Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1922-06-20
Kephart Tells of
Biz Secret Fund

Continued from Page One
terest alleged to have been lost to the
State on account of Kepharts alleged
manipulntions of State funds. Kephart
admitted the existence of the "revolv-
ing fund
~ called it n reserve fund" he said.
"and told Earl II. Dewald, deposit
clerk. I would use the checks of the
treasurer of Allegheny County for it,
Not to Appear on Books
He admitted that after he had es-
tnblished this fund he told Dewald to
clear these checks from the books SO
nobody would know anything about It.
Ex Justice Hull asked: You made
1t clear to him you wanted these funds
to disappear from the booksT
"NO, no; I told him not to have the
funds appear on the books. so | could
handle it myself.
"How much did that fund amount
to. $500 900 or $500. .0OO!'
Maybe more maybe less. 4"
"Did you use that fund after it had
been cleared from the books
81 don't recall. If the fund was out
there on the books the other fellows
would have it paid out before | got into
town.
Puzzle Over Checks
Who was the State politician who got
a $40, 900 check cnshcd at the Treasury
Department during the session of the
1921 Legislature?
Dewald. the bond clerk of the
Treasury Department, who cashed the
check, doesn't remember and former
State Treasurer Kcphart and Dewald
Nhn np1S t,N.n xtTn
about the "S2S. .OO0 disappearance
fund.-" which was kept for the con-
venience of legislators when they ran
short of cash.
The disappearing fund.- which fig
ured extensively in the quizzing by
the Treasury probcrs At the hearing
yesterday was kept in little linen en-
velope in safe in the Treasury Of
fee.
No books were kept and no records
were retained. The money was with
held from motor licenses fund turned
over by the State Highway Depart
ment and was not deposited to the
credit Of the State.
Dewald explained the 'method Of
bookkeeping was simple When n
legislator got hard up he appeared at
the Treasury office, got what he wanted
to tide him over. and gave his check.
The check was the only record. When
It was chased the money was put back
in the little linen envelope land there
were no records left 20 show to whom
It went or how long the money was out.
Dewald denied that the check for
$4,000 was held out seventeen days
before it was presented for payment at
the bank.
Kcphart frankly admitted yesterday
that as State Treasurer he made over
deposits of State funds in active deposit
tories, far in excess of the limit fixed
by law.
Overdeposits $4,000. 900
Once the over deposits totaled
s., 100000. The limit of all State
deposits fixed by law was $4,000, 900.
Kcphart testified the $4,000, 900 excess
was permitted with the knowledge Of
Governor Sproul and the Attorney
bonds to the amount OF 81 900, 900 had
been subscribed for by active deposit
tories after the State had failed to
dispose of them in the market. In
order that the loan might be success.
the fiscal authorities turned to the
bankers.
As to over. deposits in general, Keep
hart said he had been advised by Mr..
Schaffer, as Attorney General. that he,
the Treasurer, was personally respon-
sible for all money deposited in banks
over the legal limit and that if the
State suffered loss 1t would have to
be recovered from him or his bonds
men. In conceding the over deposits
he said in certain cases he had OBJ {.
tanned. collateral for the sum loaned
In excess of the legal rate.