not certain of the exact situation until yesterday.
 Watson was a joint publisher of a news bulletin issued in this city. Tn addition to running the paper, he owned a barber shop, which he has been trying to sell recently. He was the promoter of a patent medicine concern and the treasurer of what is known as the District Cooperative as- sociation, which takes in money from employees on deposit and lends 1t out again. Many of the oflceholders at the District buildings are depositors in the association, turning the money over entirely to Watson and getting his personal receipt in tiny books re- sembling bank books Several months ago Major Sylvester, the chief of po- lice here, investigated Watson's rec ord, and, it is stated, he found that Watson was sent to the Reform school while in his minority on charge of forgery.
 Watson's bail was fixed at $25, 900. The arrested man spent the night in a police station. Tn a long statement which he made Watson attributed the alleged shortage to careless bookkeep- ing and denied that he had been guilty of any embezxlement.