John Haywood - Financial Discrepancies

Financial Discrepancies

In 1820 "Treasurer John," one of the most popular men in the state, had been accused of "abusing his trust." The legislature promptly exonerated him following an inquiry, but an examination of the records after his death in 1827 disclosed that public funds in excess of $68,000 were, in fact, unaccounted for. That was a massive shortfall in those days – more than half the state's entire budget for the year. Haywood's heirs reimbursed the state nearly $48,000 for the missing money, but examiners shortly afterward discovered an additional shortage of almost $22,000 in Cherokee bonds, revenue from the sale of public lands in western North Carolina.

The historian William K. Boyd commented that the accounting of public funds in those days was deficient in three respects: "First, the comptroller did not have oversight of the actual money in the treasury; the auditing by the comptroller did not include all state funds; and the method of bonding the treasurer was not adequate." In 1784 a law had been enacted requiring the Treasurer to post a bond in the amount of "one hundred thousand pounds," but an 1801 statute reduced the amount of the required bond to a sum equal to the balance of existing treasury funds, plus estimated annual revenue for the following year. It stipulated moreover that no penalty would be imposed for failure to comply with the requirement.

Although banks were operating in Raleigh and throughout North Carolina, Haywood preferred to keep the state's money in a "Public Chest" in his office, dipping into it as necessary to pay governmental and perhaps personal expenses. Since he had posted no bond from 1826 to 1827, when the shortfall was discovered in his accounts, state officials had no practical means of recovering the missing money.

They took Haywood's estate to court, but to no avail. The court held that the executor had properly dispersed all but slightly more than $7,000 of Haywood's assets. This meager sum was duly awarded to the state, minus a small amount for his widow's dower rights.