Saturday, June 20, 2009

Stevenson Archer: defaulted defalcation

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Along with a plea of guilty to embezzlement, Stevenson Archer submitted a written statement to the court in 1890 that sought to put the crime in context. Though the note may have given some reassurance as to the moral character of Maryland's treasurer, it might also have dashed any hopes that the state would recover the funds. "No part of the State's money or securities was ever used by me in gambling, stock speculation, or for political purposes;" Archer wrote, "nor have I at this time one dollar left."

Born near Churchville, Maryland in 1827, Archer was the third generation member of a well-known political family. Both his grandfather, John Archer, and his father, Stevenson Archer Sr., served in the state legislature and in the House of Representatives. John Archer fought in the Revolutionary War, and Stevenson Archer Sr. was also a judge in the state's supreme court and court of appeals.

Archer attended the Bel Air Academy and, following in his father's footsteps, attended Princeton University. He graduated in 1848, the same year his father died, and was admitted to the bar in 1850. Continuing in the well-worn path his family had set, Archer was elected as a Democrat to the state's house of delegates in 1854 and, in 1866, to the House of Representatives. He won another three elections to retain that seat, but failed to earn his party's nomination in 1874. A review of Princeton alumni reported that Archer was also a special judge in Cecil County in 1867.

After leaving the House, Archer returned to legal work in Bel Air, Maryland, but later became chairman of the state Democratic Party. He returned to public office in 1886, when he was elected treasurer of Maryland. He was re-elected in 1888, and by that time oversight of his position was becoming more lax. State law held that Archer was to have taken an oath and given a bond after each election. He did so after his first election, but not after the 1888 election. It wasn't until 1889 that he gave a $200,000 bond.

In March of 1890, Democratic Governor Elihu Jackson surprised the state legislature with an announcement: the state auditor, Jackson said, had determined that Archer had misapplied public securities. An investigative committee was formed and found that $127,000 of $572,000 in funds that were supposed to have been deposited by Archer in Baltimore banks were missing. The committee later finalized the stolen amount at $132,401.25.

The main transaction in question was Archer's purchase of railroad bonds for the state in 1889 amounting to a $473,000 sinking fund with a $20,000 premium. The committee found that out of the 140 bonds in this sale, Archer had kept 33 for personal use, with four more unaccounted for that may have also been kept by the treasurer. The exact use that Archer put the funds to is unclear, though it was determined that he had not used the money for political purposes, as had been suspected at first. The New York Times reported that it was thought that he may have been using the money to pay deficiencies on trust estates and hoping to make up for the theft with speculations, which failed. Elihu S. Riley says in A History of the General Assembly of Maryland that legislators felt Archer fell victim to temptations to use state money to pay off a private debt of about $100,000.

The incident brought criticism to Governor Jackson for his failure to oversee the oaths and bonds of the treasurer's office. The legislature was accused of being too lenient in their investigation and letting important witnesses off too easily. The New York Times said Archer was not likely to get a prison sentence in the matter, since "the law is so vaguely drawn that he can escape through loopholes." Though the comment held some truth, it later turned out to be a very poor estimate.

Archer, for his part, continued to enjoy strong support despite the incident. Prior to the revelation of the theft, state comptroller L. Victor Baughman was resolute in his belief that the scandal should be made public, but said he would offer to put $25,000 toward the defalcation; Democrat Thomas M. Lanahan said he would be willing to give $10,000. Though an auction was held to sell off Archer's personal property, neighbors bought up the items and refused to take them away. "His humiliation was a State sorrow," writes Riley. "His gentleness, his courtesy, his everpresent kindheartedness had made him invulnerable to enmity; foes he had none, friends were legion."

It wasn't an easy time for Archer, however. He tried unsuccessfully to commit suicide, and also offered his resignation to Jackson, who refused to accept it. In April of 1890, Archer was charged with embezzlement and his arrest ordered. When he did not show up in court, instead sending a letter saying his physical condition prevented his appearance, he was removed from office and replaced by Edwin H. Brown, a lawyer and brother of a state senator. Archer also vacated his chairmanship of the state Democratic Party.

It seems that the Times was accurate in saying that Archer would try to escape through loopholes, as his lawyers argued that the statute on embezzlement did not cover misappropriation by the treasurer. There was also the question of whether his first bond could pay off the money stolen in his second term, or if the later bond could be used if the theft occurred before it was given. In July, the state's supreme court ruled that the statute was broad enough to try Archer on the charge. Instead, he opted to plead guilty and was sentenced to five years in prison.

The embezzlement proved a heavy blow for the state, as it didn't get much of the money back. In December of 1890, the court ordered Archer's bondsmen liable to reimburse the state for the stolen money. After a legal battle, during which it was argued that paying the full amount would ruin the bondsmen, they were ordered to pay $60,000. However, also citing the possible ruination of the bondsmen, the legislature passed a bill in March of 1892 that had the state pick up $37,000 of that amount. The legislature also passed a bill not long after the theft became known that drastically increased protections of the state funds and securities. The treasurer was no longer allowed to visit the vaults alone, but had to be accompanied by the comptroller. Each was to have a key, and both would be needed to access the vaults; in addition, they were both to record in separate public records the amount of the securities in the vaults.

In 1892, an effort to secure a pardon for Archer due to his failing health was underway. After being given what the New York Times called "one of the strongest [petitions] ever presented to the Executive" 1894, Democratic Governor Frank Brown pardoned Archer. The action shaved a year off the former treasurer's sentence, but Archer's poor health continued for the next several years. In 1898, he died after a year of confinement in a Baltimore hospital.

Sources: The Political Graveyard, The Biographical Directory of the United States Congress, "State Treasurer Archer Removed" in the New York Times on April 16 1890, "Treasurer Archer's Crime" in the New York Times on Jun. 6 1890, "The Sureties Responsible" in the New York Times on Dec. 30 1890, "Stevenson Archer's Bondsmen" in the New York Times on Mar. 23 1892, "A Bold Lobby Defeated" in the New York Times on Apr. 4 1892, "Seeking Archer's Pardon" in the New York Times on Dec. 16 1892, "Treasurer Archer Pardoned" in the New York Times on May 10 1894, "Stevenson Archer Dead" in the New York Times on Aug. 3 1898, Appletons' Annual Cyclopaedia and Register of Important Events of the Year 1890, A History of the General Assembly of Maryland 1625-1904 by Elihu S. Riley, General Catalogue of Princeton University 1746-1906, Reports of Cases Argued and Determined in the Court of Appeals of Maryland by J. Shaaff Stockett

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