The herald and news. (Newberry S.C.) 1903-1937, August 25, 1905, Image 1
VOL. XLII. NO. 106 NEWBERRY. S. 0.. FRIDAY AUGUST 25, 1905. TWICE A WEEK. $1.50 YEAR
COMMITTEE MEETS
AT COLUMBIA
FINANCIAL CONDITION OF
STATE DISPENSARY.
Ex-Commission Mixson Testifies
About Attempted Bribes-Com
missioner Tatum Makes
Suggestions.
Financial Statement
Of the South Carolina State Dis
pensary, March 31, 1905:
Assets
Cash balance March 31, 1905, $75,
365 36.
Teams and wagon, $64 oo.
Supplies, as per inventory, $29,173.
Machinery ani office fixtures, $6,
328 56.
Real estate, $52.860 56.
Merchandise as per inventory,
stock at dispensary, $368.o68 81.
Suspended accounts in process of
settlement. $5,694 72.
Merchandise in hands of dispen
sers, March 31, 1905. $388,899 53.
Remittances in transit to State
Treasurer, uncollected, R. R. Claims,
etc., $65-773 72-8454.673 25.
Personal accounts due State for M.
T. bbls, alcohol, etc, $10,817 37.
Total assets, $1,003,045 68.
Liabilities
School fund. $442,676 40.
Personal accounts due by State for
supplies, whiskey, wines, beer, alco
hol, etc., $560,369 28.
Total liabilities, $1,003,045 68.
Note from committee report:
Liquor Ibought but not delivered,
$299,679 SO.
The Columbia correspondent
to the News and Courier says
that the above is the financial state
ment of the State dispensary. It was
madO- up at the dispensary, by the au
th ities of the dispensary, and was
taken from their bpoks. It is official
and business men will no doubt be
oe much interested in the figures here
presented. It will be noted by ref
rence to the evidence that is being
taken by the commitree that the vari
ous items are being explained in de
tail and how they are made up and
computed.
The element of "skillful sophistica
tion" in dispensary liquor was an in
teresting phase of the investigation
Tuesday. It was an expression of the
State chemist and it applies.to a good
many things these days. The inves
tigating committee had a long session
Tuesday. The special purpose of the
~hearing was to receive the facts anid
figures collected by the sub-commit
tee charged with the investigation of
the financial and business affairs of
the dispensary. This committee con
sists of Messrs. Arthur Gaston, of
Chester, and D. A. Spivey, of Conway.
A mass of figures and intensely in
teresting data was presented and now
This committee is undertaking to de
velop the significance of th'e.se tables
and figures. There is meaning in
this and the suggestion that there is
significance between the figures. This
remains to be developed, and it is
for the layman to draw his own con
clusions.
In other words this committee lust
now seems bent on showing certain
methods and results, and it will re
main :o be -shown what all this means.
The evidence Tuesday was not so
sensational as it was at Spartanburg.
It was quite orderly, but deep in its
import and fruitful in the evidence of
how things are run. It remains for
the people to say whether this is
sound business or not. The commit
tee had to have a beginning and an
ending point for its tables and figures.
so it chose from April. 1904. to April.
19o5, therefore all the figu2res and
tables are to and from these dates.
They Thow that on ti-is date the dis
pensary owed for liqnor and supplies
inl stock 8560.367.28. That the dispen
sary had on hand in supplies here and
throughout the state over $700,0oo.
Thtthe state has not turned over to
the State treasurer one dollar of
profits earned during the year 1905.
That the state board of control has
placed orders for $299,679-50 worth
of liquor, that it had not then ordered
shipped.
These orders were made mainly in
last November and December.
Th'at the state then owed for li
quor in hand and tentatively ordered
$86o,ooo, and that it had stock on
hand with which to pay these obli
gations.
Only two witnesses were examined
Tuesday, Mr. Samuel T. Carter, chief
clerk of the State treasury. Mr. Car
ter was a most intelligent witness.
His information was accurate, but in
direct, as gained through- the State
Treasurer's books. The only other
witness was Commissioner W. 0. Ta
tum, who has made an exceilent com
missioner and against whom there
has not been a word said. He did not
show a disposition to butt in with
suggestions, but simply and intelli
gently answered questions.
The evidence of th-ese two witnesses
showed some interesting conditions.
The State Treasurer has no check
on the State dispensary. Warrants
are issued by the dispensary with no
money in the hands of the State
Treasurer with. which -o pay these
warrants, and they have been rejected.
The quarterly reports of the State
Treasurer and the State dispensary do
not agree at the end of the quarter
as to cash balances. This is explained
by the fact that the clerk of the state
board maintains for the commisioner
a special account of odds and ends,
such as money for alcohol, barrels,
shortages collected and the like. It
is a sort of reserve fund, turned over
to the treasurer as needed and held
for emergencies. It.is protected by
the commissioner's bond for $8o,ow0,
but for a while it was a mystery, not
being turned directly over to the
State treasurer as other funds are.
During the morning session it de
veloped that there was a difference
of $30,ooo in the cash accounted for
by the State Treasurer and as shown
by the dispensary statement. The
treasurer's office was lost in expla
nation, but it developed that this
seems to be a sort of "kitty," that is
maintained to meet pressing paper.
Tuesday a warrant for $5,ooo was re
jected because no funds were on hand,
but after the warrant was refused pay
ment a deposit of $25,ooo was made
from this "kitty," and the warrant
will be paid, but it only goes to show
how close the three million dollar in
stitution skins. Perhaps th-e most in
teresting feature and significant testi
mony Tuesday was that Commis
sioner Tatum formally and officially
called the attention of the board of
control to the law, and suggested
compliance with the statute that li
quor be bought from the lowest re
sponsible bidder.
Mr. Tatum said that his comuni
cation is still unanswered, but he does
not imply that the boar did not have
a perfectc right to continue its present
policy and that it is not the better
one, but personally he insists that the
~better plan and the law look to t,he
purchase of liquor upon the basis of
competition. As explained the board
now fixes minimum prices and will
not buy liquors at lower prices than
it fixes in its advertisements. The
price is fixed and t!he competition is
on the grade and quality. Mr. Tatum
th'nks the -state would come Out as
well or becter if it invited competi
tion in prices as well as to grade and
quality.
Mr. Tatum made it very plain that
the state chemist cannot and does
not undertake to -analyze liquor to
tell its qualiry. All he undertakes
!o do and all he says he can do is to
tell whether the liquor he tests is
pure and proof. If it has any delete
rious 5tuftf in it he can tell it, if it is
under proof he can demonstrate that:
hut .he cannot tell whether the liquoi
is five years old or anything like that.
Tt was also rdemonstaterd that ease
goods are never analyzed, Mr. Tatur
while he does not undertake co shir
any responsibility, neither to attac
any blame. made it very pointed tha
he had no more to do with the buyin
of liquor, nor the policy of administra
tion chan the alleged man in th
moon.
About all he could do was to sig
checks, fill offices after they hav
been created by the board, keep a
eye on things in general -and hav
general supervision. Most of his at
thority is fixed by resolution of th
board. If the board tells him to ac
cept liquor he has i*c to do. He tol
of rejecting two car loads of liquo
on some seeming misunderstandin
about its being ordered, and that whe
the board insisted on his receiving i
that there was nothing else for him t
do under the law Mr. Taxum at som
length explained the business situa
tion and why no profits had bee
paid into the school fund this yea1
In a word, he said it was needed b,
the dispensary for its obligationc
and that as soon as the money i
asked for by the superintendent o
education it will be paid in, but tha
as the money is used in 'the fal
months it is held untii it is realli
needed, and there was no use for i
to lie in the treasury idle. He also ex
plained that he has done everythini
possible to reduce the s-rock and pa,
the debts of the institution, and tha
as a malter of fact there were les
case goods on hand than usual, anc
that he has been making progress ii
paying the debts of the dispensary
Mr. Tatum does not befieve much ii
the handling of case goods.
The evidence Tuesday indicate(
that there has recently been decide<
activity in forcing settlements and ih
keeping :tsk tTg'i'nrzL
Mr. Carter testified- that recentF
there have been quite a number o
shortages settled, notably tha2: o
Richardson, of Greenville. and tha
there had been more "following u:
than heretofore.
A curious statement was mad
Tuesday. Mr. Carter stated that i
a bid went to the State treasurcr'
office by mail, and was sent to th4
State dispensary, it went in*ro th
waste basket, or at all events that i
was not considered. He' explainei
that under the law bids are sent to th(
treasurer's office by express, and th
advertisements so stated and that th
board would not consider a bid sen
in by mail.
The testcimony showed that al
though the intent of the Mower act o
1902 is understood to be that the dis
pensary should hold its stock down t4
$400.000, that it has practically twic
that much on hand. Mr. Tatun
thinks the dispensary could easil:
operate on a stock of tihat size if i
did not use case goods, and orderei
frequently standard bulk goods.
Messrs. Lyon and Christense:
staced that they had some count:
dispensary witnesses on hand. The;
will pro'bably be reserved for the eni
of the wveek. These witnesses will b
corroborative, and to indicate that th
Spartanburg conditions are sympto
matic and not local.
Messrs. T. B. Frazer, Neills Chris
tensen, Jr., Cole L. Blease, Artlvu
Gaston, D. A. Spivey, and Frase
Lyon were at the meeting this morn
ing. Senator Hay was unable to b
present on acount of sickness, but th
committee went ahead with its wor
and will pro'bably be here un-ril th
end of the week.
Wednesday's Session.
The Columbia correspondent t
the News and Courier says that te
yer ago an offer was made -Co
Francis M. Mixson. then commissior
er of the (1: pensary. of thirty thouis
andv dollars if 'he would purchase $400
000 worth oif liquor~ ,upplies froi
William Lanahan. 7 on, of BaIt
more. Such wa' sworn statemer
Iof Col. Mixs 'Vednesday on tli
witness stand. Since the time whe
the attempt1 to bribe Col. Mixso
wa made the disnensary has pe
a haps bought more liquors from t'his
k firm than any other. Two. three and
h four years ago this was th-e banner
t firm of the dispensary. Col. Mixson
g stated that the senior member of the
- firm made him the offer personally
e and offered to sell liquor at the same
price that other firms were selling
n and by paying $30.000 to Col. Mixson
e for a portion of the state's business
a that the state would lose nothing
e and that Col. Mixson would get easv
- money. Col. Mixson furth-er said
e that Mr. Lanahan offered $5,ooo tc
- Mr. Seth W. Scruggs to get him
3 (Mixson) to accept the offer, which
r he was prompt in refusing.
g Now it will no doubt be Mr. Lana
.1 han's turn to be heard from, for 'he
:, is one of the largest ,wealrh-iest and
) best established dealers in America.
B But this is not all. Col. Mixson
- swore that Mihalovitch, Frether &
! Co., also offered him money to buy
from them, and that Mr. Hubbell,
i representin-g the Mill Creek Distilling
company, got things down to a more
S businesslike basis and offered him
f $262.50 per carload of fifty barrels.
t He offered to pay him this in cash,
I but declined to make a similiar re
' duction in the price of the liquor.
t Col. Mixson stated that he was
- prompt in reporting this to Gov.
i Evans and that he (Mixson) never
b hought a drop of liquor from a firm
t that made him any offers, direct or
5 indirect.
I Ool. Mixson testified that he ob
I tained a cash discount on all the bulk
goods he bought for the dispensary,
and that his prices were cheaper
than is now paid.
-Messrs. Gasion and Spivey, after
bringing out the alleged Lanahan of
fer, conected Mr. Lanahan as onae- of
tfte Iarge7 owners and directrs of
the Richland Distilling company, the
present largest sellers to the dis
pensary, according to the evidence.
t Then the question was asked Col.
Mixson if he knew of any change in
the business met1hlds of this firm.
It was all insinuation and suggestive,
but as can be seen it does not go
5 furth.er. The evidence of Col. Mix
son went on to show that Mr. L. W.
Boykin. at present a member of the
t -board, at one time represented Lana
han & Sons in this state, but Col.
Mixson made it plain that Mr. Boykin
did not represent this or any other
firm while a meinber of the state
board, or while an inspector.
There was a great deal of spice in
tihe evidence of Col. Mixson and es
f pecially in his contrast of the ortho
- dox business methods and strict com
> pliance witht he law ten years ago, as
Scompared with the present adminis
I tration, as viewed 'by him Wednesday.
r Of course there will be some who
tmay suggest that Col. Mixson may
I be disgruntled and that he left the dis
pensary under the cloud of the indis
I cretion of others connected with him.
r He was never accused of making a
r~ cent for himself out of the dispen
I sary and he had never given any evi
a dence of 't.
3 But whatever rhat may be, as long
~ as his evidence is undisputed it is
vital, material and forceful. At the
- afternoon session t'here came near
r being a jiail affair. It was accidentally
r developed that Gol. Mixson had let
- ters from Kelley & company in which
e there were sugges'tions as to how he
e might better push the sale of their
a goods. or something to t!hat effect.
e Mr. Gaston at once appreciated the
possible value of these le'tters and
wanted them produced. Col. Mixson
o took the position that they were pri
a vate i '1 business letters, and he de
. clined produce them unless com
- ,pe-lled do so. and even then h
wishe< think the matter over and
-consulh nsel. Messrs. Lyon and
aChritenst . who had had experience
I wanted no concessions granted. bui
t tihe letters or jail. Co]. Mixson. how.
e ever. s noke so feelingly and was suc
n a willing witness that he was giver
a until morning to present the letters
or to ishow canse. He pledg'es hih
word not to destroy a single letter.
It was not even intimate-. what was
in the letters, and there may really be
nothing in the world in any of them.
During Col. Mixson's testimony iz
was shown that ten years ago the
sales of the dispensary aggregated
over a million a year, and that at that
tiAne the salaries and expenses were
$13.974.39, while at present They are
$43,372.87 for salaries and similar ex
penses. Labor is more than double,
and the constabulary cost $43,032.01,
as against $66,412.02 for the present
year.
The comittee prepared and present
ed a detail statement of salaries and
suggested That there were rather
many clerks, that salaries had gone
up and the inspectors' account was
particularly heavy.
Commissioner Tatum was on the
witness stand the greater pArt of the
morning. There was nothing sensa
tional abou*c his testimony. He
thought well of the system and
through his testimony was a vein of
suggestions of how he thought the
present shortcomings might be reme
died. Mr. Tatum talked like a care
ful business man throughout and 'his
testimony alone would give the legis
lature suggestions tenough for a
month's work at revision and tight
ening up things.
Mr. Tatum gave a statement of the
loss of over $2,ooo in cash by In
spector Clarence Brown. Mr. Tatum
thinks Mr. Brown really lost the mon
ey. He related how the loss was
made good by himself and by col
lections from members of the board
of control and employees of the dis
pensary by Messrs. McCarthy &
Charles. There- was no compulsion
or- imitation to contribute to this
fund to malce up the- loss, but' he
stated' that it was purely voluntary
offerings and incidentally he thought
neither his bond nor that of Inspec
tor Brown was responsible to the loss.
Mr. Tatum recalled a number of al
leged shortages, which have been out
standing for some time, and he could
do no more than he 1has done towards
their collection.
'An interesting phase of Mr. Ta
tum's evidence was with regard to the
trip of himself and Mr. Boykin to Cin
cinnati, relative to the establishment
of a bottling plant at 'the dispensary.
Mr. Lyon took hold of this p hase with
some spirit, and the suggestion was
made that Mr. Boykin on this trip
bought or agreed to buy $3,ooo worth
of labels, to be used in the new bot- '
tling department. Mr. Tatum ex
plained athat he knew nothing what
ever about this label business. except
that he understood it was cheaper to
buy labels in large lots cheaper than
in small quantities. At all events the
label incident has not yet been devel-'
oped, and as yet has no real meaning
until it is shown how many labels
were really contracted for, and the
wisdom of the contract, w!hich may
have been wise in the light of an ex
planation.
Mr. Tatutm, however, said that he
was entertained while in Cincinnati 'by
hospita'ble men, but that he accepted
no c'onsiderable courtesy; that never
in 'his life has he ever been offered a
subsidy, rebate, or money for his in
fluence, or for anything he could do
for a liquor 'house or its agents. He
has never made a cent, except his sal
ary, out of the dispensary, and had
never been offered anything.
Mr. Tatumi explained 'how he dis
covered t'he habit of liquor houses
putting extra bottles in their cases,
ar.d how he was prompt in confiscat
ing all such extra bottles as soon as 'he
inund it nut, and how he refused to
accept beers that.had been double
labelled: that is where a high price
lahel had been put over a cheaper
grade label1.
Mr. Tatum is not much of the be
liever in case goods nor hotel privi
leges. He 'testified that beers are not
Continued o-n fourth page.)