The Washington times., 1903-06-10
Prisoner Valves Preliminary Hear
ing in the Police Court-Bail
Fixed at Thirty Thousand
Dollars.
TREASURY DEPARTMENT
STARTS INVESTIGATION
Officials From Department De-
mand Access to Books in Audi
tors Office The Defalcation
Known Since Saturday.

j. NJ A. Watson. jr, clerk in the Of
fee Of the District Auditor. was arraign-
ed in the Police Court this morning
pleaded not guilty to charge Of en-
bezzlement from the District funds.
waived preliminary hearing. and was
held to await the action OF the grand
jury. Bail was fixed at $50 COO
Treasury to Investigate.
The United States Government took
hand today in the scandal of the Au-
ditor's Office caused by the alleged de-
faication of Watson. II was feared az
the Treasury Department when thu
amount of Watson's thieving was learn
ed that money belonging TO the United
States might be involved. and the Audi
tor for the Treasury directed that a
thorough investigation Of the accounts
OF the District Auditor be made
Accordingly, 7 A Hodgson. clerk in
the Office OF the Auditor for the Treasury,
appeared at the District Building this
morning. and requested access TO the
books OF Auditor Petty. Mr. Hodgson
was Joined later in the forenoon by
another Treasury expert, and the two
were busy through the day examining
the accounts and checking them with
the entries in the Treasury books It Is
not known that Watson took any money
that should have been credited to the
United States Government, but the fact
is suspected, and 50 strongly suspected
as TO warrant the examination OF The
books by Treasury experts
The District Commissioners were ear
iy in their offices this morning and i'm
mediately went into board session to
consider the affairs OF the Auditors Of
fee On motion OF Mr. West the Board
suggested that the bail of Watson 1t his
preliminary hearing in the Police Court
should be $40, 600. The Commissioners
thought this a sufficiently small bail in
view Of the large sum taken from the
District funds, that amount being now
placed at $65, 600
The Commissioners also directed the
Auditor 10 place before them all the
facts connected with the defalcation. in
Guiding his accounts and the statements
received from the banks covering the
transaes*ens OF the embezzling clerk
from the beginning. The Commission
ers propose TO thrash out the facts and
learn how it possible for one man
to take so large a sum OF money without
being caught. The Auditor has been
called upon TO make this point clear,
without concealment or evasion
AlonZo Tweedale, deputy auditor, to-
Gay described how the defalcation was
made, and why it was the department
knew nothing about it until Watson's
Irregularities were stumbled upon in the
routine work OF the Office 1t appears
ttst the fund accruing from the deposit
of various amounts for assessment and
permit work is one which had TO be
handled separately from other funds
used by the District.
II could not be turned into the United
States Treasury and checked out again
ON the principle that payments can he
made from the Treasury only on ap-
preparation properly vouched for Az
a consequence this fund had TO be kept
in the local banks Vouchers for ii were
passed between the offices of the Collec-
tor of Taxes and the Auditor.
Accounts in Three Banks.
It was in the disbursement OF the fund
that Clerk Watson was able TO effect
his stealings. The money has been kept
in three banks. Portions of il from time
to time in the shape of payments for
public work were transferred to the
Treasury on the check of the Auditor.
BY holding up several thousand dollars
worth of these checks Watson was able
to keep his bank books straight, Then
by a skillful transfer OF money from one
of the depositing banks TO another he
was able TO steal a portion and cover
the omission by false accounts.
Mr. TweedaIe explained that a new
system of accounts had been put into
operation in the Auditors Office when he
became deputy auditor. last July. The
rev system was applied first to the reg
LIar transactions of the District Offices
coming under the disbuI sing officer.
About two weeks ago Mr.. Tweedale be-
gan the work of bringing under the sys-
tenn the division of assessment and per-
nit work, of which Watson was In
charge.
In examining the accounts voucher
for s.. .0O9 was found for which there was
no corresponding check Search was
made for the missing check. and not
finding it in the files the desk Of Mr.
Watson was opened. and in envelopes
marked private several thousand dollars
in checks were found that should have
been deposited in the United States
Treasury. These were unpaid and un-
cancelled. and were held out simply for
the purpose of aiding in keeping the
bank accounts balanced.
No check was found for the IS, ,009-