The herald and news. (Newberry S.C.) 1903-1937, October 20, 1905, Image 2
been redeemed in stocks. hi1e the
loss is not so large, it shows how,
even in the most jealously guarded
system of business, error and some
times wrong may creep in.
Disparity Noticed Before.
As far back as -two years ago Mr.
S. T. Carter, bookkeeper in the office
of the state treasurer, called to the
attention of the ways and means com
mittee ;rhe fact that there was some
thing wrong with the interest paid on
stocks and the coupons paid on bonds.
What this trouble was, no one at that
time could tell, although it was seen
that the state was actually paying
more interest than was mathematical
ly proper. At that time no intent was
suspected or the matter could have
been aired.
Mr. Carter had been called before
the ways and means committee -Eo
testify in regard to the petition of Mr.
George H. Cornelson of Orangeburg,
who stated that his brother, who had
lived in Australia had died, leaving
$o,oooo in South Carolina bonds which
could not be found. It was while
looking into the Cornelson matter
that Mr. Carter first had his atten
tion attracted to the disparity in the
interest accounts.
About a mon-rh or six weeks ago
Capt. Jennings received a letter from
some ladies in Charleston in ref--r
ence to some bonds in their posses
sion, and in looking up the raLord
with referenc. to these bonds it was
-found that there had been, substitu
ion. This was the first intim.'
the state treasurer had of the trar.s
actions which are now suspcted of
-being fraudulent. He saw that the
entries were -in the bandwriting of
MT. Zimmerman, and yet thinking
ihat it was a clerical error, telephone-i
to Mr. Zimmerman to come to the
state treasurer's office. Mr. Zimmer
man stated that he would be there
that afternoon at 4 o'clock. Two days
elapsed and as' he had not seen Mr.
Zimmerman the state treasurer again
'phoned to his ho,use and Mr. Zimmer
man stated that he had been unwell
but would be there the next morning
at io o'clock.
Suspicion First Aroused.
As Mr. Zimmerman failed to keep
that engagement, Capt. Jennings fear
ed that ;rhe extent of the error, as he
thought it might not be known to Mr.
-' Zimmerman, and he wrote a letter
under date of Septem!nber 18th asking
Mr. Zimmerman to call and explain a
matter of consider'able importance to
Mr. Zimmerman and to the 'office.
After some delay Mr. Zimmerman
drove up to the east door of the state
capitol and called for Mr. S. T. Car
ter, and informed Mr. Carter that it
would be of no use for him to make
an examination of t.he entry which
had attractred attention as it had been
made- so long aigo that he could not
explain it.
Subsequently Mr. Zimmerman ap
peared in the corridor of the capitol
building and explained to Capt. Jen
nings that it would not be worth while
for ihim to try to explain the matter
as he had no recollection of it. This
execited the suspicion of the people in
the office and Capt. Jennings imme
diately notified the comptroller gen
eral and demanded a searching inves
tigation of the books in which the
records were kept.
The Comptroller's Report.
Comptroller General Jones yester
day submitted to Capt. Jennings the
following report made after a very
searching examination:
"In your letter directed to me as
comptroller general, dated October
7th, you state that there appears to be
an irregularity irn the matter of ex
change of a certain Brown coupon
bond, and the amount covered into a
stock certificate. That the state ap
pears to have lost the amounrt of this
bond and the interest at 4 1-2 per cent.
for several years. You ask that I,
as comptroller general, under section
672, volume I, of the code of 1902,
make a full investigation of the status
of the s'tate's securities as therein
required.
"In conformity with the above re
quirement, I have personally examin
ed, with the help of S. T. Carter, book
keeper, and J. Fuller Lyon, bond
clerk, all the security transactions of
the state from January 1st., 1894, to
date. From February 2nd., to .May
23rd., 19o1, I find a number of fraud
ulent transactions, aggregating $12,
500; or in other words, these trans
actions have increased the state's
bonded debt -t that extent, together
wit $3,903.7 interest paid thereon.
makmg a ::otai o1 ,16403.75
"These items going to make up the
various transactions are fully itemized
and hereto- appended. The examina
tion reveals the fact that the bond
clerk during the period in which these
transactions appear upon the books
has falsified or erased the numbers of
certain bonds surrendered for ex
change and has abstracted bonds pre
viously cancelled and has substituted
the same at a later date for such bonds
surrendered, and has evidently, as
shown by the interest account put
the bonds so erased as uncancelled on
the marke-.
"This is clearly shown by the fact
that all transiactions during this period
appear in the handwriting of the same
bond clerk. It seems that the bond
clerk in the State treasurer's of
fice has ch'arge of all bond transac
tions."
When he had received the report
and the itemized statement from the
comptroller general, Capt. Jennings
forwarded these to the 'attorney gen
eral's office with a request to be ad
vised as to the mode of procedure.
Mr. Leroy F. Youmans, the assistant
attorney general, replied in the fol
lowing terms: "I am .in receipt of
yours of tod'ay enclosing copy of
yours of October 7th to Hon. A. W.
Jones, comptroller 'general, and his re
ply to you of this date. You ask 'chat
I instruct you as to your duties in the
premises. If, of your own knowledge,
you know, or if from information ob
tained from others you believe or if
as a conclusion from circumstances
you have a just cause to believe and
do believe that-the bond clerk refer
red to has committed the offense
charged in the correspondence, it is
your duty to proceed in the criminal
courts against the said bond clerk.
Civil proceedings will be a matter for
further consideration."
Warrant Sworn Out.
When thus advised, Capt. Jennings
asked the a'ttorney general to make
out the warrant for the arrest of Mr.
Zimmerman. The warrant charges
breach .of trist with; fraudulent intent
and larceny of Stcate bonds with the
purpose of devoting the proceeds to
his own personal use.
In his affidavit upon which the war
rant was issued, Treasurer Jennings
recites the transactions narrated by
Mr. Jones and concludes:
'That -at all these dates one Daniel
Zimmerman was the bookkeeper in
the office of the Sta:te treasurer and
especially entrusted by the three
treaurers of the State named above in
succession, with the performance of
the duties of the treasurer in the sur
render of Brown coupon bonds and
the issuance of sitock certificates in ex
change th:ere for.
'That in connection with tihese
transactions, bonds surrendered and
which should have been cancelled,
have been abstracted from the State
treasury and substituted at a la;ter
date from such bonds surrendered and
the numbers of certain bonds have,
this deponent is informed and be
lieves, 'been altered in the writing
thereof to the prejudice of and with
the in:tent to defraud the State.
"That this deponent is informed,
has just cause to believe and does be
lieve th'at the said Daniel Zimmerman
has been 'gu'lty of the offenses above
set forth; has in so doing committed a
breach of trust with fraudulent inten
tion, 'has stolen the bonds aforesaid
the property of the State, has unlaw
fully increased the State's bonded
debt to the extent of $1:2,500 besides
$3,90375 interest; that -this deponent,
Win. T. Bates, Wmn. H. 'Timmerman,
A. W. Jones, J. Fuller Lyon, S. T.
Garter, are material witnesses to
prove the same."
When the examination was . first
concluded, no evidence of fraudulent
transactions during Capt. Jennings'
administrations had been discovered,
but by a careful revision it was found
that there was one such in April, 1gor,
two months after Capt. Jennings
came into office. The full statement
of the items discovered is given else
where. One of these was on Jan. 15,
1901, just four days before Dr. Tim
merman turned the office over to
Captain Jennings.
Mr. Zimimerman's Disappearance.
There was some delay in the prep
aration of the warrant and Dr. Bates
and Dr. Timnmerman, the two former
State treasurers, who still have a very
sympathetic regard for Mr. Zimmer
man, drove out to his house to pre
pare him for w'hat was coming and to
the matter I It lay wi-hil h> Pc "xe'
to do so. Vhen they arrived at Mr
Zimmerman's home about noon the:
were informed tha khe was at the in
surance office ofi . 6. L. Miller
They drove without delay to the offic,
of Mr. Miller and were informed tha
Mr. Zimmerman had just left. Tha
was about i o'clock and it was no
until 4 o'clock that the warrant wa
placed in the hands of Sheriff Cole
man. As soon as the warrant ha
been sivorn out, the news was mad
public, and Mr. Zimmerman's friend
as well as the officers of the law wer
all on the lookout for him, but he ha
not been seen since the time or abot
the time he left Mr. Miller's office.
Dr. 'immerman Hard Hit.
It will be some time before it ca
be told definitely in whose administrn
tions these affairs occurred, but a
present it appears that the liabilitie
will be about as follows:
W. T. C. Bates .. .. .. .. ..$ i,2c
W. H. Timmerman .........Io,5c
R. H. Jennings.. i... ,4c
Total.. ..... ....$12,IC
To this of course must be added th
interest which will increase the tot;
amount lost by the State of Sout
Carolina and to be recovered on th
bonds,$3,9o2.
It is alleged that the fraudulent er
tries were made in this wise: A part
having bonds might prefer stocks i
exchange. The papers would be pr<
sented and the transfer made. The
instead of cancelling the bond tb
clerk in charge, apparently, woul
take out one of the bonds when thei
would be large package and at som
convenient date would put it on tb
market as if it were a negotiable ir
strument instead of i bond whose val
dity had been wiped out by the e)
change. The bonds of the state ai
payable to be:arer, just as a bank nol
or other currency, and the stocks ai
payable to order only.
The interest on the bonds is th
same as the .interest on the stocks, bt
the coupons on the bonds may be pr4
sented by any one whereas the intei
est on the stocks is 'sent in checks t
parties in whose name the stocks ar
made out unless the state treasure
has 'been notified of the transferC
the stocks. For that reason man
people prefer stocks to bonds an
there are issued sometimes as many a
I,350 cert.ificates in a year.
-How It Could Have Been Done.
To show how easily this kind C
transaction might have been mad
without discovery except by acciden
there are on the books of the stat
treasurer bonds of this issue alon
valued at $3,374,000 and stocks value
at $2,226,000. Since the date of th
issue of these bonds there have bee
issued 4,044 (bonds of the denominm
tion of $i,ooo and 2,134 bonds of t'h
denomination of $5oo. Many of thes
bonds have been exchanged for stock
and therfore it wi4l be apparent the
fraudulent transactions might . hav
occurred as the employees of th
treasurer's office are considered abov
suspicion and the bonds are not count
ed.
It is said that when a package c
bonds would be returned in exchang
for stocks it would be very easy t
cancel nine of the bonds and substi
tute for the tenth a. cancelled bon
which had been taken up several year
before. The legis'lative investigatin,
committee would count merely th
bonds as units without inspectin
them, and if the number corresponde
wih the number reported exchange
for stocks within the year, ther
wold 'be no suspicion of the fact tha
for a bond exchanged inrigoo0 and .tha
stance in 1895, had 'been substitute
for a bond ech'anged in 19oo and tha
th'e latter had been 'taken from th
package and 'had been sold. The stat
would therefore be paying 'interest o:
the bond which should have bee
cancelled as well as upon the stoc:
certificate which had been issued'i
place of the bond.
As Mr. Zimmerman was chargel
with the custody of the bonds, a's h
was che one responsible for markini
the exchanged 'bonds 'cancelled" an,
as the entries on the books were is
his handwri:ting, it is easy to connec
him with the fraudulent exchange. Hi
many friends hope that there wil
be some way in which the matter cai
be cleared up and Mr. Zimmermai
prove thait he was not guilty of th<
serious offenses charged.
Fraudulent Bond Transactions.
Following is Comptroller Gcnera
Tmes itemied-r s+tament envering
ELEVENTH CAR
Choice Ten ess
JUST RECEI
and while it lasts goes for
Best -Patent, Cotton, -
Best Half Patent, Cotton,
This makes eleven hundr<
short time.
t While we are doing the Fl
are also leading in Dry Good
ing, Millinery, &c., &c. We
goods, carefully selected it
Baltimore, and want everybi
see for themselves and be c
are headquarters and the pr<
all kinds goods at very bott
0 pay $40.00 for Sewing Mach
drop head $17.93, guarante
- high tone, 12 stop Organ $50
Choice Western Seed Oats
e Thousands of bargains in <
h Almost impossible to mentio
MOSELE1
TWVrO FOR 4
e0 Special Offer on Our Cough
d Cut out this adv. and hand it in wit]
e you a package each of our 25c. size Cc
e , for the price of one until the first of
e this special offer that will not be repe
made solely that you may test the meri
I- One or both are apt to be needed at an
- @make a saving, and be ready to treat a
e $ as one appears. When bought at regul
e are guaranteed.
,e MAYES' DRUG
FOR BARGAIN
IN
FUR NIT
e . AND
IHOUSEHOLD
C ~COME TO
Kibler, Den
NEWBERRV
When Wanting Somethil
CALL ON
Geo. D. Day
tCod Fish Balls,[Deviled Cri
pered Herring, French Sa
Boneless Herring, Roast N
Beef, Lunch Tongue, Slic
Chicken and Potted Turkey, 4
Pineapple, Mushroons, As
Salad, Pickles-Sweet and !
lets, Cheese, Coffee from 15<
Cream of Wheat, Quaker C
Force, Peanut Butter, Butt4
Ferris' Breakfast Bacon, Ted
Spices for Pickling, Vinegar
Apple, Fresh lot of Chocolate
pound.
Phone 1 10.
OF THAT
,ee Flour
VED,
-- $5.25
4.45
.d bbis. sold in a
>ur business, we
s, Notions, Cloth
are brim full of
i New York and
dy to come and
:nvinced that we
)per place to buy
Dm prices. Why
ine? We sell good
Bd; good Walnut
00.
, sacked 55 cents.
)ur immense line.
n them all.
f BROS.
and Cold Cure.
25c. and we will give
ugh and 25c- Cold Cure
November. We make 0
ated this year, and is *
s partly at our expense.
V time. Buy at once,
cough or cold as soon
'ar prices these remedies
STORE.
URE
GOODS
is&Co
, s. C~.
g Good to Eat
enport.
bs, Shrimps, Kip
rdines, Lobsters,
utton and Roast
ed Ham, Potted
rated and Sliced
paragus, Celery
sour, Junket Tab
:. to 35c. per lb.,
ats, Grape Nuits,
er Beans, Olives,
tley's Tea, Mixed
-White Wine and
Can dies 40c. per