The Hartford herald. [volume] (Hartford, Ky.) 1875-1926, 1921-07-27

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out discrimination, and to such Of
them which paid the highest rate of
interest, only a portion Of that
money was loaned in accordance
with the provisions of the statute.
For the purpose of circumventing
these provisions an ingenious
scheme was devised and closely ad-
hered to.
Daily Balances Probed
Beginning with the administra-
tion Of former Treasurer Small, the
daily balances of the State Treasury
were carried on the books under
two primary funds, one denomi-
mated as the vault fund and the
other as the safe fund.-
THE vault fund represented the
aggregate loans made to legitimate
banking institutions throughout the
State and was uniformly less in
amount than the safe fund. The
so-called safe fund represented
loans made to the so-called Grant
Park Bank which was formerly
private banking institution, which
absolutely ceased to function as a
bank after 1908.
Although this purported bank
was purported to be owned by a
single individual and did not trans
act any banking business whatever,
and had no depositor other than the
State of Illinois, yet it was given
huge deposits of public moneys by
two former State treasurers, Messrs.
Small and Sterling. The average
deposits of State moneys carried by
this purported bank we're 100000
000..
1.-THE evidence shows that money
was taken from the State treasury
in lots Of 100000 and
deposited in the so-called Grant
Park Bank, which thereupon issued
and delivered to the State Treasur-
err certificates of deposit for the
received, but without any
collateral security.
I'm other words, the only evil
dence of indebtedness and the only
security held by the Treasurer for
loans aggregating $10,O0O,000 were
paper obligations of a fictitious
bank.
Melted Large Profits
1.-THE moneys so received were
used in purchasing at discount
short time notes issued by Swift &
and Armour & Company,
two large corporations engaged in
the packing business in Chicago.
These transactions netted the pur-
chasers of the notes large profits.
'If any portion Of the profits SO
realized was paid into the State
treasury, it was less than per cent
'The evidence shows that most of
the banks receiving public moneys
paid into the State treasury on all
public funds during the administra-
lions of Messrs. Small and Sterling
was less than 2 per cent per annum.
The records of the treasurer's
office for July 10, 1919, illustrate
he manner in which the public
'unds have been handled. On that
lay the vault fund is debited with
1877. 900, of which sum $4.977,-
100 was deposited in approximately
800 banks throughout the State,
md 100000 in a private bank
ng institution; while the safe fund
vas debited with $4,000. 0OO."
Grand Jury Urges Probe
The grand jury recommended an
exhaustive investigation of the
Whole subject Of the handling OF
,ublic funds.
The jury asked to be permitted to !
xtend its investigation but Judge
smith, after expressing his belief in
heir honesty, discharged them, an
louncing that another grand jury
would be called September s.
Lieut.. Governor F. E. Sterling |
made the following statement to-
ay in connection with his indict-
nent:
II have never believed in trying
ases in the newspapers and have
o further statement to make at
his time, other than that have
iolated no law to my knowledge
nd will welcome an opportunity to
ieet and fully answer any charges
hat may be preferred against me
hen the proper time arrives" T