The San Francisco call., 1908-05-27
$37,572 TAKEN
AWAY FROM THE
CITY TREASURY
Witness Says Full Amount OF
Protested Tax Was Paid
Treasurer
Deputy County Clerk Greif
Called From Yosemite to
Tell OF Transaction
Receipt of Book Keeper May
Bind John McDougaId to
Make Shortage Good

The sum df S37,572. representing
taxes paid under protest in 1908 by
the United Railroads, is missing from
the city treasury and there is not the
slightest trace as to where it has
gone. Several theories have been ad-
vanced to account for the disappear
ance OF the money, but none of them
leads to solution of the mystery. All
that positively is known is that there
is a shortage in the treasury and that
the deeper the investigation egoes the
more bewildering becomes the situa-
ton.
In 1903 the state board of equaliza-
ton assessed the holdings of the
United Railroads at a figure much
lower than that fixed by assessor
Dodge, and the corporation contended
that 1T should be allowed to pay taxes
on the states valuation. Dodge OBJ
lected to the boards figures being ac-
cepted and the dispute was eventually
carried into the courts to obtain a
'Sufing as to what assessment should be
used by the tex costertor,s asess
The suit was stir undecided when
the taxes were about TO. become delin-
quent. ami 5tos avoid the possibility. of
the penalty for delinquency being
added, the United Railroads deposited
under protest, in Judge Seawelrs court,
a check for s364.572.79. which repre-
sented the amount due under the Dodge
assessment
PAYS PART OF TAX
The legal representatives of the
United Railroads stipulated in court.
November 80, 1903. that s133.o0o. th.
states portion of the taxes under the
equalization board valuation, should be
paid to E. p. Colgan, who was state
controller, and sl94,000, the citv,s
share, to f. J. Smith, then tax col
lector. but who is now serving a term
IN the penitentiary for robbing the citv.
Inc difference between the stipulated
amounts, $S757279. represented the
sum that would be due the United
Railroads If the court decided that the
equalization boards assessment, Instead
OF the Dodge valuation should stand
1t is this protested balance that is
gone.
All the testimony secured in the in
vestigaticn now under way tends to
show that the check was deposited with
City Treasurer McDougald bv Depufy
County Clerk Greif, in the presence of
Tax Collector Smith, William Brobeck.
then city attorney; the district and
city attorneys of San Mateo who were
interested I'm the states portion of tne
money. inasnluch as the United Rail-
roads also operates in that county. and
Chief Deputy State Controller Douglass.
Douglass remembered the transaction
and said that Smith gave him a certi-
fled check for the states share of fhe
money to save him the trouble of carry
ing the gold TO Sacramento. Douglass
thinks that McDougald, his chief dep
uty. Louis Devote, and Cashier C. 3.
Perkins were present.
CITY WINS DECISION
Judge Seawell who tried the suit
finally decided in favor of the city. and
the corporation appealed to the SUI
preme court. Last March Seawelrs de-
cision was upheld and a few DAYS ago
remittitur was sent down to the
county clerk announcing ..the saffirma-s
tion of the decision Cashier McCaha
OF the tax collectors office imnadi-
ately secured an order from Judge Sea
well directing that the protested money
be turned over TO the tax collector
who would account to the state for its
share OF the balance. Book Keener
Tomalty of the treasurer's Office tI,en
credited the. tax collectors fund with
s37.5f and re-entered that amount as
Withdrawn from the county clerks spe-
cial fund. He also gave the tax col
lector q receipt for $3I,572. the same
as jf there had been actual denosit
of that amount of money. A, little
later Tomalty, in drawing the specia !
fund Of the county clerk. discovered
that with the s37.512 withdrawn from
it there would be a shortage of an
proximately that amount and that he |
would not iraye money enough to nav |
demands drawn for unassigned deposits |
made pending the outcome of other
suits begun since the fire. To,naltv
at once asked for the return of the |
receipt given to the tax collector and |
being refused. went before Judge Sea
we'll and obtained an order STAYING the
of any part of the money |
credited to the tax Office. The CITY
attorney next took a hand in the con
troversy and yesterday had the order
staying the tax collector from usinr /
the money set aside. Long saws thai !
the city and state are entitled to tha
money and that it must come from
some source. The receipt given by To |
nalty for McDougald will it is sail,
bind the treasurer to make good tbe |
il the money cannot be To-
cated.
EVIDENCE is DESTROYED
All OF the treasurer's books save
l trial balance, were destroved. ~, fb;e
ire and IN consequences there is no
written evidence that the original I
heck ever reached the treasury. There I
s the testimony OF Douglas and Others. I
Continued On Paxe =. Celnw -