INDIAN A
MAGAZINE OF HISTORY
Volume LV
JUNE 1959
NUMBER2
The Indiana State Board of Accounts
Louis E. Lambert*
THE LAW I N FORMATION
The first decade of the present century was a period of
intellectual ferment when social, economic, and political
institutions were examined and questioned as they had never
been before. In the area of politics and government, to which
this study is restricted, the decade was rich with argument
and innovation. The initiative, referendum, and recall, devices
of democracy, were discussed fully and accepted in several
states. The direct primary was being adopted in various
states and soon became the common method for nominating
candidates for state and local offices. Newspapers devoted
considerable space to the subject of woman suffrage, and a
number of western states granted women the right to vote
by 1915.
Several plans for the improvement of local government
were introduced, considered, and, in some places, accepted.
The commission form of city government, though not exactly
new when adopted by Galveston, Texas, in 1901, became wellknown during the decade. The Des Moines Plan, a refinement
of the commission form, attracted national attention and was
the subject of an admiring editorial in the Indianapolis News.'
The council-manager (city manager) type of municipal
government was initiated in Staunton, Virginia, and the News
reprinted an editorial from the Washington Herald concerning it.2 Late in 1908 the News carried several stories about
the activities of New York's Bureau of Municipal Research,
the first of such agencies in this country. The success of the
Louis E. Lambert is Assistant Professor of Government at Indiana
University.
1 Indianapolis News, April 27, 1908.
*Zbid., December 11, 1908.
112
Indiana Magazine o f History
bureau, the News declared, had a local application. The News
said :
In a word, in the short life of this association it has accomplished a wonderful amount of good. It has done it by
having system itself. Its work has been progressive, conducted
in a businesslike way day after day.
There should be in this a lesson for Indianapolis.3
...
The positive results of the decade from 1900 to 1910,
however, are merely one part of the picture of government
and politics, and certainly not the most typical part. Misgovernment, scandals of omission and commission, probably
was no greater than in preceding decades, but some scandals
of municipal and state corruption were thoroughly investigated. The results of these investigations were published
in hard-hitting prose supported by documentary evidence in
nationally circulated magazines by a group of writers who
became known as the Muckrakers.
Though their approach was negative on the surface, the
Muckrakers made a very significant contribution toward the
improvement of local government. To show concrete results
stemming from the studies of Lincoln Steffens and his colleagues, except for particular and largely temporary gains,
would be difficult, but much information on the failure of
local government was made available to the public. Interest
in local government awakened, discussion developed, and
then indignation grew.
Steffens’ articles on graft and corruption in city and
state governments appeared in McClure’s Magazine from
1902 to 1905. They were packed with evidence of bribery of
legislative bodies, of orgies of crime by criminals acting under
the sponsorship and protection of police departments, and
of widespread betrayal of the public interest by government
officers. Steffens’ titles were in themselves indictments of
the cities and states being discussed: “Tweed Days in St.
Louis,” “The Shamelessness of Minneapolis,” “Philadelphia :
Corrupt and Contented.” In the Introduction to The Sharne
of the Cities, a compilation of the McClure’s Magazine articles,
Steffens says, “They were written with a purpose . they
are reprinted now together to further that same purpose,
which was and is-to sound for the civic pride of an apparently shameless citizenship.”’
. .
SZbid., December 14, 1908.
Lincoln Steffens, The Shcvme of the Cities (New York, 1904), 3.
The Indium State Board of Accounts
113
Hoosiers were, no doubt, familiar with Steffens’ writing
since the circulation of McClure’s was becoming increasingly
wide during the first decade of the c e n t ~ r y .Cosmopolitan,
~
Outlook, Colliers, Everybody’s, and the Independent, all nationally distributed, also carried muckraking articles. After
investigations in St. Louis, Chicago, Minneapolis, New York,
Philadelphia, Cincinnati, and Cleveland, Steffens found that
the trail of municipal corruption led to various state capitals.
But even when revealing misrule on the state level, Steffens
continued his accounts of local wrongdoing. In fact, by exposing the close relationship between boodlers and bribers on
each level of government, he brought the situation of misgovernment home effectively to the public. The title of his
article on Illinois reveals Steffens’ point of view: “Chicago’s
Appeal to Illinois-Showing How, Since Corruption of a State
and its Cities Is All One System, Municipal Reform Must
Include State Reform.’’e
That Steffens’ articles made an impression in Indiana
is suggested by the fact he was invited to address the Contemporary Club of Indianapolis in 1908. Though not accepting
Steffens’ somewhat sophisticated analysis of what was wrong
with municipal government, the N e w s acknowledged the
valuable contribution which he had made toward improving
local government.‘ The muckraking articles on graft and
corruption in the larger American cities set many Indiana
people to wondering about what was going on in their own
city halls and county courthouses. Frequently weekly and
daily newspapers of the county seats verified the rumors of
corruption that had been made a subject of gossip. Occasionally
a treasurer would slip away by night, leaving a sizable
shortage behind ; commissioners and trustees would become
prosperous, too prosperous ; obvious miscarriages of justice
would occur ; bridges and highways would be constructed
below specifications and above reasonable cost. Although
these things were widely known, seldom was anything done
about them.
But even though the local prosecutors directed little
energy or inclination toward exposing misgovernment,
5 C. C. Regier, The Era of the Muckrakers (Chapel Hill, N.C.,
1932), 57.
6 Lincoln Steffens, The Struggle for Self-Government (New York,
1906), 40.
7 Indianapolis News, October 16, 1908.
114
Indiana Magazine of History
shortages in public accounts came to light. W. N. Blodgett,
a crusading journalist of the Indianapolis News, visited a
number of counties in 1908 and gave local scandals state-wide
publicity. Though he made no investigations himself, he
performed a valuable service by making the people of the
state conscious of the prevalence of wrongdoing by local
officers. In the N e w s of October 22, 1908, Blodgett reported
that in Wabash County three county treasurers in succession
had defaulted, and that the city treasurer, short $13,000,
had been indicted but was freed on a technicality. From
Evansville Blodgett wrote of a Vanderburg County treasurer
who, though short $62,000, was acquitted of charges of
embezzlement.8 In Terre Haute Blodgett found that a Vigo
County treasurer had been short $78,000, and that a city
treasurer had stolen considerable sums.g In his dispatch of
October 28 from Terre Haute, Blodgett first used the phrase
which was to be frequently repeated in articles on dishonesty
in local government : “Vigo county is loud in its demand for
an opening o f the books.” (Italics are the author’s.) His
account of the acquittal of commissioners who had been
indicted for the illegal letting of a contract to construct
bridges closes: “The people of Henry county want the county
books opened, and they are going to have them opened some
day.”1° From Decatur County under a headline of “‘Good
Fellows’ and Bad Bookkeeping Produce the Familiar Results,”
Blodgett told of a trustee who could not account for $10,000,
of padded teacher payrolls, and of office records disappearing
from the county auditor’s office.11 In Gibson County Blodgett
found that an Indianapolis firm was granted a bridge construction contract, even though its bid was the highest of
three submitted.12
Monroe County drew considerable attention from
Blodgett because the political situation there, he stated, was
the worst he had seen in the state.13 A “Ring” had dominated
both political parties, selecting the candidates for both and
deciding who should be elected. The “Whitecaps,” a terroristic group which was the disciplinary arm of the Ring,
elbid., October 27, 1908.
QZbid., October 28, 1908.
10 Ibid.
1 1 Z W . , October 30, 1908.
12Zbid., November 20, 1908.
lJZbid., November 19, 1908.
The Indiana State Board of Accounts
115
reportedly enforced its decisions. When the Monroe County
accounts were audited by special auditors hired for that
purpose, two former sheriffs were found to be short, $22,000
had been improperly paid out for roads, and four newspapers
had been overpaid for legal printing.” The scandals in
Monroe County were so well known and the situation had
existed so long that Governor Winfield T. Durbin (19011905) had recommended, some time before Blodgett’s visit,
that the state university be removed from Bloomington, the
county seat.16
Such revelations of graft and corruption in public office
as these, written by Blodgett and published in the Indianapolis
News during the last quarter of 1908, caused numerous
people to conclude that local political scandals were common
throughout the state and were therefore of more than local
concern. When a suggestion was made that the authority of
the state be used to try to correct this political corruption, community leaders rallied to support the idea. If the situation
had not been made clear for them by national and state
publications, their support might have been lacking when it
was needed. In fact, a bill to establish a state agency to audit
the accounts of local officers had been introduced in the
general assembly in 1899 only to die quietly in committee.lB
Between 1899 and 1909 a change of attitude had occurred in
Indiana. The earlier attempt to secure a system of auditing
the accounts of public officials had been defeated quietly
and easily. But in 1909 a bill to accomplish this result was
passed, not quietly and easily perhaps, but passed. By this
time many people of political influence had come to believe
that a check would have to be set upon state and local officials.
Hence, public awareness of the need for reform was
finally translated into action when questionable practices in
the Marion County auditor’s office induced a civic and business group, the Merchants’ Association of Indianapolis, to
agitate for control of corruption in city, township, and county
1 4 Ibid.
December 14, 1908.
IsIndiana, Journal of the House of Representatives, 1899, Part 1,
p. 935, H. B. 533, describes this as “a bill for an act to enable the State
of Indiana to exercise a better supervision in the collection and management of State, county and township funds, etc.” The bill was introduced
by Representative Alfred M. Glossbrenner, February 13, 1899, and was
referred to the Committee on County and Township Business,
15Zbid.,
Indiana Magazine of History
116
government through state legislation. By publicizing existing
abuses in local government and by organizing opinion, the
association influenced the Sixty-sixth General Assembly to
create the State Board of Accounts, an agency which put the
finances of public office under state supervision.
The particular set of incidents that aroused public opinion
in Marion County and precipitated the struggle which
culminated in the creation of the State Board of Accounts
broke into the newspapers inconspicuously. On February 14,
1908, the Indianapolis News reported, under the headline
“Irregularities at Courthouse,” that the newly elected auditor
had informed the county commissioners that five warrant
books were missing from his office. Several days earlier
Albert Sahm, the county auditor, had become suspicious of
certain warrants that had been issued during the term of
his predecessor. Two particular warrants were without any
bill or entry to account for them on the claims docket. The
auditor instructed his staff to refuse approval for payment
on these warrants until he could investigate the circumstances
under which they had been issued.” Before this time, however, Sahm had become involved in an argument with Emmett
S. Huggins, who worked in the auditor’s office as bailiff of
the county commissioners’ court. The auditor had insisted
that all bills presented to the commissioners for payment be
accompanied by affadavits setting out in detail the services
performed or materials supplied. Until the auditor’s enforcement of this provision, which had been newly accepted by
the commissioners on the advice of the county attorney, a
certification by Huggins had been sufficient for presentation
of a claim to the commissioners. Huggins maintained that
such affadavits were unnecessary, but Auditor Sahm insisted
upon complete compliance with the law.’*
When the previously mentioned warrants were presented,
the auditor discovered that they were made out to individuals
who, so f a r as he could discover, had had no dealings whatsoever with the county. On the day that the suspicious warrants
were presented, Sahm discovered that the warrant books for
1907 had disappeared from his office. Auditor Sahm then
informed the commissioners of the situation in his office.
Indianapolis News, February 14, 1908.
1*Zbid., February 15, 1908,
17
The Indiana State Board of Accounts
117
At a meeting of the three commissioners with the auditor
and the prosecuting attorney, Emmett S. Huggins admitted
making out the warrants in question. He said that he had
made them to individual employees of a construction firm
doing work for the county because “it was desired that i t not
appear that the firm was getting too much work from the
county.” Huggins admitted that he had drawn one warrant
on an improper fund because, he said, the proper fund was
too low at the time. Huggins denied any knowledge whatsoever of the missing warrant books. The News stated, “Huggins is a young man, the son-in-law of R. G . Moore, member
of the County Council. His reputation has been clean.” One
of the commissioners, who was not specified, expressed
confidence in Huggins, saying that Huggins “could explain
the matter of the warrants, and would do SO."'^
Such confidence, however, was not well-founded, for
Huggins’ story was quickly exploded. One of the men to whom
a warrant had been made was called to the auditor’s office;
the other alleged warrant holder was out of town. At the
auditor’s office the first man stated that he had done no
work whatever for which the county, even indirectly, should
pay him ; furthermore, he maintained that he had not received
or signed any county warrants. He denied that the signature
on the warrant had been made by him.
Prosecutor Elliott R. Hooten said that a grand jury was
needed. Police were stationed in the auditor’s office at night
to prevent any further disappearance of official records. The
Indianapolis News mentioned that “rumors of other alleged
crookedness were plentiful about the courthouse today.”*O
An editorial stated suspicions of the former county administration :
We think the people of Marion county now realize how
wise was their action in electing Mr. Sahm as auditor, thus
making a break in the ring which has for years governed this
county. .
Of course, this is a case for the grand jury. Leaving,
then, the question of criminality to be settled by that body, we
only say now that we have a case of business management that
reflects seriously on all those-the late auditor, and the County
Commissioners-who had any official relation to the affair.21
..
13Ibid., February 14, 1908.
Z O Z b i d . , February 15, 1908.
21
Ibid.
118
Indiana Magazine of History
On February 17, a grand jury was summoned and Criminal
Court Judge James A. Pritchard gave i t special instructions
concerning alleged fraudulent payments made in the auditor’s
office. A News editorial asked:
What we wish to know is the names of the men who have
thus been robbing the people of Marion county. Also the people
wish to know how it was that such ridiculous and criminally
careless methods of transacting the people’s business were
permitted by . [the commissioners] and by Auditor Clark. .
We know, too, that under the system, of which we have
learned much in the last few days, almost any sort of looting
or grafting was possible.
..
..
Further information was brought to light by the grand
jury. Money paid the auditor for the making of plats had
increased from $1,000 in 1904 to $8,500 in 1907. None of
the bills for plat making presented by the auditor during
1905 and 1906 set out the actual number of descriptions for
which the bills were supposed to pay; all were made out in
round sums such as $500 and its multiples. The coal bills for
the county powerhouse varied between $600 and $1,200
monthly although the engineer testified that the amount of
ashes removed each month was substantially the same. It
was later found that the coal bills were higher in the summer
than in the winter. The commissioners paid $775 for an
X-ray machine for the Julietta Hospital for the Insane even
though the price on the open market was only $155. The
superintendent denied that he had made any requisition for
such a machine, and none was found. When he received the
machine, the superintendent had called Commissioner John
E. McGaughey about i t and was assured that everything was
“all right.” According to the superintendent, McGaughey
directed him to approve the receipt and told him that his
approval on the receipt meant no more than that the machine
had arrived in working condition. The most important
discovery of the grand jury, however, concerned the letting
of a contract to supply boilers and pumps for the county
powerhouses. The only bid was by the Atlas Engine Company,
but no contract between that firm and the county could be
discovered by the commissioners.22
Meanwhile, two more newsworthy events occured. The
county commissioners petitioned the county council to apZ*Zbid., February 17, 19, 20, 1908.
The Indiana State Board of Accounts
119
propriate $1,000 to pay “two competent experts” to examine
the county’s books. Secondly, the personnel of the grand
jury itself came under discussion. It was discovered that
one member had been a custodian of the courthouse, and if
he had remained on the grand jury he would have passed
upon some of his own acts. Another member and his brother
were partners in a lumber firm that had received money
from the county.
The developments stemming from the letting of the Atlas
Engine Company contract, however, soon monopolized the
headlines in the Indianapolis papers. Huggins, who had been
arrested on a forgery charge on February 20, was further
charged with bribery and conspiracy to commit bribery. Two
of the county commissioners, one of whom, John D. McGregor,
was still serving, were also charged with bribery and the
soliciting of a bribe, as were several officers of the Atlas
Engine Company. The president of the company had been
in California, but had, according to his wife, gone on a visit
to Australia.
After stating that his client did not intend to become
a “fall guy,” Emmett Huggins’ attorney aroused further
public interest in the case by saying, according to the Indianapolis Star of March 5 , “ ‘If that boy [Huggins] tells
what he knows he will blow the slate roof off of that Court
House.’ ’’ The News reported that Huggins admitted stealing
at least $5,000 from the county by forging and cashing more
than fifty warrants. Futher betrayal of the public trust was
suggested by the fact that he had paid cash for a $1,000 lot
in Indianapolis and had joined an expensive fraternal organization, though his salary had never exceeded $75 a
month.23 The Atlas Machine Company salesman testified that
he had given a check for $3,800 to Huggins for bribing the
county commissioners. The company auditor of the Atlas
Company presented the canceled check. In a statement to the
prosecutor, Huggins admitted that he had received the check
and that he had paid Commissioner McGregor $800. On the
day that Huggins and the Atlas representative testified that
Commissioner McGregor had been given the $800 bribe, a
deposit slip of McGregor’s for approximately $800 and dated
the same day as the check from Atlas was presented as
evidence. Yet, Commissioner McGregor was found not guilty.
The original bid of the Atlas Machine Company had been
28
Indianapolis News, August 30, 31, 1908.
120
Indiana Magazine
of History
$15,000. When Huggins, allegedly acting for some of the
commissioners, demanded the $3,800 bribe, the company added
an additional $1,900 to its bid for “profit.”24
Within four days after publication of the scandal, the
county commissioners started action to get the facts on the
misconduct of public business in Marion County. They petitioned the county council to appropriate $1,000 to pay “two
competent experts” to examine the county’s financial records.
Within two weeks the county council had made $5,000 available for the investigation. All county records, beginning with
those of December 31, 1907, were to be investigated at once.
How f a r back the study might possibly be carried at some
future time was not specified. The “experts,” as yet unnamed,
were to be under the direction of the commissioners at all
times, and their reports, when completed, were to go to the
commissioners, An Indianapolis Star editorial objected to the
arrangement when it said that
it does seem as if a board of county commissioners, one
of whom is under arrest and all of whom are under inquiry,
might hesitate about appointing experts to investigate themselves. It might occur to them, we should say, that a vindication so obtained might form the basis of subsequent unsympathetic comment.26
Nonetheless on the same day that the Star was protesting,
E. R. Parmalee and C. D. Lockhart were appointed by the
commissioners to examine the county’s financial records.26
At this point, the Merchants’ Association of Indianapolis
interjected what proved to be a significant proposal into
the plans for investigation of county finances. On March 9
the organization’s first move in its subsequently active part
in the inquiry was a decision to contribute $2,500 to hire an
attorney to assist the county prosecutor in the graft cases,
thereby bringing in an impartial outside examiner. Three
members of the association, William C. Bobbs, Ferd L. Mayer,
and Fred M. Ayres, called on Judge James A. Pritchard and
ascertained the desirability of such a step. The offer to
engage an outside attorney was in response to the county
council’s reluctance to appropriate funds for such a purpose.
The Merchants’ Association retained an Indianapolis
attorney, James W. Noel, to assist in the investigation of
Ibid.
Indianapolis Star, March 3, 1908.
26 Ibid.
24
26
The Indiana State Board of Accounts
121
Marion County government. This act was to have considerable
significance, for Noel was to play an important role in the
creation of the State Board of Accounts. The specific date
that Noel was assigned to the investigation cannot be
ascertained, but he is mentioned in the county commissioners’
petition to the council for funds to continue the investigation
which states, ‘Whereas, By and through the work of said
experts and County Attorney John C. Ruckelshaus and Mr.
James W. Noel, special counsel for Marion County in matters
pertaining to this investigation, the county has recovered
from various persons large sums of money.”27
In his speech at the banquet marking the twenty-fifth
anniversary of the Board of Accounts,z8 Noel stated, “They
[the Merchants’ Association] finally induced the county commissioners to employ the speaker as a deputy county attorney,
without pay. The merchants’ association [sic] paid him.”2g
Noel was particularly well-equipped to aid in the investigation, for in 1903 he had
conducted a public investigation of the affairs of the City of
Indianapolis which resulted in the overthrow of the administration at the coming election, and temporarily purged the city
of much corruption and many abuses. I n 1905 the governor
of the state appointed him as one of three members of a
commission to investigate state affairs and the condition of
Indiana insurance companies. Mr. Noel took direction of
this movement and devoted the larger part of one year to its
success, which resulted in the removal of the auditor of state,
the secretary of state and the adjutant general, and the recovery
.30
of hundreds of thousands to the state treasury.
..
Indianapolis Star, August 21, 1908.
This banquet was given by the Field Examiners’ Association to
celebrate the twenty-fifth anniversary of the State Board of Awpunts.
A record of the proceedings of the evening can be found in State
Board of Accounts Twenty-fifth Anniversary Addresses,” Transcription of proceedings at the twenty-fifth anniversary banquet of the
Board of Accounts, January 5, 1935 (typed carbon co y owned by
Otto K. Jensen). A deputy state examiner at the time o?the banquet,
Jensen assigned a stenographer to make a record of the event; this
record will be hereafter cited as “XXV Anniversary Addresses.”
2s “XXV Anniversary Addresses,” 25-26.
$0 Jacob Piatt Dunn, Greater Indianapolis (2 vols., Chicago, 1910),
11, 863. The last sentence of this quotation refers to abuse of state
funds which caused Governor J. Frank Hanly to include a discussion
of the problem of misgovernment in his message to the General Assembly of 1907. That legislature adopted a depository law designed to
give increased protection to state and local funds. For Hanly’s remarks,
see Indiana, Journal o the House of Representatives, 1907, pp. 23-32,
39, 76-79. The 1907 epository law is to be found in Indiana, Laws
(1907), Chap. 222, pp. 391-404.
27
28
d
122
Indiana Magazine of History
He seems to have been almost uniquely qualified to supply
the initiative to the movement which would culminate in the
establishment of the State Board of Accounts. Summing up
the effect of the Marion County scandals, Noel said, “As a
result of that investigation, more than $60,000.00 was returned to the public treasury of Marion County upon demand.
There were several indictments, but there was no convicti~n.”~~
Noel said that the practical plans to get a bill for uniform
accounting and auditing of public accounts were made at the
final conference of the three-man committee (Ayres, Bobbs,
and Mayer) which had participated in the Marion County
investigation. Noel recalled that at this time the committee
said :
“Now, we have had an investigation of state finances with
some recommendations. We may get some legislative help there.
We have had an investigation of the Marion County Court
House and have cleaned it up for awhile. The same thing that
has been going on in Marion County has been going on all
over the state. We don’t mind the expense we have incurred
in this investigation, but we don’t want to do it next year or
the next year or at any time thereafter; that ought to be a
matter of public concern. What have you to recommend?”
This was my opportunity. I told them then about Mr.
Glossbrenner’s bill introduced in 1899 and the scant attention
it received. I explained to them that there was no reason in
the world that the public accounts should not receive the same
attention as important business accounts; no reason that
there should not be a uniform system of public accounts which
should receive the same kind of audit that commercial accounts
did with large corporations. They said, “All right, can we
bring it about?’’ And they said they would finance a movement
for it, and whether they got by with i t or not, they would stand
behind it.32
In October, 1908, the Merchants’ Association of Indianapolis undertook a delicate and difficult task-that
of
bringing about the enactment of legislation for the general
welfare. Considered more narrowly, the interest might be
classified as that of the taxpayers. Definitely, there was to
be an attempt by the governed group to curb the governing
group by legislation.
A new committee was chosen by the Merchants’ Association to formulate the public accounting and auditing
“XXV Anniversary Addresses,’’ 26.
sazbid., 26-27.
31
The Indiana State Board of Accounts
123
bill and to initiate the movement to work for its enactment.
Noel gives a good account of the make-up of this committee:
Mr. Hugh Dougherty was a banker, one of the best respected men
in the State of Indiana. He was a democrat and very strong
and powerful with the democratic organization. Mr. Evans
Woollen was also a democratic . member of the committee.
Mr. Merrill Moores was selected as a third member of that
committee, and.
. knew more about the local public business,
and the laws relating thereto, than any [other] man in
Indiana. . . . The speaker was the workhorse for the committee and sat with it.
. .
..
I want to give credit here now to one who has not had much
mention in connection with it [the accounting bill], Judge Charles
Hanna.
. Judge Hanna was employed and paid by the
Merchants’ Association to assist us in that work, and he did
the clerical work and a good deal of the best part of the work
done in drafting this bill.33
. .
The earlier committee to investigate graft had been solidly
Republican, with Noel, a Republican, as adviser and chief
worker. The inclusion of Democrats on this new committee
emphasized a point that the committee was to insist uponthat its program was nonpartisan, and strictly intended to
benefit all, not just a small group. As a last bastion, the
committee could assert that i t was at least bipartisan.
The arguments used by the Merchants’ Association committee were based upon the concept that American private
business was good and that American public business-the
operation of g o v e r n m e n t w a s not so good. “Good” here
refers to ethical methods and personnel. The committee
believed that to prefix “business” to a term was to make i t
a good term. “Businessman,” and “business methods” were
terms that in themselves were used to evoke respect and
serious consideration.
When Mr. Bobbs said in a release to the Indianapolis
News of October 14, “At the outset this committee desires
to impress the public with the idea that the action of the
Merchants’ Association is a business movement and not a
political movement,” he was putting the program on what
he considered a high plane. In trying to bring about a
procedural change in the operation of state and local govern33
Ibid., 28-29.
124
Indiana Magazine o f History
ment, which certainly involved the use of political means,
he labeled the method to be used as “nonpolitical.” Obviously,
the change could be accomplished, however, only through the
use of political techniques operating through and upon
politicans, but Mr. Bobbs meant that the initiative and
impetus would be furnished by the business community. The
call to businessmen and business associations to organize
themselves outside the party structures to bring about reforms was a call based upon a higher morality and upon
a greater sense of responsibility than the political parties
could demonstrate. Decency and respectability, impelled by
a crisis, were to move into an area which they usually
avoided, That such an intervention by the business community in the political area was isolated and unique is so
f a r from the truth that comment upon i t is not necessary.
The techniques used in this particular situation, however,
are notable and will be discussed below.
Since the committee assumed that business was good
and that government was not good, or clearly not so good
as business, this major assumption left the committee with
only the task of proving that the proposed reforms were
truly business methods and proposed by businessmen. The
latter point was evident, for the names of the committeemen
were familiar in the Indianapolis business community. The
former point was thought to be relatively easy to establish.
Simple assertion that the reforms were business methods
was considered effective, and such assertion was made to
the general public.s4
To convince the businessmen themselves, the committee
used more than bald assertion. The fullest statement of policy
was made by James W. Noel to the state Federation of Commercial Clubs at Richmond. Noel referred first to auditing
of private firms by outside private auditors when he asked,
“What railroad company doing business in this State, or what
express company in Indiana would allow its business to go on
for years without an audit of its
When Noel
a4According to the Indianapolis Star, October 14, 1908, “most of
these pro osed reforms consist in nothing more than the application of
the simprest and most obvious methods of private business to the
public business.” And W. C. Bobbs stated,.ibia, October 15, 1908, that
“‘the proposition is not one of party politics, but is simply a business
man’s effort to have honest business methods adopted in the management
of county, township and city affairs.’ ”
35 Indianapolis News, November 19, 1908.
The Indiana State Board of Accounts
126
made his strongest point in favor of outside inspection of
offices handling public money, however, he did not use a
business practice for illustration. He turned to the federal
postal system :
“How many postmasters of Indiana are embezzlers? So
very few that Marion county furnishes more cases of dishonesty
in public office than the entire State does with reference to
postmasters. And why? The Government has prescribed forma
of accounts that postmasters must adhere to. When the inspector drops in unceremoniously he does not ask that the cash
be brought to him for inspection. He asks for the key to the
cash drawer, and the cash must be there.86
According to Mr. Noel, who is given credit for being
the individual most responsible for the Public Accounting
Law-and the fact that he was chosen chief speaker at the
twenty-fifth anniversary observance lends support to this
assumption-the public accounting idea was introduced in a
bill by Representative A. M. Glossbrenner, a legislator in
1899. Mr. Noel, who was also sitting as a legislator at the
time, remembered this bill. When the committee of the
Merchants’ Association at the end of its investigations asked
Noel what the next step should be, the idea from Noel’s
political experience was the one the committee chose to act
on. The remedy for graft therefore was not supplied by the
business community. First, non-businessmen were called upon
for advice : Brand Whitlock, mayor of Toledo ; William Allen
White, Emporia, Kansas, editor ; Lincoln Steffens, muckraking
writer and editor; and William T. Jerome, a public official of
New York. According to the News of October 16, 1908,
these were the men to whom the Merchants’ Association
turned. Judge Hanna, a former public officer, was employed
to draft the measure. And Judge Hanna did not turn to
current business practices for a model to make the uniform
accounting and auditing idea concrete. He went to Ohio,
studied the 1902 auditing act of that state, accepted most of
it, and embodied as improvements features which Ohio public
officials had tried but failed to get into their own law.37
The secondary arguments of the Merchants’ Association
were: first, such a multiplicity of systems of public accounting as existed, nearly all of which were inadequate, gave
36
37
I b i d , October 15, 1908.
“XXV Anniversary Addresses,” 30-31.
Indi&na Magazine of History
126
chaotic results; and second, that expense of local government was inordinate. In suggesting reforms, the committee
linked these two reasons and added a moral overtone. The
following release to the News combined the various ideas
neatly: “The spectacle of honest men coming into public
office and being made grafters because of the possibilities
of the system, if not on account of its actual invitation, was
even more appalling than the millions of dollars of increase
in taxes and in the city and the county debt.”38
In his speech at Richmond, Noel went into the problem
at greater length when he said :
“What Indiana nee& first of all is a uniform system of
public accounts for city, township and county officers. There
are in Indiana more than 1,000 township trustees and they are
without any prescribed system of bookkeeping. Some of them,
few of them I believe, do keep intelligent sets of books, but
there are many others who apparently do not keep any books.
There is absolutely no system of auditing the accounts cif
trustees, and unless there is some suspicion of wrong doing the
accounts of a trustee are never subjected to inspection.
“We are asking that the system of uniform accounts be
such that the business of a county office may be audited in
two days instead of in two months. So diversified are the
systems now used in Indiana county offices that it is a
tremendous job to make an audit of the affairs, and especially
is this the case among the smarter officers who belong to
the dishonest class, for they are able to so juggle the accounts
that wrong doing can not be easily detected.
“The rat hole in which most of our taxes go is the local
governments.
It is in the local affairs that the system is
lax and which we now seek to remedy.30
...
The committee chose three methods to rally support for its
program. The first and more generalized approach was to use
newspaper publicity to develop support from the general
public. With the Indianapolis newspapers the committee
was very successful. The Indianapolis Star gave space, both
news columns and editorials, and the Indianapolis News
adopted the Merchants’ Association’s views so enthusiastically
that its vigorous efforts for reform constituted a crusade.
The second method used to solidify public opinion in favor
of the program was organization of the support of civic
groups throughout the city and the whole state. And finally,
Indianapolis News, October 15, 1908.
mZbid., November 19, 1908.
38
The Indiana State Board of Accounts
127
candidates for office were asked to affirm support of the
measure.
Mr. Noel tells how the press relations were handled.
According to him, neither of the two Indianapolis papers
knew exactly where the other paper was getting its copy.
Noel goes on to say, “But Mr. Hilton U. Brown, Mr. William
Bobbs and myself met day after day at 5:OO o’clock in the
evening and provided copy on this particular subject for the
Indianapolis Star one day and for the News the next day;
and so we kept them going.”40 The publication of the official
Merchants’ Association platform in the Indianapolis News
started the newspaper campaign.’’ The amount of material
from the Merchants’ Association which the Indianapolis
papers published is surprisingly large.
In an editorial entitled “A Patriotic Movement,’’ the
Star said:
The Merchants’ Association deserves the gratitude of all
good citizens for the earnest manner in which i t has gone into
the matter of more honest and efficient administration of our
city and county affairs.
. . . . . . . . . . . . .
We commend the committee’s report, not only to the general
public, but especially to nominees of all partiea for the Legislature, whose attention will be drawn to them [the proposed reforms], and, we hope, with favorable response.*2
Since the Star was supporting the local Republican candidates,
and since Republicans had been in office at the time of the
scandals, such publicity as the Star gave to the Merchants’
Association propaganda was putting the public interest above
partisanship. The fuller and more enthusiastic support of
the News, however, may have forced the Star to publish some
of the Merchants’ Association releases. The Star’s position
was an uneasy one, as the following excerpt from an editorial
of October 17, reveals:
Nothing is more preposterous than the claims made by
local Democrats that their county ticket should be elected as
a sort of reward of merit to the party because of the noble
and arduous work of Albert Sahm and Prosecutor Hooten in
unearthing Republican infamy in the Court House and in
bringing its perpetrators to justice.
“XXV Anniversary Addresses,” 27-28.
Indianapolis News, October 13, 1908.
42 Indianapolis Star, October 14, 1908.
(0
41
Indiana Magazine o f History
128
The Prosecutor Hooten-Commissioner McGregor affair required very delicate handling. On one hand, the prosecutor
would be berated by the Star for failing to obtain a conviction; but on the other, Commissioner McGregor would not
be denounced, for after all he had not been convicted.
The Indianapolis News, however, gave wholehearted support to Merchants’ Association reforms. An independent
paper with strong Republican leanings, the News was a
local enigma. The controlling financial interest was not
generally known, and the News vigorously attacked both
Republican and Democratic political figures. In addition to
publishing the Merchants’ Association platform in full, the
News published under a four-column headline-“MERCHANTS’ ASSOCIATION PLATFORM AMPLIFIED”-a
point by point interpretation of the platform. The interpretation of the first of the sixteen planks which follows is typical :
Provide a uniform system of county, township and city
accounts and centralize their supervision in the State Auditor.
[The News then went on to interpret this first point.] Fix
by law a business system and an honest standard which will
make dishonesty and irregularity in public office as difficult
as possible, and which will make its detection easy and
certain.48
Day after day the News published detailed interpretative
editorials in support of the program. The titles tell the story
quite well-“Abolish the Fee System,” “Stockholders’ Meeting
November 3.”44
Probably the most effective support given the Merchants’
Association’s plan was the work of William H. Blodgett. As
mentioned earlier, Blodgett was sent to rake over county
seat scandals throughout the state and to show that local
government was badly in need of state supervision. His
articles were given a prominent place in the News, generally
on the front page. The style of writing that Blodgett used
was neither sober nor factual; it was florid and labored at
times, but its intent was to create public revulsion and disgust
toward dishonest local government and its practitioners.
Blodgett’s lead on a story re-exposing a $41,000 shortage
in a county treasury read: “The chronicles of King Graft
and his consort, Fee Grabbing, including their progeny DeIndianapolis News, October 17, 1908.
*(This editorial refers to the election of 1908.
43
The Indiana Stute Board o f Accounts
129
falcation, Embezzlement, Perjury, Forgery and the delectable
twins, Grand and Petit Larceny, read like a page torn from
the adventures of Captain Kidd.”45 South Bend, Evansville,
Terre Haute, New Castle, Martinsville, Bloomington, La
Porte, Wabash, and Princeton were county seats from which
Blodgett reported scandals before the 1908 election. After
the election he continued his tour of county seats reporting
additional scandals and getting pledges from elected legislators
for support of the Merchants’ Association platform.
The News also cooperated with the Merchants’ Association in reporting on Ohio’s Bureau of Inspection and
Supervision of Public Offices which had been created in
1902. Judge Charles T. Hanna had been sent to Ohio by
the Merchants’ Association to confer with Allen R. Foote, of
Columbus, who had drafted the Ohio law.48 The News sent
a reporter, E. I. Lewis, with him. The success of the Ohio
law was made graphically clear by such headlines as these :
CROOKED OFFICIALS BEHIND THE BARS
Ohio Inspection Law Soon
Finds Out Dishonest Officeholders
Day of the Fee Grabber Has Passed in the
Buckeye State4?
Lewis also wrote hard-hitting prose, though i t was probably
not so inflammatory as Blodgett’s. A typical lead of his
follows :
Ohio has found that she can not make all dishonest public
officials honest by legislation and the result is that the State’s
Bureau of Inspection and Supervision of Public Officials is
responsible for a number of former prominent Buckeyes being
behind the bars of the State’s penitentiary.48
In his final story from Columbus, Lewis reviewed the recent
Indiana scandals and attempted to show that under the Ohio
law they would have been prevented o r would have been
quickly dete~ted.’~
45
Indianapolis News, October 23, 1908.
46
“XXV Anniversary Addresses,’’ 30.
47
Indianapolis News, November 12, 1908.
Zbid.
49 Zbid.
48
I30
Indiana Magazine of History
Once the newspaper campaign was under way, the
Merchants’ Association committee formed a state-wide organization to rally support for its plans. First, Indianapolis
civic clubs and trade associations were enrolled. Seven Indianapolis groups were asked to appoint four representatives
each to meet with four Merchants’ Association representatives
to form a committee of thirty-two. Some of the associations
asked to send representatives were the Commercial Club,
the Manufacturers’ Association, the Central Labor Union,
and the Clearing House Association. Despite the Merchants’
Association’s efforts to widen their base of support in Indianapolis, the multi-organization committee remains shadowy. The newspapers do not state positively that such an
organization came into existence. The Merchants’ Association representatives-Dougherty
and Woollen, Democrats,
and Bobbs and Noel, Republicans-remained the initiating
and working element in the committee. In the Fourth Annual
Report of the State Board of Accounts, a letter from the
four men named above is included. In it the credit is not
taken exclusively by the Merchants’ Association group. “Its
[the Public Accounting Law’s] enactment was proposed
by the Merchants’ Association of Indianapolis and was secured
by the combined efforts of the commercial and industrial
Certainly there was a multipleinterests of the State. . .
organization committee, but whether i t had thiry-two members or not cannot be determined. Mr. William C. Bobbs
was chairman of the combined committees. The executive
committee was composed of J. K. Lilly, chairman, William
C. Bobbs, William Mooney, Henry Kahn, and E. A. Perkins.
Members of the committee on bills were Augustus L. Mason,
chairman, Evans Woollen, James W. Noel, Merrill Moores,
and P. P. Williams. The committee on organization was
headed by F. M. Ayres, with H. 0. Smith, Gustave Schaull,
John Perrin, and Franklin Vonnegut completing the group.
Additional committees on legislation and finance were appointed.s1
There was a vigorous attempt to organize and rally the
state-wide support of the commercial and industrial in10 Indiana, State Board of Accounts, Department of Inspection
and Supervision of Public Offices, Fourth Annual Repwt [1913-19141,
pp. 13, 14.
51 Indianapolis News, November 16, 1908.
The Indiana State Board o f Accounts
131
terests. The Star of October 15, 1908, revealed the plan by
announcing : “Copies of the platform and other literature
bearing on the subject have been sent out to every county
seat town in the state requesting the civic bodies to take up
the matter and work to secure the legislation advocated in
the platform.” Whether the Committee had actually received
considerable support or whether it was using a “bandwagon”
technique, the News of October 16 said:
“The Merchants’ Association is highly elated over the
enthusiastic reception of its platform in every quarter, and
the responses not only from the city but from over the State,
give definite assurance of completing the large organization
contemplated by the association for the purpose of working
this platform into law.”
Support, however, did come to the Indianapolis group. The
newspapers record the following groups that endorsed the
plan : Indiana Retail Hardware Association, civic associations
of Terre Haute and Evansville, the State Federation of Labor,
New Albany Commercial Club, Young Men’s Business Club
and the Retail Merchants’ Association of Terre Haute, and
the Muncie Commercial Club. Doubtless many other groups
also gave their support. There was also developed a statewide organization built upon the thirteen congressional
districts, but very little information concerning i t is available.
This organization was, however, to prove its value when the
need arose.
The Merchants’ Association sent speakers to various
cities of the state to stimulate interest and encourage further
support of its platform. For example, James W. Noel was
sent to Richmond to give the chief address to the Indiana
Federation of Commercial Clubs.62 There are indications that
the Federation was created to organize support for the
Merchants’ Association platform ; in any case, i t endorsed
the association platform. Judge Charles T. Hanna, who was
“employed by the association in the drawing of the measure”
which was t o be submitted to the legislature at the coming
session, spoke to a Tipton audience on the proposed bill and
upon the working of the Ohio law.53
The next step taken by the organization formed by the
Merchants’ Association was the direct one of attempting to
5 2 Z b i d . , November 19, 1908.
~SZbid.,December 19, 1908.
Indiana Magazine of History
132
influence persons who would have determining roles in the
enactment of the measure. The most important person to
convert was, of course, the incoming governor. It was also
necessary to enlist the members of the general assembly,
as well as those who could bring strong pressure directly
upon the legislators.
The Merchants’ Association of Indianapolis naturally
turned first to the Marion County candidates for the general
assembly. The strong public opinion aroused by disclosures of
local graft forced candidates of both parties to support the
proposed reform. On the day following the publication of
the Merchants’ Association platform in the Indianapolis
News, both Democratic and Republican candidates from
Marion County responded. The Republicans agreed to support
the proposed reforms, and the Democrats assented to them
with the statement: “ ‘Permit us to say that we endorse and
commend your suggestions and, if elected, we will use every
effort to carry them into effect.”54
The attempt to enlist candidates and, later, elected officials from elsewhere in the state was not so successful as i t
had been in Marion County. None of the elected legislators
interviewed by Blodgett expressed opposition to the proposal,
but many gave lukewarm endorsements with escape clauses.
Several legislators expressed general approval but said they
would have to see the specific measures embodied in a bill
before they would commit themselves.
Gaining Governor Thomas R. Marshall’s support was
considered as the most difficult, the most delicate, and the
most necessary task of all. Marshall, first of all, was a strong
Democrat, sincerely believing in local self-government. The
ballot box, Marshall thought, was the device to rid a community of incompetent or dishonest officials. The Democrats,
moreover, had justified their local option stand on liquor
regulation by making it a part of local self-government. In
his speech at the anniversary banquet, Adolph Seidensticker
graphically portrayed the Democratic position : “I will call
your attention to the fact we had a big liquor scrap at that
time on the question of county or township local option, and
we Democrats were all shouting from the housetops, ‘Local
self-government ! Local self-government ! The smallest pos64Zbid.,
October 14, 1908.
The Indiana State Board of Accounts
133
sible unit!’ ” 5 5 Though his public utterances had been noncommittal, Governor Marshall was considered hostile to the
proposed reforms. A series of dinners was held by the Combined Committee, to which legislators and public officials were
invited. Finally, a “crucial dinner” (Noel’s phrase) was held
and the governor was invited. Noel was entrusted with the
job of converting him to the reformers’ views. Noel does
not tell what arguments he used, but he does give a vivid
picture :
They put upon me the job of explaining that bill. It seemed
to me that I was on my feet at least two hours under the
interrogation and replying to the criticisms of the governor. He
had a copy of the bill before him. He analyzed it. “It will
not do. [Governor Marshall said.] That is not democratic.
You can’t come into our communities and interfere with our
local self-governments. I won’t stand for it.”
We had to convince him we were not going to control the
discretion of the local officers at all in expenditure of money,
that we simply wanted a system of accounts that was intelligible and uniform so the auditors would know how to examine
them quickly, and all we wanted to do from the state house
was to catch local thieves and require honesty in official life.
Finally, at the end of a long discussion, the Governor said:
“I am for this bill and I will do everything I can to get it
passed.” And from that time on he did.56
The late Ross Teckemeyer, a former field examiner,
believed that Governor Marshall was strongly disposed toward
the idea of state supervision of local officers before the
Merchants’ Association had the public accounting bill drawn.
Teckemeyer wrote :
Governor Marshall while practicing law handled a lucrative
case in a county adjoining his home. His fee was to be paid
through the clerk of the court in that county, but when
Governor Marshall attempted to collect this fee he found that
the clerk had embezzled all the trust funds held by him and
that the fee to which Marshall was entitled was among the
funds embezzled. The only recourse he had was against the
clerk’s bond, which had been fixed by the local county officers
in such a way that it paid about ten cents on the dollar. Upon
becoming Governor, Marshall was very anxious that some
supervision be made of local officers. . .57
.
Mr. Teckemeyer was on assignment in 1923 in the county
where the embezzlement had occurred. Having heard the
“XXV Anniversary Addresses,” 16.
Ibid., 33.
57 From a n unpublished manuscript statement on administrative
agencies of the state of Indiana, by Ross Teckemeyer, which Teckemeyer
loaned this writer.
56
56
Indiana Magazine o f History
134
story of Marshall’s loss from several people in the courthouse,
he checked the records and found it to be t r ~ e . ~And
a
though
Noel flatly states that the governor firmly opposed the idea
of state supervision of local officers when i t was originally
presented to him, Governor Marshall’s own unhappy experience with one local officer may have made him receptive
to Noel’s arguments.
The third element in the campaign was the plan for
conciliation, or at least neutralization, of the county and
township officers. These were the groups that had killed
the Glossbrenner bill in 1899. Under the pressure of these
groups, supported by the representatives of the office supply
houses, the legislature had kept the Glossbrenner bill in committee. In their dealings with these groups, the Merchants’
Association committee used a legislative technique. Various
groups of county officers appointed committees to meet with
the association’s legislative committee. On December 18,
1908, the News reported that the Association of County Assessors voted unanimously to support the Merchants’ Association bill; the County Auditors’ Association and the County
Clerks’ Association also voted unanimously to support the
bill. The Indianapolis News of December 23,1908, in reporting
the action, stated that “more than forty clerks and auditors”
voted in support of the bill. The number attending, of course,
was a good bit less than one-quarter of those eligible to attend.
Still, the Merchants’ Association had reason to think that the
bill would be enacted without strong opposition.
On January 1, 1909, the public accounting bill drawn
by the legislative committee of the Combined Committee was
published in full in the Indianapolis News. The provisions of
this bill for state supervision of public offices and institutions
in Indiana had several sources. The Glossbrenner bill of
1899, mentioned earlier, had supplied Noel with the basic
idea. But a similar bill enacted by Ohio in 1902 affected the
drafting of the Indiana bill more directly than any other
single i n f l u e n ~ e . ~ ~
Ibid
In the first session of its legislature in 1890, however, Wyoming
had created the office of state examiner; its holder was to be a “skilled
accountant” appointed by the governor. In addition to prescribing a
“correct, and as far as practicable, uniform system of bookkeeping by
state and county officers,” he was to inspect the accounts of the state
and county treasurers. Moreover, he was required to inspect all banks.
Wyoming, Seasion Laws (1890), Chap. 84, pp. 358-362.
68
68
The Indiana State Board of Accounts
135
The Ohio law establishing a Bureau of Inspection and
Supervision had been drafted by Allen R. Foote, of Columbus,
then president of the International Tax Association, and
Lawson Purdy, who had served as comptroller of New York
City for many years.6o But Ohio was not so fortunate as
Indiana had been, for James W. Noel remembered that: “The
law formulated by Mr. Foote and Mr. Purdy and public
spirited citizens, in Ohio got into a legislature that was not
bipartisan, and i t was butchered pretty nearly as badly as
the republican senate butchered this [Indiana] bill before i t
got over to the house.”61
The Ohio law established a Bureau of Inspection and
Supervision of Public Offices under the direction of the
auditor of state. The authority to prescribe uniform systems
of accounting was granted, as well as the duty of inspecting
all state and local offices. Refusal or neglect of public officers
to follow the bureau’s instructions could be punished by removal from office.ez Though greatly influenced by the Ohio
law, the Indiana act varied significantly, and the changes were
designed to create a stronger agency than the Ohio law
provided.
The Indiana law provided for a Department of Inspection
and Supervision (a department instead of a bureau) to be
headed by a state examiner appointed by the governor. Two
deputy examiners of differing party affiliation were also to
be appointed by the governor. The state examiner was to
receive $4,000 a year and the deputies $3,000. Field examiners were to be appointed by the state examiner and be
paid $10 for each working day, which was double the daily
salary allowed Ohio field examiners.
Instead of being within a department and headed by
an ex: officio elective officer, as was the case under the Ohio
law, the Indiana Department of Inspection and Supervision
of Public Offices was placed under the State Board of Accounts. Composed of governor, auditor of state, and state
examiner, this board was charged with formulating, prescribing, and installing a system of accounting and reporting
which would be uniform for each office and public account
in the same class.
60
“XXV Anniversary Addresses,” 29-30.
30.
Ohio, Generat and Local Acts (1902), Vol. XCV, pp. 511-515.
61Zbid.,
62
136
Indiana Magazine o f History
As in the Ohio law, provision was made for separate
accounts for each department, undertaking, institution, and
public service. Comparative statistics were to be compiled
from financial reports as the Ohio law also stipulated. The
Ohio law did not so clearly grant the auditor of state the
power to prescribe the forms used as did the Indiana act.
Powers and duties of the field examiners are outlined
in much greater detail in the Indiana than in the Ohio act.
The Indiana penalty section provides a fine of $100 to
$1,000 and removal; whereas the Ohio law has only removal
from office as penalty for neglect o r refusal to cooperate
with the examiners.
The Indiana law requires that the record of fees and
salaries of public officers be available to the public; no such
provision existed in the original Ohio law. Other provisions
made in Indiana, but not in Ohio, include a penalty for
bribery and definitions of municipality, public office, and
public service industries. The Indiana law also provides
that the uniform bookkeeping system may not be copyrighted. The Ohio law calls only for annual examinations;
the Indiana statute provides that examinations “shall
be made without notice,” and the giving of notice, directly
or indirectly, carries a $500 fine or six months imprisonment.
The original Indiana act is longer (23 sections to 10) and
more complete than the Ohio statute.
One notable advance over the Ohio bill was embodied
in the Indiana law’s provision that field examiners were to be
selected only after passing an “open, competitive examination . . . practical in character.” Such a provision represents
the first application of the merit principle in Indiana state
government. The merit idea, i.e., that “all appointments of field
examiners shall be made solely upon the ground of fitness
and without regard to political affiliation,” was weakened,
however, by the stipulation, “excepting that no more than
one half of the number of field examiners employed at any
one time shall belong to any one political party.” This
bipartisan application of a merit principle, paradoxical as
the phrase is, was the common sense sugar coating that made
the idea acceptable. This merit principle of selection, provided for in Section 8, though weakened by the bipartisan
stipulation, certainly has been of significance in establishing
The Indiana State Board o f Accounts
137
the high esprit de corps for which the Department of Inspection and Supervision of Public Offices is noted.
The source of the provision for the recruitment and
selection of field examiners cannot be determined. It was
not in the bill of the Combined Committee published in the
News of January 1, 1909. Neither was it added by Senate
or House amendment; therefore, perhaps it was in the bill
as introduced by Senator Oscar E. Bland on January 12.
Whether the bill was revised by one of the members of the
Combined Committee or whether some outside mind made
this valuable suggestion cannot be determined. No records
can be discovered ; interviews and correspondence with the
few possible sources do not reveal to whom credit is due.
Possibly Foote, of Columbus, or Purdy, of New York, where
a merit system had already been in effect for more than
twenty-five years, was responsible for the recruitment provision. O r perhaps Lincoln Steffens had written to Judge
Hanna, Bobbs, or Noel between January 1 and January 12.
Certainly this idea, one of the most distinctive in the law,
was a late thought. It does not appear in any form whatever
in the amplification of the Merchants’ Association platform,
in Noel’s speech at Richmond, nor in any of the copy with
which Noel and Bobbs supplied the Indianapolis newspapers.
By January of 1909, the bill for uniform accounting and
the inspection of public offices prepared by the Combined
Committee was a matter of public record. It had been shown
to the county and township officers ; i t had been published in
full in the Indianapolis News. A strong organization to publicize the reforms had carried information into every county.
The Combined Committee now had only to decide in which
house the bill should be introduced and by whom.
In Marion County the investigation and exposure of
graft in local offices, action which had been supported by
the Merchants’ Association, resulted in a very strong swing
from the Republicans to the Democrats. For example, an
editorial in the November 4, 1908, issue of the N e w s said,
“The voters of Marion County were determined to clean out
the court house. They made a thorough job of it.” Though
the Committee had made a point of the bill’s nonpartisan
nature, i t was decided that the Republicans most needed to
be conciliated. A member of the 1909 general assembly,
Adolph Seidensticker, recalled that since the Republicans
Indiana Magazine of History
138
had retained control of the Senate, “it was thought expedient
to have it [the bill] introduced by Senator [Oscar E.] Bland,
a pretty staunch Republican, afterwards congressman from
Linton, Indiana.”63 Marion County legislators had publicly
announced support of the reforms and since the bill was
chiefly developed by Indianapolis men, i t was thought expedient to have a legislator from outside Marion County
introduce the measure. In addition, Senator Bland led the
Senate alphabetically and thus could introduce the measure
immediately after the traditional bill to pay the legislative
expenses.
In the House careful preparation was made, as Seidensticker revealed :
Then I began to play a few of my own cards, because I
was sold on this proposition. In connection with the speakership fight, I helped swing the Marion County delegation of
eight votes to Tom Honan and asked as my pay for that that
I be appointed on the Committee of Township and County
Business, because it had been determined in advance this bill
creating the State Board of Accounts would go to that committee.64
Preparations had, however, been made in both houses. And
Governor Marshall strongly supported the bill in his message
to the general assembly. The theme of his speech was built
upon the question, “Can we not have integrity, competency,
good service and economy in public offices in Indiana?”
Developing the point “integrity,” Marshall said :
In the interests of integrity I recommend that you put every
official in Indiana upon a fixed, definite and certain salary,
to which, by no construction of law, shall any sum be ever
added; the adoption of a uniform system of bookkeeping so
guarded that it can not be copyrighted; the examination of
public records at irregular intervals in such a manner as will
not interfere with the right of local self-government; the
auditing of all public accounts, showing in every instance
upon such account the original contract or the section of the
statute authorizing the payment of the money and requiring
all vouchers issued in pursuance thereto to have a like
showing.
..
The bill was introduced by Senator Bland on the first
day that bills were received, Tuesday, January 12. It became
“XXV Anniversary Addresses,” 15.
Zbid.
66 Indiana, Journal of the Senate, 1909, pp. 96, 97.
6s
64
The Indiana State Board of Accounts
139
Senate Bill Number Two and occasionally was referred to as
the “Bland Bill.” Both the Indianapolis News and Star,
however, called it the “Merchants’ Association bill.” It was
referred to the Committee on County and Township Business,
and on January 27 the bill was reported out. Majority and
minority reports were offered. Of the eight Republicans on
the committee, six (Edgar D. Kling, Oscar E. Bland, T. R.
Brady, Clamor Pelzer, Edward E. Moore, and Donald
McCallum) recommended that the bill “do pass”; two Republicans (Linton A. Cox and Ralph K. Kane) did not sign
this majority report. Two Democrats (Samuel L. Benz and
William F. Ranke) recommended that the bill be postponed
indefinitely. Harry E. Grube, the third Democratic member
of the committee, did not sign the report. The minority
report was voted down and the majority report accepted.
The first revelation of party attitudes, then, showed that the
Republicans favored the bill, while the Democrats opposed it.
The bill passed the second reading on February 2 without
amendments except for grammatical changes by Senator
Kling. On February 3, Senator Bland moved that the bill
be made a special order of business for February 10. On
February 10, Senator Mattingly, Republican, offered amendments that weakened the bill considerably. The vote on
whether the amendments should be accepted was strictly
along party lines, with the Republicans in support of the
amended bill and the Democrats in opposition. A notable
shift had occurred, however. In the committee and on the
second reading the Republicans had supported the bill as
written by the Combined Committee’s specialists. Now they
reversed themselves and supported an entirely new version,
one which badly weakened the plans for uniform accounting
and the inspection of public offices. Just what caused the
reversal by the Republican senators cannot be determined,
but there is some evidence indicating the reason for the
switch.
Adolph Seidensticker, a Democrat, spoke of the opposition the original bill encountered: “And these township
trustees had been busy and the clerks had been busy and
the State Auditors’ Association had been busy, and there
were more rocks in the path of that bill than you ever had
conception of.”s6 When it is recalled that Seidensticker was
66
“XXV Anniversary Addresses,” 16.
Indiana Magazine of History
140
speaking before a highly select group, one that would award
merit to those persons and groups that supported the act
creating the agency that employed them; and when it is
remembered that Seidensticker revealed the hesitation and
reluctance that the Democratic legislators showed toward this
bill, then his evidence seems valuable.
Noel, a Republican who was very proud of the State
Board of Accounts and his part in the creation of the law
establishing it, substantially echoes Seidensticker’s views :
What the Republican senate did to that bill was something
terrible. It had had the assistance of the supply houses, the
publishing houses, the township trustees and the county officers’
association in just committing absolute destruction. It was
mutilated and sent to the House worthless.6‘
Blodgett of the News, in his on-the-spot observations, gave
the same interpretation :
The bill was introduced in the Senate by Senator Bland,
a Republican, and no one for a moment supposed that there
would spring up any great opposition to a measure that had
the indorsement of the taxpayers of the State, but it was not
long until the hydra-headed county officers’ association began
getting in its work.
. . . . . . . . .
. .
Then came an assault on the bill. The county officers,
the sheriffs, the auditors, the clerks, the recorders, township
trustees and other minor officials started a war on the bill,
and some of the State officers and some of the employees of
the State officers joined in the hue and cry and tried to mob
it, as it were. Then the Republican Senators began playing
politics.
.68
..
The two Indianapolis newspapers editorialized that the
Republican senators had amended the Merchants’ Association
bill into a partisan measure. The Republican Star said, “It
is greatly to be deplored that the party leaders in the Legislature seem determined to make a party question of the
merchants’ public accounting bill, and especially deplored
that the Republican leaders seem to have been the first to
move in this direction.”s8 The independent News was more
stinging in its attack on the Republican senators:
67
68
68
Ibid., 33-34.
Indianapolis News, February 26, 1909.
Indianapolis Stw, February 11, 1909.
The Indiana State Board of Accounts
141
No one of all the disinterested business men who shared in
the preparation of the bill saw or dreamed of politics in it.
It was introduced by a Republican Senator, recommended by
a Republican committee and advanced to third reading by a
Republican Senate, all in its original nonpartisan form. The
Senate might, therefore, have passed the bill without raising
question o r objection, but in a n evil hour the politicians in and
outside of the Senate sought to convert the bill into a political
instrument.’O
The comment of the legislators is somewhat scanty,
but what evidence exists points in one direction-the
Republican senators, under political and economic pressure,
weakened the bill after the second reading. Senator Frank
M. Kistler (Democrat) and Senator Bland’s sparring over
the amended bill was reported in the Star:
“Did not the bill provide that the Governor make the
appointments when you introduced it?” asked Senator Kistler.
“Yes; but I had a better opinion of the Governor then
than I have now,” was the reply.
. . . . .
“The bill was a partisan measure when it was introduced
and it is a partisan measure now,” said Senator Bland, “but
the other side is objecting now because i t is a Republican
party measure instead of a Democratic one.”’l
This last statement of Senator Bland’s is a rather astonishing
admission; but, because of the shift in the party attitude, he
was placed in an embarrassing position.
The amendments which weakened the bill were written
by a committee of seven appointed at a Republican caucus.
The committee, headed by Senator Springer, was composed
of Senators Moore, Mattingly, Bland, Crumpacker, Kling,
and Pearson. Just who made the specific decisions on the
changes and whether these changes were actually the invention of committee members or of outside persons with influence in the committee cannot be determined. Whatever
the inspiration or sources, however, changes were made by
a responsible Republican group and became official Republican
policy.
The committee’s objections to the original bill seem
interesting and significant, because some of them embody
70
‘1
Indianapolis News, February 26, 1909.
Indianapolis Star, February 24, 1909.
Indiana Magazine of History
142
objections that the State Board of Accounts was to face in
its early years. The most important change proposed by
the Republican Senate was that the board should be formed
by the secretary of state, state treasurer, the governor, and
two deputies of opposite political faith. The elimination of
the office of state examiner, with strong power clearly in
the hands of its holder, would have weakened the agency
tremendously. The Republican senators’ argument was that
the move was prompted by economy. This point was emphasized strongly because one of Governor Marshall’s campaign pledges had been that he would operate the state government with greater economy than had his Republican predecessors. The board that was to be created by the Republican
senators’ bill would at that time have been dominated by
the Republicans. Under the Merchants’ Association bill
the governor would of course be in a position to dominate
the board. The Republican amendments also changed the
title from State Board of Accounts to Board of Inspection
and Supervision.
The second important amendment concerned the field
examiners. The one hundred field men allowed by the original
bill was cut to twenty-five in the Senate bill, and their pay
was reduced from ten dollars to six dollars a day. There were
twenty-four amendments in all, one of them a new section
providing that anyone failing to comply with the forms or
rulings of the board was guilty of a misdemeanor and subject
to a $100 fine.’*
This amended bill was passed by the Senate on February
10 ; the vote of twenty-seven to twenty-three was strictly
on party lines. In the House, where the Democrats had a
sixty to forty majority, the bill was referred to the Committee
on County and Township Business, headed by Representative
Seidensticker. The official action of the Democratic legislators, from the viewpoint of one sympathetic to the State
Board of Accounts, was above reproach. But twenty-five
years after the event, Seidensticker revealed that his party
carried out this reform with considerable hesitation and
under pressure that threatened an intra-party split. His
remarks, in the proceedings of the twenty-fifth anniversary
banquet of the State Board of Accounts and in an interview
72
Indiana, Jownu~.lof the Senate, 1909, pp. 535-541.
The Indiana State Board of Accounts
143
granted the writer in November, 1947, emphasized Democratic
reluctance.
The Committee on County and Township Business
changed the Senate-amended bill back to its original form.
“We politely made a committee report in which we recommended that they strike out all of the enacting clause and
put i t back in the original bill,” Seidensticker
But
the party attitude had not yet become fixed. The Democratic
legislators held a caucus on the Senate’s bill, discussing it in
the light of the measure as originally drawn. According to
Seidensticker, most discussion of the original measure must
have been negative, for only two members of the caucus spoke
in favor of the bill as originally drawn. When a vote was
taken to establish the party policy, only eight men were in
favor of the bill as drawn by the Combined Committee. According to Seidensticker, the rest of the Democrats hid behind
the freedom-of-local-government idea. Though lengthy, the
night caucus was therefore highly negative. “So, here I was
with all my dreams and plans seemingly flattened
Seidensticker said at the twenty-fifth anniversary banquet.
How the Democratic viewpoint was changed can best be
told in Seidensticker’s words :
I n the morning I went to the Governor’s office, and the
Governor said, “I will see some of the local Democrats, and
you see them get together at noon.’’ So, we had a caucus in
the Speaker’s room Mr. Fogarty happened to be the democratic
county chairman. We had James Holson, James L. Keach.
They c a m and laid down the law from a political standpoint,?=
what they thought about the passage of this bill. It was
determined at that caucus a committee of seven would be
appointed. I was the one who made the motion to meet with
the Governor.
We went to the Governor’s office that afternoon, and I
was the only one of the committee of seven that was favorable
to the bill. We sat in the Governor’s office from 4:OO o’clock
until 7:OO. At that time if I didn’t have any admiration before
that, I did have, but I just became absolutely sold on Governor
“XXV Anniversary Addresses,” 16.
Ibid., 17.
75Italics are this writer’s. I n a n interview, November, 1947, Mr.
Seidensticker said that, as he remembers it, the Marion County politicians
did not say a word about the intrinsic value of the bill, They argued
strict political expedience, i.e., pass the bill as originally written and get
credit for it, or force the Republicans to kill it and then saddle them
with the blame.
73
74
Indiana Magazine of History
144
Marshall, because single handed, alone, and he was dealing
with some pretty good men-Mr. Stotsenberg [ Stotsenburg] was
on that committee, he was a senator; [Frank M.] Kistler, of
Logansport, a keen lawyer-single
handed, alone, Governor
Marshall met every objection, and there were plenty of them,
to that bill. And he bowled them over, one after another.
When we went out of there, that committee was thoroughly
whipped. And they made a unanimous recommendation for
the passage of the bill, and i t was passed.
That is a little legislative history some of you never heard
about.70
Seidensticker mentions that except for himself, whom
he referred to as “a young punk,” the committee of seven
that met with the governor was made up of the outstanding
leaders among the Democrats. His inclusion on the committee
resulted from his being chairman of the House Committee on
County and Township Business. After meeting each argument the committee presented, Governor Marshall, according
to Seidensticker, insisted that the Democratic legislators get
behind the bill as originally drawn.
The House passed the bill as amended by its committee,
i.e., restored to the form in which it was introduced by
Senator Bland, by a seventy-six to eight
Twenty-three
Republican representatives joined fifty-three Democrats to
give i t a top-heavy majority. Eight Republicans voted against
it. There was no explanation by the representatives who
voted against the measure, but some who voted “aye” explained their votes. Representative Talbott (Republican) , of
Orange County, declared that the House-amended bill had
very little chance of being passed and went on to say, “ ‘If I
thought it stood any show of becoming a law, I would vote
against it,” he said, “but as I have no fear of its passing, I
will vote ‘aye,’ because I favor a measure of this kind when
i t is drawn in the right way.’”78 The Star of February 24
jibed at such an attitude when i t stated: “One of the most
painful spectacles at the State House is the sight of those
stalwart Republicans who are strongly in favor of public
accounting, but not of the bill to carry i t into effect.” Several
Democratic representatives stated that they thought the
76
“XXV Anniversary Addresses,” 17-18.
77 Indiana,
962-963.
‘8
Journal of the House of Representatives, 1909, pp.
Indianapolis Stan-, February 21, 1909.
The Indiana State Board of Accounts
145
salaries of the state examiner and the field examiners were
too high.
The House-amended bill was returned to the Senate
February 20. After a conference, the Democratic senators
announced that they would favor the bill as returned from
the House. The Republican senators, quite evidently under
heavy pressure from both sides, had difficulty in deciding
on their proper course. According to the Indianapolis Star
of February 24, they had held three conferences without
reaching a decision. Debate on the bill brought fireworks
to the Senate floor. “Consideration of the merchants’ public
accounting bill yesterday caused by f a r the most spirited
debate of the session in the Senate.”7g All of the fireworks,
however, were not confined to the formal session. Noel was
considered as being too vigorous in his presentation of the
merits of the bill as originally drawn and not sufficiently
patient with the opposition, for the Star reported :
Noel took exceptions to [Senator] Springer’s calling him a
“hired attorney,” and became so earnest in his arguments that
other members of the Senate feared he was going to strike
Springer, and he was pushed, protesting all of the time, out
of the chamber proper into a side lobby.80
By February 24, after considerable maneuvering, the
Republican Senate had agreed to accept all of the House
amendments except the three-man board, which would be
dominated by the governor and the state examiner whom he
appointed. Having given way on every other point, the senators
felt the House should concede to this alteration in the original
plan. The House was invited to appoint members to a conference committee on the bill. The House leaders were obliged
to decide whether to accept the Senate’s version of a bipartisan
board, which was in the Indiana tradition but which would
certainly weaken the effectiveness of the contemplated agency
through diffusion of responsibility, or to defy the Senate
completely and risk affronting that body so that no legislation on public accounting would be passed.
Speaker Thomas M. Honan and other Democratic leaders
decided to stand firm on their amended bill, i.e., as drawn by
79
Ibid., February 24, 1909.
80
Zbid.
Indiana Magazine of History
146
the Combined Committee. Representative James Garrard
moved
“that i t is the sense of the House that the House stand by
its amendments to Senate bill No. 2 and that the request of
the Senate for a conference on said amendments be not complied with, and that the clerk of the House be instructed to
notify the Senate accordingly.”81
Republican representatives were less inclined to insist that
the bill be left as i t was. For example, Representative King
stated that he considered such a move to be unwise, saying that a conference could do no harm and that refusal to
meet the Senate halfway would impair the bill’s chance of
passing. Representative Talbott said, “ ‘I assume that we wish
to do something in the way of a public accounting bill. The
adoption of this motion will absolutely defeat the bill.’ ”8z
Representative William E. Wider felt the salaries provided
were too high; Representative Miles J. Furnas thought that
some compromise was necessary. But Democratic Representative Garrard insisted that since the bill had been “thrashed
out on the floor by the ablest members in the House, there
was no reason for receding from the position the House had
taken.”83
The vote on Garrard’s motion was nearly a party division, only King voted with fifty-seven Democrats. The remaining thirty-nine Republicans voted against the motion,
making a fifty-eight to thirty-nine split to carry the motion.
Senate indignation was high. The immediate reaction, as
reported by Blodgett in the Indianapolis News, was that the
House had gone too far. “ ‘We have offered to meet them,’ ”
the Republican politicians said, “ ‘and they will not meet us.
Now, who is to blame if the merchants’ accounting and
inspection bill fails to become a law?’
Certainly if action
had been taken on February 25 the Senate would have killed
the bill. But a great deal of pressure was put on the Senate.
Noel says :
1 don’t think there was ever such a lobby of good citizens from
Marion County and from the state-bankers,
officers of
chambers of commerce, and others-as there was on the day
when this bill was called up. We had a lot of republicans who
Indianapolis News, February 26, 1909.
Zbid.
85 Zbid.
82
8’
zbid.
The Indiana State Board of Accounts
147
did not want to give the democrats the advantage of having
passed this kind of bill.85
The Indianapolis newspapers vigorously attacked the
Senate’s stand. Blodgett of the News naturally led with a
long story that threatened executive reprisal and implied
political motivation on the part of the Republican senators.
Blodgett threatened to disclose legislative nepotism and
charged that the senators had deliberately allied themselves
with dishonest local officials when he wrote :
The crossing of the roads has been reached by the Republican members of the Senate and the question up to them
now is whether they will part company with the people of
Indiana and travel with the politicians and a lot of men who
make public grafting a business, or will stand by the taxpapers [sic] of Indiana and pass the merchants’ public accounting bill.86
The senators reconsidered their stand against the Houseamended bill. On February 27, 1909, Republican Senator
Cox, of Marion, moved “that the Senate recede from the
position it has heretofore taken by which it refused to concur
in the House amendments to Engrossed Senate Bill No. 2,
and that this Senate do now concur in said House amendments to said Engrossed Senate Bill No. 2.”8r Fifteen Republican senators joined the twenty-three Democrats to make
thirty-eight votes in favor of the motion. Six Republican
senators voted in opposition, and six more did not vote.
Governor Marshall signed the bill March 4, 1909.
85
86
87
“XXV Anniversary Addresses,” 34-35.
Indianapolis News, February 27, 1909.
Indiana, Journal of the Senate, 1909, p. 1418.
148
Indiana Magazine of History
THE LAWIN OPERATION
Governor Marshall appointed William A. DeHority,
former treasurer of Madison County, as the first state examiner. According to Edward Brennan, one of the field
examiners who qualified on the original examination given
by the State Board of Accounts, DeHority had developed a
system by which the county auditor and treasurer acted as
a check on each other. The value of this contribution to local
government was diminished considerably, according to
Brennan, by the fact that no one but DeHority could make
the system operate satisfactorily. Nevertheless, in an interview, Brennan referred to DeHority as a man of “great common sense.” His actions as first state examiner seem to bear
out this judgment. He guided the new ,agency with caution;
and from the very first, conciliation of public officials became
standard procedure. Such an attitude seemed advisable for
an agency created only after a bitter legislative struggle and
supported chiefly by reformist businessmen but opposed by
well-organized politicians.
The first meeting of the Indiana State Board of Accounts
was held at 1O:OO A.M., June 9, 1909, in Governor Marshall’s
office.88 Present were the governor; John C. Billheimer,
auditor of state; DeHority; his two deputies, John H. Balt
and William M. Fogarty, who was soon to resign ; and Albert
New, legal counsel to the governor. The prospects for the
new agency were not promising. Temporary quarters had
been assigned to it in Room 56 of the Statehouse in the north
lobby of the House of Representatives. No office staff
existed, and worse still, no funds had been provided by the
legislature to hire one. In the bitter struggle to get the bill
through, its supporters had overlooked this detail. Governor
Marshall, however, provided from his contingency fund for
the office expenses. It was necessary to find permanent
quarters, to recruit and train a staff of field examiners, and
to interpret the powers given by the law to the board and
the state examiner. Albert New promised a compilation of
the law at an early meeting. This meeting, scheduled for
June 12, was not held because the governor and auditor were
88 Minutes of the Meeting of the State Board of Accounts, June 9,
1909 (filed in the office of the State Board of Accounts, Statehouse,
Indianapolis). These records will be hereafter cited as Minutes.
The Indiana State Board of Accounts
149
not able to attend. At the next meeting the board was
organized ; Governor Marshall became president and Millard
F. Cox, the newly appointed clerk, became secretary to the
board.88 Then DeHority brought up the recruitment of field
examiners. According to the Minutes :
After discussion, on the initiative of the governor it was
ordered that the Auditor of State, the State Examiner and
shall prepare a series of questions
the Deputy Examiners
to be propounded to applicants for field examiners to determine
their qualifications, such questions to be reported to a full
meeting of the Board for approval.eO
...
The Minutes record that at the meeting of July 22 State
Examiner DeHority was empowered to hire “a clerical assistant, possessing a thorough knowledge of stenography, to be
paid not exceeding seventy-five ($75) dollars per month.”
DeHority reported further that he had sent a general letter to
all public officials in the state explaining the purpose of the
State Board of Accounts and asking these public officers for
their support and cooperation. Various blanks and forms for
financial transactions were considered for adoption by the
board. In addition, plans and methods for conducting the
work of the Department of Inspection and Supervision of
Public Offices were discussed.
At the meeting of September 20, 1909, DeHority reported
that he had hired a stenographer; accounting and reporting
forms were approved. More importantly, notice of a n examination of applicants for the position of field examiner
had been given according to law, and an examination was
scheduled for September 28 and 29 in the House of Representatives. At this meeting the board established the rules
for the examination of candidates. Some of these rules were:
1. The time and place of the examination shall be announced ten days in advance in the three largest
Indianapolis newspapers.
2. Each applicant must fill out and file an application
blank with the State Examiner.
3. The application form shall call for the following
information : age, political affiliation, marital status,
employment record, and recommendations.
WZbid., July 1, 1909.
90 Ibid,
150
Indiana Magazine of History
Among the rules governing appointment, Number Seven
is the most significant:
The results of the examination shall be carefully canvassed
and compared by the State Examiner for the purpose of
determining which of the applicants are shown thereby to be
best fitted to discharge the duties of field examiner, taking
into consideration the answers to the preliminary questions
contained in the application form, and such other information
as to the skill and integrity of the applicant as the Board
may possess o r obtain, and from those who have the required
degree of fitness and capability he shall appoint, according
to the law, such numbers of field examiners as the Board shall
at any time, auth0rize.g’
This provision makes the examination a combination of an
“assembled” and “unassembled” test, as these terms are used
in public personnel administration. In the first type, the
applicants are rated solely upon the results of an examination
they have taken together. In the unassembled type, the
candidates are rated on their education and experience.
Allowing the state examiner freedom to weigh the background, recommendations, personalities, and experience of
the candidates gave him the power to select men who would
represent the agency properly. If the results of the written
examination had been exclusively the determining factor,
the appointment of men with unpleasant personalities could
have added to the ill will which was inevitably to come to the
department.
At the December 10 meeting of the Board of Accounts,
DeHority announced that he was ready to make his appointments. The board, however, “taking into account the number
of public offices in the state subject to examination and the
probable length of time required in each class,” decided to
give fuller consideration to the number of field examiners
to be appointed. At the following meeting, the board empowered DeHority to appoint one hundred field examiners
if there were that many fit applicankU2
According to Brennan, “around two hundred” applicants
assembled in the House and Senate chambers for the first examination.u8 There is no record available to show how many
field examiners were appointed following the examina01 Ibid., September 20, 1909.
* * I b i d , December 18, 1909.
@aInterview with Edward Brennan, January, 1948.
The Indiana State Board of Accounts
151
tion. In his first report DeHority mentions that “many” who
were appointed resigned before making a single examination.
The average number of field examiners employed through
1910 was fifty-two. The way in which this statement is
made suggests that the indoctrination program was very
demanding and strenuous :
Previous to assignment [January 8, 19101 the field examiners were instructed as to their duties and responsibilities.
In face of the fact that every precaution was taken in the
selection of such examiners, many resigned, acknowledging that
notwithstanding many years of successful experience in commercial accounting and experience in public office they did
not feel fully qualified to pursue the line of work required by
the accounting
Brennan, however, indicated that he had little respect for the
indoctrination program. He felt that the first field examiners had to “sink or swim” themselves. There was not
much help from headquarters and a great deal of hostility
in the field from the public officers whose accounts were
to be examined.
It was necessary that the board determine policy before
work could actually be started by the field examiners. At
the December 22 meeting of the board, Governor Marshall
moved, and the board approved, that “mere irregularities”
which violated the strict letter of the law but did not deprive
the public of full value of public money should not be
prosecuted. Field examiners were to help public officials
make proper entries. Prosecutions were not to be instituted
except against dishonest officials, and actions were not to
be brought against public officials unless the record should
fairly disclose that such officials had been using their offices
for private gain.e6
The Minutes do not mention the decision to send out a
Republican and Democrat together as a team. DeHority,
somewhat casually, mentions that this practice was a departmental decision :
As a safeguard against deviation therefrom in the administration and operation of the law, all examinations of public
records have been made by field examiners working in pairs,
each of the two men being of opposite political faith. Such
9 4 Indiana, State Board of Accounts, Department of Inspection
and Supervision of Public Offices, First Annual R e m , 1910, p. 10.
96 Minutes, December 22, 1909.
152
Indiana Magazine of History
was deemed best by the department to insure examinations
and reports to be free from political bias or prejudice; also
to reduce to a minimum the cost of examinations, two men
working together in auditing and checking being able to do
much more in a day than it would be possible for one man to
accomplish in two days.96
Brennan stated that Governor Marshall was responsible for
this policy in the Department of Inspection and Supervision
of Public office^.^^ There is no evidence, however, in the
rather carefully kept early Minutes to corroborate this
opinion.
Nonetheless, Governor Marshall’s role in the first period
of the public accounting law was an important one. The
Minutes reveal that he attended sixteen meetings in the
time between June 9, 1909, and December 24, 1910. Though
the last six of these meetings were only formal affairs to
approve blanks, the Minutes for the preceding meetings show
Marshall as a leader in policy formation. Marshall seems to
have established the whole tone of DeHority’s administration,
which was characterized by conciliation.
The pioneering field examiners meanwhile were running
into difficulties. First, the examiners had to learn their
jobs ;labor was divided to simplify their duties but even so the
task was not simple. Two-man teams of examiners were
assigned to the townships, civil and school. Other teams
were assigned to county treasurers and auditors. A third type
of team audited the accounts of the clerks and sheriffs.
After mastering their jobs, i.e., after making several audits,
the treasurer-auditor team would split up, as would the clerksheriff team. New teams were then formed by a treasurerauditor man and a clerk-sheriff man, each teaching his partner
and learning from him. After mastering the substantive and
procedural aspects of auditing the four county offices, a
county man was paired with a township man, once again to
teach his partner and to learn from him. Only by 1914 did
the two-man teams of field examiners become sufficiently
expert to go into a county seat and audit all county and
township public accounts. Specialized work in the larger
96 William A. DeHority, Three Yews of Expsrience with the Public
Accounting Law (Indianapolis, 1912). DeHority gave this address
before the Indiana State Association of County Commissioners at
Richmond, Indiana, on September 26, 1912.
97 Interview with Edward Brennan, January, 1948.
The Indiana State Board o f Accounts
153
municipalities, state offices, and state institutions were likewise mastered by special field examiners ; ordinary field
examiners were not assigned to them.g*
Secondly, the accounts were kept so wretchedly that even
with cooperative public officers, the auditing job was puzzling,
tedious, and frustrating. According to Ure M. Frazer, the
public savings made by auditing the township books were
chiefly psychological since the examiners could not do much
with the primitive, slipshod methods then being used by the
trustees. The county offices were not much better. The first
audits revealed, as Frazer phrased it, “crude thievery-or
atrocious arithmetic.”89 The auditor did not provide a check
on the treasurer, and the financial condition of the county
could be determined only after long, tiresome work. Very
frequently at first the treasurers would be found to be short.
The officers were not informed of their shortages by the
examiners; all shortages when revealed were reported to the
board, but this system was later changed.
Thirdly, many officers were neither cordial nor cooperative. Ever conciliatory, DeHority minimizes this friction
in the first public report of the department. “It is a pleasure
to state that, with a very few exceptions, this Department
has had the willing and hearty cooperation of all the public
officials of the State who are subject to its supervision.” On
the other hand, Frazer and Brennan both spoke of at least
covert hostility toward examiners. Examiners were denied
ordinary cordiality, assigned to dark, badly ventilated places
to work, and not given help in finding necessary records and
material, Frazer recalled that on one occasion he was expected
to work at a table placed beneath the stairs. After Brennan
protested against similar unreasonable treatment, he was
called “an arrogant little upstart.” As he remembered, field
examiners as a group were frequently referred to as “Tom
Marshall’s snoopers,” and were “as welcome as hornets.”
Brennan thought that DeHority’s instructions regarding
the conduct of the examiners toward the public officers could
have added to the ill will already engendered by the initiation
9aInterviews with Ure M. Fraser, of Indianapolis, January and
February, 1948. The author is indebted to Fraser for this information
on the learning scheme adopted by the department at the start. Fraser
was appointed to the department .on August 18, 1911, after passing
the second examination that was given.
99Interviews with Ure M. Fraser, January aqd February, 1948.
Indiana Magazine of History
154
of the auditing system. Examiners were directed to be very
reserved toward officers and were positively forbidden to
eat a meal with them or to accept a cigar from them. This code
of conduct was emphasized several times in letters from
headquarters to the field men. Brennan recalled that he was
called “on the carpet” by the state examiner for buying a
public officer a drink. But Brennan continued to be friendly
to public officers, to help them whenever he could, and to
buy them an occasional drink. He found that friendliness
could get cooperation and, therefore, make his work easier.
Other field examiners told him that they used the same tactics
when they thought it expedient to do so. DeHority’s rules
of conduct were never recalled, but became dead letters
through being widely observed in the breach.IoO
The fourth major difficulty in the field arose over the
standard forms established by the board. Basically this problem was occasioned by the forms not being entirely satisfactory. Quite evidently the forms devised for the various officers were designed by the state examiner and the deputies,
and headquarters seemed to believe these forms were, if not
admirable, at least adequate. The way the forms were weighed
is given in the First Report which states: The blank forms,
“prescribed by the State Board of Accounts, were first submitted for consideration and approval to a committee representing the commercial and business interests of the State, to
whom this department is greatly obligated for valuable suggestions and advice.”1o1 I t is regettable that DeHority’s policy
of conciliation of public officers was not applied in the matter
of the forms. Brennan recalled that the original forms
were “idealistic, impractical, and too expensive.” In addition,
they were complicated and took too much time to use. The
situation over the forms became so bad that the state examiner
finally called the field examiners together “to thresh out the
problem of the forms.”102
Aside from procedural problems, a shattering blow was
struck the agency in the first year when the act establishing
the board and the department was declared unconstitutional
by Judge Francis J. Vurpillat, of Starke County, and county
Interview with Edward Brennan, January, 1948.
Indiana, State Board of Accounts, Department of Inspection
and Supervision of Public Offices, First A n n u l Report, 1910, p. 6.
102 Interview with Edward Brennan, January, 1948.
100
101
The Indiana State Board of Accounts
155
auditors were enjoined from paying the auditing fees. What
the failure to receive any payment for his services meant to
a field examiner was related to the writer very graphically
by Frazer. He recalled that he completed the auditing of the
treasurer-auditor offices in four counties without receiving
a cent. Paying his own expenses in the field and maintaining
a home for his family for this period had more than exhausted
his personal reserves. I t had, he recalled, nearly exhausted
his credit also, and the prospect of receiving the money owed
him was badly ~ 1 0 u d e d . l ~ ~
The reasoning of Judge Vurpillat in declaring the Public
Accounting Law unconstitutional is significant because the
prejudices and arguments justifying his action foreshadow
the struggle that was to occur in the 1911 legislative session.
The decision was the outcome of a case in Starlre County
Circuit Court to enjoin County Auditor Lee M. Ransbottom
from paying six field examiners and was brought by Henry
R. Robbins, a lawyer and a taxpayer. The sum of $1,705.90
was owed to Christopher C. White, Otha C. Herdrich, Charles
H. Knapp, Alfred R. Hardesty, Leonard R. Schrader, and
William A. Hammond, field examiners. They entered a plea of
demurrer. This plea was overruled and the injunction against
paying auditing expenses was granted. In addition, Robbins
was to recover his costs for bringing the action from the
defendants.lo4
Robbins, handling his own case, argued that the Public
Accounting Law was unconstitutional since it deprived
citizens of money and property without due process of law.
He also maintained that the title of the act was misleading
and so violated the Indiana constitution because “every act
shall embrace but one subject and matters properly connected
therewith; which subject shall be expressed in the title.”10s
The charge was made that the act called for “public accounting” but provided for only secret and private inspection.
Judge Vurpillat did not recognize this second count, but he
was eloquent on the charge of deprivation of property without due process of law. Because it states so clearly the local
Interviews with Ure M. Fraser, January and February, 1948.
Ransbottm, Awlitar, v. State ex. rel. Robbins, 178 Ind. 80 (1912))
Number 22027.
101 Indiana, Constitution (1851), Art. 4, sec. 19.
10s
104
Indiana Magazine of History
156
official’s prejudice against state auditing of local government
accounts, Judge Vurpillat‘s decision is quoted at length :
While it is true as a general proposition of law that the
revenues of a County are subject to legislative control, and the
legislature may direct the expenditure of such revenues for
particular purposes, these revenues can not be seized arbitrarily
under guise of legislative enactment, without notice to the
County, without the right of the County government to supervise
its funds and conserve such funds in the interests of its taxpayers. . . And Certainly such funds can not thus be taken
without giving the taxpayer a day in court upon the question
whether or not the funds are properly taken pursuant to such
legislative enactment and, if so, whether o r not the correct
amount is taken for such purpose. [The Ohio caae upholding
the law here is distinguished.]
.
. . . . . . . . . . . . . .
Conceding that a n enactment may be constitutional that
provides for the arbitrary inspection of every public office in
every county and municipality, by State officials, without any
notice or request therefor and without any cause, or necessity
therefor; conceding that such law may provide for imposing
upon the already overburdened taxpayers the enormous expense
[sic]
and cost of such inspecting of all local offices-wherther
such offices are known to be honnestly [sic] and economically
administered by tried and trustworthy officials or not; can it
be said that when such inspections are so arbitrarily made and
enormous liabilities created against such county without regard
to its financial condition, can i t be possible that such law may
also provide that such foreign inspectors may audit their own
accounts and swoop down upon the county treasury and demand
the unconditional surrender of the taxpayers’ money in any sum
demanded, under the penalty provided by Sec. 10 of the
Act, for the Auditor and Treasurer who shall resist such a high
handed hold up that they shall be guilty of a misdemeanor, be
fined $1,000 and removed from office. Surely such a provision
cannot be sustained.
We know of no similar provision in all the law of the land
for depriving a tax payer of his money. Even where liabilities
are incurred against a county and such liabilities are determined by the proper officers of the county the tax payer is
given the right of appeal from the action of his own officers.
No judgment of a court of justice can be realized upon even after
a day in court has been accorded the debtor, until execution is
properly served upon him. But what day in court has the
tax payer here. His local government is shorn of its powers and
cannot pass upon the validity or correctness of the foreigh [sic]
inspectors claims. No provision is made for the levy of any
tax for the purpose of this act. No notice whatever is given
The Indiana State Board of Accounts
167
that money for the purpose of this Act will be taken or
required. No appropriation is required to warrant the payment of these demands. The tax payers liability is fixed without
notice and without his knowledge or consent, without any
right to determine its validity or amount, and without any
right or opportunity to resent a wrong and injustice by appeal.
There is absolutely no process of law afforded the citizen
tax payer, unless, indeed it be said that the enactment furnishes
due process of law. But this can not be. Many high courts of
the land have held that an act of the legislature is not necessarily
the law of the land and that a legislature cannot make anything
due process of law which by its own legislation it declares
to be such. And the courts have also held that if an act be
found to be arbitrary and unjust and oppressive, it may be
declared to be not due process of law.
The law in question so f a r as i t provides for taking the
funds of the county arbitrarily and without notice to the county
or the taxpayer and without providing them a day in court
to determine the validity of the claim against them and the
amount thereof denies that due process of law which the
constitution guarrantees [sic].
A law is fundamentally right reason and justice. The
provision of the Public Accounting Law for taking the tax
payers money is without reason or justice and is therefore
not law although so called, and such provision is also unconstitutional as denying the citizem and taxpayers due process
of law in thus taking their money.106
The legal reasoning of the case need not be considered
too closely. What seems significant is the fierce parochialism
implicit in the decision. This attitude reveals itself in several
ways. First, Judge Vurpillat implies that local officials are
above any possible suspicion when he criticizes inspection
of local offices “whether such offices are known to be economically and honestly administered by tried and trustworthy
officials.” Examination of the accounts of such officials
would in itself be an unnecessary affront to the judge, but
that such an inspection is performed by “foreign inspectors”
who swoop down “and demand the unconditional surrender
of the taxpayers’ money” is simply too much. In addition,
the accounts of the state inspectors were not audited. This
last thrust found a mark, and action would come of it.
At the end of 1910 the prospects for the Public Acounting
Law were not bright. There was considerable hostility from
the public officers despite the DeHority policy of conciliation and the cautious forbearance toward public officers
106
Ransbottm v. State.
158
Indiana Magazine of History
directed by Governor Marshall. The uniform system of accounting was going slowly because of the officials’ hostility
and because of the imperfections of the forms adopted by
the board. Payment of the field examiners was delayed in
many cases and had become uncertain.
Though the Republicans made no mention of the new
law in their platform for 1910, the Democrats included a
paragraph :
We believe that the public accounting law, nonpartisan
in inception and bipartisan in enactment and administration,
has accomplished and will continue to accomplish great good
for both taxpayers and public officials of Indiana; and we
pledge the Democratic party to its maintenance and its improvement whenever improvement may be shown by experience
to be necessary or beneficial.107
There is no evidence, however, that the law became an issue
of any significance in the campaign.
The Sixty-seventh General Assembly, which convened
January 5, 1911, was a more stable body than its predecessor.
In the Senate the Democrats had a thirty to twenty majority;
in the House they led sixty-one to thirty-nine. Governor
Marshall in his message to the Democratic assembly defended
the State Board of Accounts and the work of the Department
of Inspection and Supervision of Public Offices. He said:
The Public Accounting Law has given almost universal
satisfaction to the people and should not be tampered with in
any particular except one. The law now provides that the
moneys found due the State and the different municipalities
shall be collected by the Attorney General. This burden is too
great for his office.108
Governor Marshall declared that the local prosecutors should
assume this duty. He further stated that, since yearly examinations were provided, county councils and township
advisory boards should be discontinued and their duties assumed by the commissioners and trustees.
The governor’s wishes, however, were not regarded. Two
bills were introduced in the House affecting the examination
of public offices. One of these, House Bill Number 29, which
was introduced by Representative L. B. Clore, was never
107 Indiana, Republican State Committee, Political Had-book of
Indiana f o r the Campaign of 1910, 182-183.
108 Indiana, Journal of the House of Repreaentatives, 1911, pp. 32-38.
The Indiana State Board of Accounts
159
reported out of the Judiciary Committee. House Bill Number
28, however, was a measure that would have weakened the
agency severely. It was introduced by Representative S. B.
Wells, of Jennings and Scott counties, who vigorously attacked the new agency.'OQ
This measure would have eliminated the office of state
examiner and created instead a three-man board, each member having equal powers and drawing the same salary
($3,000). The staff of field examiners would have been cut
to a maximum of twenty members. There would have been
no examinations of public accounts until a uniform system of
accounting was installed. If a shortage were discovered in
an office, this fact was to be given to the public officer
concerned and the shortage not reported for ten days. The
officer whose account was short could file a protest with the
board; then the board would have to wait another ten days
before publicizing the shortage. The state examiners were
personally to go over the accounts with the officer. They
would have the power to make corrections and settlement
before any release of the report to the press. Any violation
of these provisions by an examiner would bring a $500 fine
and/or six months in jail. The state examiners would report
any malfeasance, misfeasance, or nonfeasance of public officers to the prosecuting attorney in whose jurisdiction the
violation occurred. The attorney was to begin prosecution, for
which his fee would be 5 per cent of the amount he recovered.l1°
House Bill Number 28 was reported favorably from
committee and made a special order of business, but on the
second reading a move to indefinitely postpone i t carried by
fifty-four votes. It was approved again in committee on
March 4, but it failed to reach the House floor.111
The action which ultimately amended the 1909 act originated in the Senate and was introduced by Senator William A.
Yarling on January 13, 1911. The provisions of Senator
Yarling's bill (S. B. 109) are unknown, for the committee
saved only its enacting clause. The committee (Judiciary A)
bill had fourteen sections, all dealing with the procedure for
I b i d , Appendix, 392.
Indianapolis News, January 10, 1911.
111 Indiana, Journal of the Howre o f Representatives, 1911,
pendix, 392.
109
110
Ap
Indiana Magazine
160
of
History
collecting shortages. In the House only the enacting clause
once again was saved. The Judiciary Committee wrote a new
measure that contained many of Representative Wells’ ideas
concerning public accounting. The state examiner’s salary
was to be reduced to $3,500 a year, and he was to have no
greater authority than either of his deputies. The State Board
of Accounts was to be increased by the addition of the two
deputy examiners. The field examiners’ pay was to be reduced
to eight dollars a working day. The remainder of the bill
dealt with prosecution of public officers and the fees that
were to go to the prosecuting attorneys.
The Judiciary Committee’s measure would have badly
crippled the department in organization and personnel. The
reduction of the state examiner’s authority and responsibility
to that of just a member of a three-man board would
certainly have weakened the administrative direction of the
work. Cutting down the field force to no more than twenty
would have made it impossible for the department to carry
out the responsibility placed on it by the Public Accounting
Law. Furthermore, the morale of the remaining field men
would have been lowered considerably if such a provision
had been enacted.
This attack on the original Public Accounting Law of
1909 was the work of the Judiciary Committee, composed
of Democratic Representatives Edwin Corr, George D. Sunkel,
James B. Merriman, William W. Spencer, Charles E. Smith,
Adam E. Wise, and Cassius W. McMullen ; and Republican
Representatives Russell K. Bedgood, Jacob S. White, Calvin
Faris, and William E. Wider. “The new bill, which was
drafted by Representatives Wise and Merriman, was agreed
on by the Democratic members of the committee and later
taken up by the entire committee.”112 Such changes as the
committee made were of course against Governor Marshall’s
wishes as expressed in his message. Marshall, who played
such a leading part in the passage of the original bill, was
to defend i t staunchly in this session. Representative Wise
joined Wells in a fight to weaken the State Board of Accounts,
a fight that dragged on until nearly the close of the session.
Governor Marshall’s early attempts to bring the Democrats
into line were fruitless, according to the N e w s which said:
=*Zbid.,
Appendix, 3; Indianapolis News, February 17, 1911.
The Indiana State Board of Accounts
161
I n the house the bipartisan tendency displayed itself in
consideration of the bill designed to affect the uniform public
accounting law. . .
A number of the leaders had hoped that following the appearance of the Governor in the joint Democratic caucus on
Monday evening that the members who were being made the
catspaws for the Republican minorities, and more especially in
the house, would right about face about redeeming party
. [but] Representative Wells and a coterie of the
pledges.
majority went over to the Republicans on the accounting law
fight and almost deprived the measure of all its real value.11s
.
..
On February 24 Representative Merriman offered
amendments to the amended Senate Bill 109 that changed
the bill radically. The provision lowering the state examiner
to equality with the two deputies and that enlarging the
board to include the deputies were stricken out. Except
for reducing the pay of field examiners and granting the
prosecuting attorneys power to prosecute local officials whose
violations had been uncovered by the department, the original
bill as drafted in 1909 remained.
Representative Merriman, after offering his amendments,
found himself in the same sort of embarrassing position that
Senator Bland had been in two years earlier. He was obliged
to repudiate measures he had earlier sponsored. His rapid
shift was pointed out to him on the floor. Representative
Faris said:
“That report [of the Judiciary Committee] was satisfactory
even to the gentleman who now proposes these amendments.
The accounting law as it now stands puts in the hands of a
political boss a deadly weapon.
“It was the attempt of the committee to make the accounting board as nearly nonpartisan as possible. It is
dangerous to any party, to the party in power as well as to
the party out of power. It is dangerous to the members of the
Democratic party who do not happen to be in accord with the
accounting board. There is no reason why the chief examiner
should be made a czar. These amendments offered by the
gentleman from Wells would put the board right back where
i t is today. I believe the field examiners ought to be under
the instructions of the board, and not under the orders of one
man.”114
...
Representative Faris’ argument could very well have
been prompted by political considerations, as he states. The
113
Indianapolis News, February 18, 1911.
February 25, 1911.
11*Zbid.,
Indiana Magazine of Histom
162
Democratic tide was running strong in 1911, and he may
have feared that the state examiner would use the department
to harass Republican officeholders, though i t is difficult to
see how honest, efficient public officials could be embarrassed
by the operations of the field staff directed by the state examiner. But the attack on the organization of the board and
department and their policy could well have been an attempt
to destroy or weaken a function that i t was not expedient
to attack frontally.
In defending the Merriman amendments, Representative
Corr met the two major objections made by the attackers.
The charge that the field examiners’ pay was too high did
not apply, he pointed out, for the Merriman amendments
did not change the two dollar daily reduction made by the
Judiciary Committee’s amendment. Neither could the other
charge, that public officers were embarrassed by the publication of reports be attributed to the Merriman amendments,
since the amendments provided for notice, a hearing, and a
settlement, all without publicity. Merriman himself upheld
the power granted to the state examiner. “We say the power
ought to center in the hands of the Chief Examiner.”115
The Merriman amendments were finally adopted by a
fifty-two to forty-two vote.l18 The affirmative votes were
all Democratic ; thirty-seven Republican votes were negative.
Five Democrats voted with the Republicans and four Democrats did not vote. The third reading and vote came on
February 28. The March 1 issue of the News credited the
Merriman amendments to Marshall and DeHority, for i t
noted: “The House yesterday afternoon voted by a vote of
62 to 32 to save the uniform accounting law in its present
form with the exception of such amendments as in the
opinion of the Governor and the chief Examiners ought to
be made to it.” Fifty-six Democrats were joined by six
Republicans in favor of the bill; and thirty Republicans and
two Democrats opposed. The Senate quickly concurred in the
House amendments, and the bill was signed by the governor,
March 4.
Representative Faris, however, had objected to Governor
Marshall’s pressure on the Democratic members of the legislature. He recounted that Mark Thistlewaite, the governor’s
Ibid.
lleIndiana, Journal of the House of Representatives, 1911, p. 1488.
116
The Indiana State Board of Accounts
163
secretary, had stood beside the Speaker when the vote was
taken on the second reading. Faris charged that Republican
legislators had been intimidated by a threat to examine the
accounts of Republican state officeholders. According to the
News, “Faris made a bitter attack on the state board of accounts and the methods which he alleged the chief examiner
and the attaches of the department had used in forcing the
bill through.” In explaining his vote which was one of two
Democratic votes cast against the bill, Wells said “that a vote
for the bill would be an acknowledgement that Governor
Thomas R. Marshall and the Democratic majority in the
house were owned body and soul by William A. DeHority,
the chief examiner. . .”l17
The amendments for the prosecution of public officers
whose violations had been brought to light by the field men
did not influence agency policy or operation significantly.
The provision for maintaining secrecy of shortages if a settlement could be made improved the relationship between the
board and the department and the public officers.
The board and the department had weathered a strong
legislative attack. DeHority and Governor Marshall had
proved themselves capable defenders of the new agency. Miss
Nelle Mullenix, an early office employee of the board, remembered that she had been instructed by DeHority to enroll the
bill so that there would be no last minute slip-up that might endanger the agency.”* The attack on the bill probably had
been motivated by the kind of parochialism that Judge
Vurpillat represented, and the county officers and trustees
probably exerted some pressure, though the Indianapolis
News says nothing of this. Somewhat strangely, there is no
indication of intervention in the defense of the Public Accounting Law by Noel, Bobbs, or any of the other originators
of the 1909 law.
The first report of the Department of Inspection and
Supervision of Public Offices made to the State Board of
Accounts shows only limited success of departmental operatiom. First, the existing records in some public offices were
in “such condition as to render a clear and satisfactory report
impossible until a thorough investigation [had] been made by
the department examiners in the course of the regular exami-
.
117
11s
Indianapolis News, March 1, 1911.
Interview with Nelle Mullenix, March, 1948.
164
Indiana Magazine of History
nations.”11Q The original examinations consisted largely of
helping the public officer install the new uniform system and
in getting the accounts in shape. As noted earlier, decreases
in public purchasing effected in 1910 were achieved largely
through psychological means. Nonetheless, savings were
actual, no matter what caused them. The State Board of Accounts and the Department of Education had prepared a list
of standard school supplies for the township trustees. The
prices paid for supplies in 1910 were substantially lower than
in 1909, as the following list indicates:
Article
Maps, single
Maps, (8 in case)
[One Vigo trustee had
once paid $100 for this
type of map.]
Globes, 8 inch
Globes, 12 inch
1909
1910
$ 2.00
$ 1.00
20.00
12.50
6.00
9.00
2.50-4.75
4.50-7.50
During the year 1910, 1711 examinations were made as
follows: state offices, 7; county, 214; townships (civil and
school), 1342 ; cities and towns, 97; school cities and towns,
51.’20 A uniform system of accounting was installed in the
offices of the trustees of the 1,017 existing townships. I n
some county offices a uniform system had already been installed. Mr. DeHority reported further that the department
had been “a bureau of information to which officers from
all parts of the state have presented inquiries on matters affecting their duties.” He reported : “This practice, while
entailing much work and imposing an unusual degree of responsibility, has been encouraged in the belief that the desired
uniformity in the management of public offices would thereby
be more speedily reached.”121
The report to the 1911 legislature shows that the department was paying for itself, although DeHority had been too
optimistic about recoveries. The 1,711 examinations were
made at a cost of $145,552 to the units examined. Total
charges made against officers and former officers for
shortages discovered was $741,735. Of this sum $50,976 had
118 Indiana, State Board of Accounts, De artment of Inspection and
Supervision of Public Offices, Ftrst Annual &port, 1910, p. 5.
120 Zbid., 8.
121Zbid., 11.
The Indiana State Board of Accounts
165
already been recovered. The direct shortage, i.e., money retained illegally in which the governmental unit suffered a
loss, was $439,868. The constructive shortage, i.e., violative
of the law but in which the governmental unit suffered no
loss, was $301,867. The total maintenance cost of the central
office of the State Board of Accounts, including furnishings
and salaries, was $27,394.122
Before 1911 had closed, one more situation had to be
resolved-it was necessary to secure a reversal of the decision
of the Starke County Circuit Court declaring the State Board
of Accounts unconstitutional. On December 8, 1911, the attorney general petitioned the Indiana Supreme Court for an
advancement of the Ransbottom case, stating that
an early decision of this appeal is of great public concern
because of the fact that a large number of cases are pending
in the State in which the validity of the act is necessarily inand a number of county auditors, at least five,
volved .
refuse to comply with the provisions of the act because of the
decision of the circuit court aforesaid.12s
..
In the May term, 1912, the state supreme court reversed
the Starke County Circuit Court decision. Chief Justice
Douglas Morris said “that the statute violates either the
Constitution of Indiana or that of the United States, because
it denies ‘due process of law’, can find no support either in
reason or authority.” A number of citations follow. The
judge also declared the title of the act not misleading and
therefore constitutional. The court further ruled that Robbins
had brought action improperly. Judgment was reversed with
instructions to the court below to sustain the appellants’
demurrer.
Though the department‘s greatest single problem was
now removed, DeHority was plagued with personnel problems.
The validity of the examining and selecting process was never
publicly questioned, but quite evidently a great many improper
selections had been made. Many of these men quit; others
were separated from the service. To complicate the problem,
private employers threatened to discharge employees who
took the examinations of the department.
Moreover, the first extra assignment given to the State
Board of Accounts by the general assembly imposed a stiff
122
123
Indianapolis News, January 11, 1911.
Rambottom v. State.
Indiana Magazine o f History
166
burden on the struggling agency, which had not yet met the
obligations of the original law. The board was directed to
gather and compile facts and data from the following officials: the clerk of the circuit court, the county auditor, the
county recorder, the county treasurer, the county sheriff,
the county assessor, the county surveyor, the county coroner,
the county commissioners, the township trustee, the township
assessor, and the prosecuting attorney. The legislature had
pending before it bills for the increase of salaries of county
and township officials and felt it could make realistic salary
revisions “by having the necessary facts and data concerning
the respective offices.”12* Collecting these facts and data
entailed a great deal of work, as DeHority indicated in his
speech to the county commissioners a t Richmond :
Acting in accordance with the above resolution the Department drafted circulars, setting out the information specified
together with additional questions relative to the work performed in the respective offices and mailed the same to three
thousand ninety-eight officials affected thereby. When you
realize that an average of thirty questions were asked of each
official as enumerated, thereby involving on the part of the
Department the consideration of more than eighty thousand
separate and distinct items upon the return of the complete
reports, also the great number of letters made necessary to
dictate in the matter of correction, verification and additional
information in connection with the reports, you will comprehend
in a small degree the vast amount of work necessary in order
to properly present this report t o the next General Assembly.125
In addition to personnel problems and the burden of
extra duty imposed by the legislature, the board faced complicated problems in initiating and executing its routine
duties. For example, an examination in a northeastern county
revealed a $4,400 shortage in the accounts of a trustee.
Though a Republican, the trustee went to Indianapolis to see
Governor Marshall. The trustee acknowledged that the record
showing the shortage was right, but he swore that “he had
not taken a nickel.” Believing the man’s story, the governor
got in touch with DeHority and told him to send two examiners to the trustee’s home. Marshall said he wanted to
help the man justify himself before his friends and
neighbors-if he were honest.126
Indiana, Laws (1911), Chap. 296, p. 701.
DeHority, Three Years of Eiqwrknce with the Public Accounting
Law, 30.
$26 Interview with Edward Brennan, January, 1948.
124
12s
The Indiana State Board of Accounts
167
Edward Brennan and his partner were assigned this
job. The records in the auditor’s office showed the shortage.
The two field men went to the trustee’s home, where the
trustee was of no help beyond proclaiming his honesty. He
had kept no record whatever of income or disbursements.
After some fruitless questions, Brennan discovered that the
trustee had kept his canceled checks or check stubs. Starting
with the time the trustee began his term in office, the field
examiners called on him to identify every person to whom
he had written checks for public money and to justify the
expenditure. The trustee’s daughter was pressed into service
and arranged the checks and stubs in chronological order.
One check for twenty-five dollars made out a year or two
before puzzled the trustee for a while, but his daughter
remembered the woman who had received the check had been
a local teacher. The trustee then recalled that this teacher
had asked him for an advance on her salary to meet some
pressing personal need. Other checks brought momentary
blanks, but the trustee eventually remembered the reasons
for the expenditures. The canceled checks and stubs accounted completely for the shortage. Brennan and his partner
helped the trustee set up an accounting system. And when
DeHority reported the vindication of the trustee’s honesty
to the governor, Marshall was very gratified.
Facing such problems as that just described, the field
men under DeHority naturally had to take what now would
be considered an inordinate time to complete examinations.
The extreme division of labor which was necessary in the
beginning for the field examiners to learn their jobs further
slowed down the rate of progress.127
Statistically, the record of the department under DeHority
was not impressive. The first state examiner reported always
what the department had done, but the reports of the second
state examiner show what was left undone. Gilbert H.
Hendren, appointee of Governor Samuel M. Ralston, issued
a report on the first year of the department under his direction. Whatever Mr. Hendren’s intentions were, the figures
tend to make DeHority’s administration appear remiss in
its duties if the particular difficulties faced by both the
original headquarters and field staff in the application of
127Inter~iewswith Ure M. Fraser, January and February, 1948.
168
Indiana Magazine of Histow
the provisions of the Public Accounting Law are not taken
into consideration. Hendren reported :
When I assumed charge of this department, June 7, 1913,
the records showed
that of the 6,522 public offices and
institutions in Indiana, under the supervision of the State
Board of Accounts, 2,275 offices and institutions had been examined one or more times during the preceding four years,
leaving 4,247 offices and institutions that had never been
examined. This number included the officials of a large number
of small incorporated tuwns, justices of the peace, municipal
light and water plants, city park boards, Barrett law improvements, and several of the large state institutions.128
...
Though the Hendren report makes clear that under DeHority
the State Board of Accounts had not been able to make examinations of all the public offices, still a sound foundation
had been built. When Hendren assumed leadership of the
agency, i t had an experienced staff that had faced considerable hostility from the local officers and had largely overcome it. The agency had survived a bitter legislative battle
in 1911, and in the next year the Indiana Supreme Court
had upheld the constitutionality of the statute creating it.
Many problems remained, but under DeHority the Board of
Accounts had successfully become a going concern.
128 Indiana, State Board of Accounts, Department of Inspection and
Supervision of Public Offices, Special Repmt, 1913-1914,p. 7.