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Until About June 1920 the deposits of the state treasurer in the Santa Fe Bank were not abnormal. Then they suddenly mounted well toward the figure where they were when the bank failed. Why did this happen? There is a reason. What is it? Almost at once the loans of this bank mounted proportionate ly until the loans nearly equalled the deposits. It should be remembered that the excuse for this account assuming such size was because it was presumed to be a checking account. The state's checking accounts are very active; that Is, all of them but this one. Except for a private understanding this bank must have assumed that a check of one hundred thousand dollars or some other large amount might come in any day. Yet this bank almost immediately loaned practically the entire amount on unliquid paper. There are two alternatives possible in one's reasoning: either the officers of this bank were stark mad and should be in an asylum for the insane, or they had an understanding on the side that this account would not be checked against or would be replenished so as to maintain a uniform balance. No one charges the officers with insanity. There is no conclusion possible except that they had an understanding with some one. With whom did they have an understanding? Why did they have such an understanding? There is a reason. Such things do not just happen. What is the reason? The Journal cannot answer. It could only guess. But we will refrain from guessing. If the governor will call the legislature in special session we are sure that, with its power to subpoena, swear witnesses and compel them to talk and to compel, the production of books and records, its committees will soon learn an interesting story of how the people's money is handled. Two hours with the banks records before them and its officials on the witness stand, would suffice to produce the desired information, in our judgment. The rumor that a poker game played any part in it is false, although the size of the stakes in poker games in which state onicials have participated is shocking. No self-respecting custodian of the people's business could indulge with decency in these dissipations running through the light and iar into the day. No powerful political figure lurks in the background of this bank mess. It was not politics unless there were large campaign contributions of which the Journal can not learn. We are convinced that it was not politics. What was it? There is a reason. The legislature could find out. Will Governor Mechem give it a chance to find out? The Journal is learning some interesting things. For instance, the law requires all state officials to deposit in the state treasury on the first of each month, any monies collected during the previous month. The secretary of state has done this with great promptness. The check on the Santa Fe bank by the secretary of state for the month of October was handed to the treasurer on November 8. The bank pronounced it good in response to a telephone inquiry, yet the books show that the treasurer carried it as a cash item until November 13, because the bank said it could not pay it and it was finally deposited in that*bank by the treasurer on the last day of the fiscal year out of sheer despair, we are told. Yet on December 3 twenty-five thousand dollars was transferred from the treasurer's account in the First National bank of Santa Fe to his account in the Santa Fe bank because the latter did not have money enough to stay in business throughout that day without it. This may be explained by a willingness on the part of the treasurer to hazard an additional twenty-five thousand rather than face the criticism which would follow a failure of the bank. The insurance division of the bank examiner's office deposited $70,000 with the state treasurer on July 17 by giving the treasurer a check on the Santa Fe bank, which was merely transferred from one account to the other on the books of that institution. This department had held this money for months in defiance of the law requiring monthly deposits. It is only fair to Mr. Read, bank examiner, to say that this office did not come under his jurisdiction until April of this year. Mr. Lineau handled this fund. The auditor's office turned over to the treasurer $66,000 on October 22. This was already in the Santa be bank and was merely transferred to the treasurer's account. The auditor's office ignored the law relative to monthly transfers to the treasurer but got out from under in a lump sum when the situation became aoute. This is the fund of which the auditor kept an account on scraps of paper. Laxness is prevalent i.. the capitol building. No one seems to check any one else with any seriousness." They seem too courteous to each other to care to offend by criticizing or prying. Governor Mochem has It in his power to make them know right now that public office is a public trust instead of a private snap. He can cure officials of "sucking eggs" if he has the will. If offenders are protected now everyone will feel safe in doing anything he pleases. Now is the time to correct the evils in the law of accounting and auditing. Governor Mechem can make or unmake his administration by his handling of this m. tter. The legislature should be convened in January. Meantime the governor should have a cash audit of the treasurer and the auditor with criticisms of their methods by someone who will command public confidence.
