Brief History of SD - 1895

	This information appears in Chapter LXVII of "History of South 
	Dakota" by Doane Robinson, Vol. I (1904), pages 355-357 and was 
	scanned, OCRed and edited by Joy Fisher, http://www.rootsweb.com/~archreg/vols/00001.html#0000031

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CHAPTER LXVII 

THE TAYLOR DEFALCATION. 

	The troubles of South Dakota were not yet over.  William Walter Taylor, 
state treasurer, was a man who had from his first residence in the state secured 
and held the absolute confidence of all of the people.  He came to Redfield and 
engaged in the banking business in the early 'eighties.  His father was a 
wealthy banker at LaFayette, Indiana. All of his personal and business relations 
were of the highest character. He exhibited sound and conservative judgment in 
all matters of business, was public spirited and popular.  He was first 
nominated for state treasurer at the Mitchell convention of the Republicans in 
1890, elected that fall and renominated at Madison in 1892 and re-elected.  In 
the fall of 1894 his successor Kirk G Phillips, was elected and upon the second 
Tuesday of January, 1895, Taylor was to surrender the office and account for the 
funds.  It was known that he had suffered some losses from the bank failures 
during the panic, but that he had ample funds to meet every demand upon him 
never was suggested to any mind, except to a few of his bondsmen, to whom he had 
communicated the fact that he was short and they were making up the amount to 
enable him to settle. The shock then which came to the people on the 8th of 
January, 1895, when it was announced that Taylor was three hundred and sixty-
seven thousand dollars in default, and that he was a fugitive from justice, can 
scarcely be realized.  The legislature was just assembling and Governor Sheldon, 
voicing the universal appreciation of Taylor, had included a paragraph in his 
message paying him the highest praise for the masterly manner in which he had 
administered the treasury during the years of adversity.

	Examination of the situation revealed the fact that Taylor had, through 
bank failures, met with legitimate losses aggregating about one hundred and 
forty-five thousand dollars. In the previous November he had apprised Governor 
Mellette and John T. McChesney of the situation and they, together with Taylor, 
were engaged in making every effort to secure this sum of money to enable him to 
settle honestly.  The entire amount of cash required was being provided and as 
the sequel showed was actually provided by Taylor's father, McChesney and 
Mellette. While engaged in securing this money Taylor fell in with the law firm 
of Tenney & Wells, of Chicago, and upon learning the situation advised Taylor 
that a compromise could be readily arranged with the state by which the money 
available would settle demands and relieve both himself and his bondsmen. 
Without consulting with any of his friends, Taylor placed himself in their 
hands. They had him withdraw all of the state money and place it in their hands 
and to make to a member of their firm deeds of all the property he possessed and 
then to drop out of sight while they arranged the compromise, for they argued, 
with the state treasury absolutely empty, the state would be compelled to make 
terms and accept what it could get. Taylor disappeared on the 2d of January, 
though his defalcation and elopement was not known until the 8th.  The Chicago 
lawyers had quite misapprehended the temper and character of the people of South 
Dakota.  While they would have probably been very willing to have forgiven 
Taylor for honest losses, they were a unit in the declaration that no stress of 
circumstances would induce them to compromise with a criminal. A legislative 
investigation was at once instituted, which brought out all of the facts 
surrounding the case.  The banks of Deadwood advanced seventy-five thousand 
dollars to bridge the emergency and the legislature promptly authorized the 
issuance of funding warrants to raise revenue, the legality of such action being 
determined by an ex-parte decision of the supreme court.  A large reward was 
offered for the apprehension of Taylor and attorney general Crawford moved with 
great euergy to secure possession of the property which Taylor had deeded away 
at the time of his departure.  Every suggestion of compromise was scouted and 
action was begun against the bondsmen to recover the amount of the money lost. 

	Taylor had escaped to South America and for several months moved about in 
the effort to avoid detection, but fearing that compromise was not to be 
considered came back and delivered himself up to justice.  In the escapade he 
had frittered away in attorneys' fees, personal expenses and in other ways not 
revealed, an additional hundred thousand dollars, so that he had only one 
hundred thousand remaining to pay into the treasury.  This he did and also made 
over to the state all of his property.  He was convicted of embezzlement and 
sentenced to twenty years in the penitentiary, but owing to a defect in the 
statute under which he was sentenced, the supreme court reduced the sentence to 
two years, which time he served and has not since resided in the state.  Nothing 
in the annals of crime is more inexcusable than the flight of Taylor.  He had no 
criminal instincts.  He was in a position to settle with the state in full, 
retain his financial credit and his good name, and but for the bad advice to 
which he listened might today have been a self respecting and honorable citizen.

	The legislative session of 1895, which opened with the news of Taylor's 
default, was largely occupied with straightening out the snarl in which the 
state finances had been involved. Among the moneys taken by Taylor were about 
one hundred thousand of school money, for which the legislature issued bonds to 
supply the loss, thus keeping the school fund intact.

	A determined attempt was made to amend the divorce law, which was bringing 
scandal upon the state, but it failed.  The school for the blind was located at 
Gary by this session, and the school for feeble minded at Redfield.

	The legislature was very largely Republican and Senator Richard F. 
Pettigrew was reelected by the unanimous Republican vote.

	The prohibition clause of the constitution was resubmitted almost without 
opposition at the very beginning of the Session.

	By this time the rotary cream separator had been perfected and a great 
agitation for dairying resulted in the building of very many separator 
creameries, which in turn contributed very largely to the prosperity of the 
state.

	The mailed hand of the financial depression still lay heavy upon the 
people and there was absolutely no general progress except in creamery building. 
A census taken June 1st showed but three hundred and thirty thousand 
inhabitants, an increase of but fifteen hundred in five years. 

	The crops of this year were excellent, but the price, beaten down by the 
panic, was so small that very little cash could be realized from it. Few new 
debts, however, were made and the people were more hopeful than a year earlier.

	On May 25th Governor Arthur C. Mellette died from Fright's disease of 
several years' standing.  He was one of the noblest and ablest men who had been 
called into public life in South Dakota. All of his effort was devoted to the 
up-building of the commonwealth.  As the first executive he had given great 
labor to the establishment of the practices of the executive office upon lines 
which would be followed as safe precedents. He was the principle bondsman for W. 
W. Taylor, and when the default was known he promptly paid over to the state all 
of his property.  He was the soul of honor, generous and self sacrificing, a 
profound scholar, whose attainments covered a broad field of study and 
reflection. He held some bold opinions in relation to electrical and magnetic 
science, and believed it possible to harness the earth's magnetic currents and 
make them the servants of men for motive power of the first magnitude.  He was a 
native of Indiana and was fifty-two years of age at his death. At his request he 
was buried at Watertown, his ashes being those of the first of Dakota's 
governors to be committed to the soil of the state.