The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1905-10-29
BANKS AT MERCY
OF GANG GREED
Pennsylvania Politicians Prey on
State Repositories, Trad
ing With Funds.
Nav York Herald Special Service.

New 9orK kteralu opeClai SeIsAce'
Pittsburg, Pa, Oct. 2S.-The failure
exposed the methods in which the funds
: of the state of Pennsylvania are drawn
from the depository banks. by ,politi-
clans to invest in their private schemes.
The state of Pennsylvania has at the
present time $6,000,000 in its sinking
fund and $10,0O0,000 in it's general
fund. These sums are given in round
numbers. AS is customary in all the
states, the treasurer deposits this money
in certain banks he designates as state
depositories and the banks pay per
cent interest. Il -. p. ......--.,
The sinking fund deposits are usually
time deposits, lat the deposits from
the general fund are open accounts,
subject to withdrawal at any time by
the treasurer. The state treasurer has
sole power to designate these deposit
tories. He picked out the banks and
sent such sums to them as he desired.
There has been no audit of the state
treasurer of Pennsylvania for forty
years.
Ordinarily the bankers are glad to
get this money. 1t costs them little
and can be turned over with good
profit. 1t is also a good Investment
For bank and especially one of the
smaller banks, to be known as a state
depository.
Gang Controlled Treasury.
The republican organization of Penn
svlvania, both before the rise and power
of the late Senator Quay and after
his death, has had control of the state
treasury. The state treasurer has al
ways been an organization man, willing
to take orders for his share of the re-
wards.
The gangs plan of operation is sim
pie. They have an agent, nominalIly
representing the state treasurer, who
travels over the state looking for banks
that shall be suitable Repositories. .
The agent makes two propositions to
the bankers who are about to be non
ored by the state treasurer. He is scru
pulous about getting the pei, cent
. legal. Then he asks for IL per cent
for himself and the gang, as a recog
milton for the honor and the use OF
the money.
He points out that the bankers cal
easily make from to 10 per cent BY
loaning the money: One per cent or
$14,o00,oOO is a tidy sum. Then he
state deposit shall loan money to GER
tain politicians, members Of the gane
on their notes. Truth of it, the gang
asks for the loan of part of the sun
the state has deposited with the bank
They get it, too, or the banks do not
get the state deposit.
-" System Rarely Varied. =
nth The gangs system FafGl Varied
and Went to them unblushingly. Thu
bankers were willing in most instance
and the gang had fat pickings. y
There has been no limit to the rapa
= city Of the gang. Once they got banl
in their clutches they did not let 60
They increased their loans by, the sim
pie expedient Of increasing the stat
deposits in banks where they. wer
operating and borrowing the increase
There rs no doubt in the minds of me
who know in Pittsburg that the SAINT
Fe Central railroad and the Pennsy
vania Development company wer
financed by Clark, the treasurer Of bot
companies, and cashier Of the bank.
It is stated here that railroad and d.
s velopement companies left with Clar
large amount notes signed in blan
and gave him all the railroad bonds the
had issued. Then it is charged thu
when money was needed in New Mexie
a draft was made. Clark filed out
note for the amount, put aside enoue
bonds to cover it as collateral and no,
ored the draft: These bonds are n,
listed, it is said. Williams denies tn;
there were any notes in the wrecke
bank. Pennsylvania Development COZ
pany men admit two notes aggregati1
$4,000 and say it will be paid at one
There is no doubt in the public mil
that the politicians did borrow lars
amounts; that Andrews enterpris
were largely. financed by Clark and tn
the Enterprise bank has been the hi
gest Of all the political banks in tt
state.