424 



GEORGIA. 



my views of the true interests of the State, 

 and to my sense of justice to a public officer." 

 In his report he says : 



The committee have submitted the Treasury De- 

 partment to the closest scrutiny, and have ascertained 

 that the condition of the accounts, as shown by the 

 records and books, is satisfactory to the most exact- 

 ing. The method observed by that officer is calcu- 

 lated to secure correctness, and is at the same time 

 simple and easily understood. The funds of the State 

 have either been expended upon proper vouchers, or 

 have been at all times deposited in banks in conform- 

 ity to law. 



It has been demonstrated that the Treasurer has 

 spared no efforts at all times, and upon all occasions, 

 to protect the public interests confided to him. There 

 are two matters, however, which I deem proper to 

 bring to the attention of the House. 



On the day of the assembling of the committee, we 

 received from the Treasurer a communication, request- 

 ing the closest scrutiny of his department and of his 

 official conduct, whether the investigations be based 

 " on rumor or otherwise." After we had thoroughly 

 examined his office, his books, his bank accounts, 

 etc., and found everything in admirable condition, we 

 summoned him before us, and found him ready and 

 prompt to answer any and all inquiries. Among 

 other matters, he stated that, at the request of some 

 of the securities on his official bond, he had deposited 

 the public money in certain banks ; that these banks 

 were selected by him, with the approval of the Gov- 

 ernor, under the requirements of the law ; that they 

 were designated by his securities on account of their 

 recognized solvency, and because they would pay to 

 them commissions of from two to five per cent, on the 

 monthly balances of the deposits ; that these commis- 

 sions were received by the securities referred to, and 

 they paid a portion thereof, varying from one third to 

 one half, to him ; that he justified his course in this 

 particular under par. 8, sec. 92, of the Code, also un- 

 der par. 11, sec. 18, of the act of 1876, which, is but a 

 reenactment of the section of the Code alluded to ; 

 also under the resolution of December 8, 1871, which 

 is as follows : 



" Whereas, It has not been customary to require the 

 State Treasurer to pay into the Treasury interest on 

 the deposits of the State funds ; 



" Be it resolved^ That the Treasurer of the State 

 shall not be held liable for any such interest ; and be 

 it further resolved, etc.," directing the dismissal of 

 certain suits for such interest against the then Trea- 

 surer. 



The statement of the Treasurer, after searching in 

 every quarter in which light might be had, was not 

 materially affected. 



I would not be understood as endorsing this course 

 of conduct, but on the contrary believe it to be deserv- 

 ing of censure. It will be observed that sec. 92 of the 

 Code, reenacted in the act of 1876, declares that " the 

 Treasurer shall not, under any circumstances, use 

 himself, or allow others to use, the funds of the State 

 in his hands." In handling such large sums of 

 money as annually pass through the Treasury of 

 Georgia, under the very necessities of the case, large 

 deposits must be made in banks. The law itself, as 

 found in the Code and the act of 1876, contemplate 

 this course. The evidence does not disclose that the 

 Treasurer, in reference to the deposits, did more than 

 this. He deposited in certain banks, with the ap- 

 proval of the Governor, the funds in his hands, pre- 

 cisely as any business man or corporation would de- 

 posit. 



The law, in providing for such deposits, contem- 

 plates necessarily that the banks thus patronized 

 would use the money precisely as they use the funds 

 of other depositors nothing more, nothing less. 

 Were such not the case, we should soon have no 

 banks in which to deposit. The statement of the 

 Treasurer, together with the evidence taken upon this 

 point, fails to indicate or even to suggest that ho 



placed the public funds in any of these institutions 

 upon any other terms than those which impliedly at- 

 tach to all deposits. The fact that he received a com- 

 mission or percentage on the monthly balances does 

 not of itself add to the character of the deposits any 

 additional attribute of using himself, or permitting 

 ohers to use, the public funds. If he is in the latter 

 case within the prohibition of the statute, he is equal- 

 ly so though no commission or percentage be paid 

 him. It would seem that, to violate the law as it then 

 stood, there must have been some contract with the 

 banks in reference to the time the money was to re- 

 main in their custody, or as to the amount to be de- 

 posited, or as to some other feature which destroyed 

 the identity of the transaction with the ordinary 

 deposit. That a commission or percentage was paid 

 ipso facto did not vary the terms of the deposit, and 

 more emphatically is this so when the banks express- 

 ly agreed with the securities that no such result would 

 follow, but that such deposits were subject to the 

 check of the Treasurer at any and all times. 



When we add to this reasoning the resolution of 

 1871, passed by the first Democratic Legislature which 

 met under the Constitution of 1868, it is, to say the 

 least, a matter of grave doubt whether any law was 

 violated up to the adoption of the Constitution of 

 1877. That resolution says expressly that the Trea- 

 surer shall not be held liable for any interest on depos- 

 its. It is a legislative construction of the section of 

 the Code above alluded to. It is true that paragraph 

 five of the second section of the fifth article of the 

 Constitution of 1877 provides that " the Treasurer shall 

 not be allowed, directly or indirectly, to receive any 

 fee, interest, or reward from any person from the de- 

 posit, etc., of public funds" ; but it will be observed 

 that it is also provided that " the General Assembly 

 shall enforce mis provision by suitable penalties." 

 The present General Assembly is proceeding by an 

 appropriate act to enforce this provision, but the 

 Treasurer has long since ceased the receipt of any 

 commission. The evidence disclosed that he prompt- 

 ly discontinued the receipt of such moneys so scon as 

 his attention was called to the constitutional provision, 

 and long in advance of any investigation of his de- 

 partment. The last commission received by him was 

 about November 1, 1878. 



The second matter to which I desire to call atten- 

 tion is the payment to the Treasurer by Mr. Childs, 

 the President of the Northeastern Eailroad, of $247 

 for extra work done in endorsing the bonds and cou- 

 pons of such road. This is in substantially the same 

 condition as the commissions on the deposits. He 

 received 1J cent for each bond and coupon signed. 

 This amount had always been allowed by the State 

 to preceding Treasurers, the only difference being 

 that they collected that amount from the State, while 

 the present Treasurer collected it from the railroad. 

 It appears that the railroad authorities pressed him to 

 do this work with the utmost speed, and hence he was 

 compelled to labor late at night and early in the mom- 

 ing, out of office hours. The State has lost nothing, 

 and, if the transaction be objectionable, it can not hap- 

 pen again. There is not a particle of evidence that 

 the Treasurer forced its payment through the power 

 of his office. 



I desire to call attention to a few special instances 

 in which the Treasurer has shown great and constant 

 fidelity to the interests of the State, and his ability in 

 the management of her finances : 



1. In the change from the Fourth National to the 

 National Park Bank of New York, as the fiscal agent 

 of the State, by which an average 01 $2,000 per annum 

 is saved in commissions, etc., the latter institution 

 contracting to transact the business of this State for 

 no moneyed consideration whatever. 



2. In the gradual reduction of the amount of, and 

 rates of interest on, temporary loans, until this un- 

 healthy branch of the State's finances has been done 

 away with entirely, and the expenditures of the gov- 

 ernment so managed as to be covered by the regular 

 annual income from taxation. 



