The Birmingham age-herald., 1903-06-10
Clerk in the Auditors Office Charged With Tak-
 ing $75,OOO
WATSON WORKED SMOOTH
 SCHEME ON DEPOSITORS
Son-ln-Law of Wealthy Railroad Con- tractor and Was Employed By
 District of Colum.

Washington, June 9-James M. Watson, Jr.. clerk in the office of the auditor of the District of Columbia. and the son. in-law of wealthy retired railroad con tractor was arrested today on a charge of embezzlement of government funds. The amount Is estimated at from s40O0O to $5,oO0. The warrant makes the specific charge of embezzlement of ss000. which represents only portion of the alleged peculations. Watson was not bonded and in case he or his relatives, several of whom are said to be wealthy. fall to make good the alleged losses, Auditor J. T. Petty will be held responsible for the amount. The auditors bond is for 10000.
 Deposited Funds.
 The money alleged to have been em- bezzled was part of the funds deposited with the auditor by property owners who are willing to pay half or all costs of improvements abutting on their property, such as paving. sewering. etc.
 This embraces deposits by railroad com- panies, electric light companies and tele- phone companies, and Is entirely separate from the other accounts. This account is not subject to review by the treasury department, but 1t Is checked by the clerk in charge of the corresponding account in the department. and he reported it cor rest as late as February. 1soz.
 The depositors, 1t is said, have the right to recover from the district through suit. The auditors office is under the supervis- ion of the board of commissioners of the District of Columbia. Auditor Petty has complete charge of the assessment and permit fund, deposlting the money in a bank to his own credit MT. Watson, it is alleged, has been entrusted with mak- ing the deposits and his returned the passbook In apparently proper condition fin each instance. He has been an en. ploye of the district for four years. and the alleged defalcations are supposed to have occurred throughout most of this period
 Discovery Kept Secret.
 The discovery of the alleged shortage was made several days age. but was kept secret by the auditor in the hope of se- curing restitution. The commissioners of the district were made acquainted with the conditions of affairs this morning and at a sepcial session demanded from Au- ditor Petty formal report on the mat ter and an explanation of the system by which such a large sum of money could be abstracted without earlier detection. They system is said to have been in- quired into ten or twelve days ago. but no changes in methods resulted. Audi tor Petty said today that the accounts had been manipulated in such a clever manner that he was not certain of the exact situation until today
 Watson Published News Bulletin.
 Watson was publisher of a news bulle- tin issued in this city. In addition to running the paper, he owned 0 barbershop which he has been trying to sell recent ly. He also was the promoter of patent medicine concern and the treasurer of what is known as the District Co-opera- tive association, which takes in money from employees on deposit and lends 1t out again Many of the office holders at the district building are depositors in the association, turning their money over en- tirely to Watson and getting his personal receipt in tiny books resembling bank books. Several months ago Major Syl- vester the chief of police here, investi- gated Watsons record and 1t is stated he found that Watson was sent to the reform school while in his minority on a charge of forgery.
 Watson's ball was fixed at $25, 900. which 1t was stated will be furnished tomor- row by several bondi lg companies with which arrangements te tha- effect win be made. The arrested man spent the night In police station. In a long state ment which he made to a reporter. Wat son attributed the alleged shortage to careless bookkeeping and denied that he had been guilty of an embezzlement.