■11 CONGRESS AND PHELPS, DODGE & CO. AN IXTIIAOEDINAB! HISTOEY; OR, AN ABSTRACT OF SO MUCH OF THE PROCEEDINGS AND INVESTIGATIONS OP THE 43d congress (1st SESSION), IN RELATION TO “ MOIETIES AND CUSTOMS REVENUE LAWS,” AS PERTAIN TO AND FURTHER ILLUSTRATE THE CONTROVERSY BETWEEN THE UNITED STATES GOVERNMENT AND THE FIRM OF PHELPS, DODGE & CO. “ Who ever knew truth put to the worst in a free and open encounter /"'—Milton. “ Let us consider the reason of the case; for nothing is law that is not reason."—Stu -John Powell. 1875 . INDEX. Page. Affidavits, rebutting, of Boyd and Farnutn. II. IS Algeria, invoice G, March, 1872. 53, 54 Antwerp, city of. Invoice G., Oct, 1871. 48 Astor House, compromise meeting at. 120 Bayard, Thomas, Hon. U. S. Senator. Examination of B. G. Jayne in 1872.. 56-59 Beck, Hon. James B., examination of Jayne. 65 “ “ “ speech of in the House of Representatives. 159 Bliss, George and Noah Davis, controversy between. 97-114 “ “ speech before Committee Ways and Means. 97 Boards of Trade, action of in reference to repeal of moieties. 5 Boutwell, Hon. George S., advice in the case of Phelps, Dodge & Co. 21 “ “ “ remarks on the Moiety Bill. 179 Boyd, Samuel, Custom House Officer, affidavit of.. 77, 78 Brainerd, Charles, illustrations of Jayne and his operations. 56, 67 Bribery of Merchants’ Clerks confessed by Jayne.60, 61 Butler, Gen., charged with using stolen letters. 231 “ “ employment as counsel by Jayne. . 62 “ “ falsifications exposed. 198,258 “ “ speech and buffoonery in the House of Representatives.192-194 “ “ threats of damaging letters exposed. 22,23 Calabria, invoice G, Oct., 1871. 47 “ “ Nov., 1871. 50 Collector of New York, testimony respecting the leaden statuary. 256 Comandi, Joseph, story of. 142 Commerce, Chamber, annual dinner of in 1874. 151 Committee of Ways and Means, Forty-third Congress. 5 Compromise, terror used as an agency for compelling. 14 “ why did they ?. 149 Conkling, Senator, advises heavy penalties.164, 165 “ , “ connection with the ease of Phelps, Dodge & Co. 97-161 Cost, as a basis for assessing duties. 109 Custom House abuses. 135 “ “ oaths... 15 “ “ officers, payments to by Merchants. 91 Davis, Hon. Noah, statement before Committee of Ways and Means. 97 Dawes, Hon. H. L,, picture of Jayne and his associates. 169 “ “ speech in the House of Representatives. 234 Dodge and Butler. 137 Dodge, Hon. W. E., closing statement of before Com. of Ways’and Means... 86, 87 " “ “ correspondence with B. G. Jayne. 9, 10 iv INDEX. Dodge, Hon. W. E., speecli before tlie Committee of Ways and Means . 7 ,r ’ .i “ testimony before Congressional Investigating Com . 269 Dodge, William E., Jr., letter from, read l^forc the U. S. Senate . 270 Duties assessed on market value. 35 “ how best levied, IIoii. Noah Davis’ opinions . 103 ^ IO 9 Edmunds, Senator, remarks on the Moiety Dill . 235 “ ■■ comments of the Press on the sjieech of . 239 Errors, liability to occur in making entries of merchandise, illustrations of. ., 38, 39 Farnum, Samuel .1., Custom Iloii.-e ( UTieor, alTidavit of . 77^73 Fessenden, Hon. W. P., action in reference to error in tariff of 1804 . 245 Foster, Hon. Charles, speech in the U. IS. House of Re|,re.seutative 3 . 227 Handcuffs, use of by .Tayne for intiinidation . 57 Heller, Frank, affidavits of. 73,80 Herve, dishonest Clerk of Phelps, fiodge Co . 7 q Images, leaden, true story of. 239-242 ImjJorters, demoralization of. 253 Informer, Curran’s portrait of an . 02 Informers, wages and plunder of, how divided . 05 Invoices, coihes of those cliargeil to have been under valued. .. . . 47, 54 “ dujfficate, meaning of charge of u.sing . 14 James, Daniel, biograi)hy of. 28 .James, D. Willis . 75 70 Jayne, B. G., e.xarnination and statement before Com. of Ways and Moans, 6 , 55 , 62, 82 “ “ his character, drawn by Mr. Bock . 107 illustrations of testimony of, before Congre.ssional Committee of 1G9 . ,56, 5 lommittee of Ways and Means.. 125 Investigation “ “ violent conduct before Jayne, the informer, a leaf from lii^ Jayne’s contradictory te.stimony. Jai'ue’s moral suasion . Kennedy, Clerk for Phelps, Dodge ami ( Letters, packages of private, stiffen and Market value as a basis of duties. Martin, Warwick, his affidavit. . 219 Merchants of New York in council . J 44 Merchants, payments of Custom House ( )|h,vrs by’ ’ ’ ’ ’ ’' ' ’ ’ ’ ’ 91 triumph of over the informers.’ . " ! 173 hi.s di.scimrgo and actions . 69 d for inlimadalion .62,63,64 Moiety System, the . . “ Moore, P. N., affidavit of. .. . pnhlic nieeliiig.' Nourse, B. F., of Boston, speoe. . Overpayments on duties by Phole Pay back the money PEelps, Dodge &0o.,‘ap;'g 'to “ card in refer Dodge ( I their imiiurls. to charges preferred by Gou. Butler.. 257 INDEX. Page. Phelps, Dodge & Oo., how their case came before the Committee of Ways and Means. 6 “ “ “ terms of settlement by.. . 23 Plunder of Phelps, Dodge & Co., how distributed. 65, 161 Porter, William Dodge, affidavit of.73, 74, 79 Post-office of New York, employment of faithless clerks in . 70 Press, comments of on the Congressional Investigation... .124-147, 153-173, 175-189 Prices, remarkable Fluctuations in 1872. Railroad Iron, fluctuations in price of in 1872-3. 25 Representatives, U. S. House of, verdict on the “ Moiety ” and " Seizure of Books and Papers ” Bill. 173 Report Committee of Ways and Means. 155 Roberts, Hon. Ellis H., speech in the House of Representatives.156-222 Russia Sheet Iron, liability to damage . 26-76 Sanborn Contracts, Butler’s connection with. 218 Schultz, Hon. Jackson L., remarks before Committee of Ways and Means.... 89 Scott, Senator, remarks on the Moiety Bill. 177 Secret History of the Phelps, Dodge & Co. case. 147 Senate, U. S., action on the Moiety Bill. 175 Slander, Custom House, disproved.•.. 141 Spy System of the Treasury. 139 Story of the Phelps, Dodge & Co. case, the whole told connectedly. 268 Theft of Papers acknowledged by Jayne. 81, 82 Tin Plate, ad valorem and specific duties on. 28-43 Tin Plates, relation of ad valorem to specific duties on. 209 Treasury Spy System..'. 139 Tremain, Hon. Lyman, speech in the U. S. House of Representatives. 237 Turkey and the United States contrasted. 141 Undervaluation charged against Phelps, Dodge &■ Co.; what it amounted to. 21, 27, 29 “ '• insignificanceof amount charged to Phelps, Dodge & Co 190, 191 Ways and Means, report of Committee of. . 155 Wells, Hon. D. story of the case of Phelps, Dodge & Co.160, 269 Whitelow, Clerk for Phelps, Dodge & Co. 71 Why did they compromise?. 149 Why they paid. 132 Woodruff and Robinson difficulty with the Custom House. 64 CONGRESS AND The Case of Phelps, Dodge d Co. At the commencement of the 1st Session of the 43d Congress (December, 1813,) there was no one matter, upon which the public sentiment of the country was more pronounced and unanimous, than that the treatment to which the merchants of the great seaboard cities had been recently sub¬ jected, under the then existing laws regulating Custom House proceedings, should be made the occasion of early and thorough investigation by one or both branches of the National Legislature; and further, that the scope of this investigation should be made sufficiently comprehensive to include within its sphere the subject of the employment on the part of the Hovern- ment of professional spies and informers as instrumentalities for executing its laws, the corruption of merchants’ clerks and other employes, the dis¬ tribution of moieties, and the arbitrary seizure and unlimited detention of private books and papers. The whole matter about the same time took a more definite shape also, through the action of the National Board of Trade, and the Chambers of Commerce and Boards of Trade of Boston, New York, Philadelphia, Baltimore, and other cities—all of which organizations adopted pertinent resolutions, condemning in the most forcible language the laws under which the Customs duties were collected, and appointed committees, composed of leading merchants and citizens, to visit Washington and ask attention and redress from Congress. Under such circumstances the Com¬ mittee of Ways and Means of the House of Representatives, having been duly vested on the part of the House with the recpiisite authority, early in February, 1874, entered upon an investigation of the alleged grievances; proper invitations to be present having been previously given to all parties specially interested and capable of imparting information. The following are the names of the members of the House of Representa¬ tives composing the Committee of Ways and Means, to whom the investiga¬ tion was intrusted: Hon. Henry L. Dawes, Massachusetts, Chairman; Hon. William D. Kelley, Pennsylvania; Hon. H. C. Burchard, Illinois; Hon. 6 CONGRESS AND PHELPS, DODGE & CO. Ellis H. Roberts, New York; Hon. John A. Kasson, Iowa; Hon. Henry ^Vaklron, klicbigan; Hon. L. A. Sheldon, Louisiana; Hon. Chas. Foster, Ohio; Hon. James B. Beck, Kentucky; Hon. William E. Niblack, Indiana; Hon. Fernando Wood, New York. HOW THE CASE OF PHELPS, DODGE & CO. CAME BEFORE CONGRESS. At the outset it was not the intent of the Committee to make their in¬ vestigation the occasion oi s^pecially reviewing the difficulty of any one firm or individual with tlie Custom House authorities or the Government, but rather to devote their attention to inquiries of a more general nature. Cir¬ cumstances, however, determined that it should be otherwise; for on the first day of the hearing (February llth), and subsequently, on the 3d of March, B. G. Jayne, the head detective, spy and informer of the Custom House—the man above all others most responsible for all the iniquitous and arbitrary proceedings which had taken place under the laws—came before the Committee, and, in anticipation of all other witnesses, and with evident hope of relieving himself in some degree from a general public feeling of odium and detestation, renewedly accused Messrs. Phelps, Dodge & Co., in common with other merchants, of serious and grave offences against the revenue laws, as his own most efficient defence and justification. These accusations, moreover, were accompanied by such an amount of gross and indecent abuse against the merchants of New York in general, and the firm of Phelps, Dodge & Co. in particular, that the Chairman of the Committee was finally compelled to inferm Mr. Jayne that if he did not at once change the character of his language and conduct himself properly, he would for¬ bid his (Jayne’s) further speaking and have him removed from the Com¬ mittee room. The controver.sy of the firm of Phelps, Dodge & Co. with the Government having thus at the very outset of the inquiry, to use an expression of Jayne, been made “a sort of pivotal case/’ and the accusations preferred by Jayne having been given to the public through the press, in the fulle.st detail, an equally public opportunity for the parties arraigned to be heard in reply was immediately demanded of the Committee. Accordingly, at the next session of the Committee (March 5th, 1814), Mr. Kelley, of Pennsylvania, in the chair, Mr. Benjamin F. Nourse, of Boston, arose and said : “ I have the honor to represent at this hearing the National Board of Trade, because, as one of its officers, I was selected to present its memorials to Congress praying for amendments in the laws concerning the collection of revenue from customs. AN EXTRAORDINARY HISTORY. 7 “In the discnssions of the National Board, only the character and opera¬ tion of the laws and the necessary amendments have been c )nsidered, irrespective of, and as far as possible uninfluenced by, the cases when importers have been subjected to charges of fraud ; and it was our purpose to present our cauise here in the same manner, advocating it upon the assumption, however rash that may be, that the officers of tlie customs have acted only in the line of duty, in strict obedience to law, tliat we might charge the law itself as a wrong doer. “ Coming as petitioners, we supposed we should be first heard in support of our petition ; but we find that an opponent of the desired reforms has been permitted to occupy the first two days of this hearing. The resist¬ ance thus presented consisted chiefly in statements of cases wh(*re an im¬ porting house of high standing and character had been charged with frauds— wilful, deliberate, and involving groat moral turpitude. We find ourselves confounded at the outset of our work with the very complication and embarrassment of private interests wliicli we sought to avoid as obscuring the real merits of the subject. To clear all this away and be enabled to bring our propositions on their merits alone before you, we ask that these private matters, in which guilt or innocence can have no proper influence! upon our special subject, and in the discussion of which we can take no part, shall be first disposed of and be dismissed from before this Com¬ mittee. “For myself, and I believe for the other representative merchants present, I respectfully suggest to 1 he Committee that after the extraordinary accu¬ sations brought in this place, in terms which you heard, and I need not describe, against the house of Phelps, Dodge & Co., it is but simple justice that Mr. Dodge, who was, and is, present, shall have an opportunity of being heard in his defence and explanation, if lie shall choose to present them, before that private matter shall be dismissed. For that purpose, I propose to give way at this time, but with the hope that the Committee will then resume the hearing upon the proposed amenuments, to be followed by the explanations and testimony of merchants.” The Chairhax. —The Committee has anticipated the possibility of such an application, and had determined that if such an application came from the parties with whom you are associated, it should be acceded to ; with this understanding, however, that the hearing of Mr. Dodge is to constitute no precedent for further interruption in the hearing of those parties who are here specially with reference to the general law. On this condition, Mr. Dodge will now be heard. s CONGEESS AND PHELPS, DODGE & CO. STATEMENT OF MR. WM. E. DODGE BEFORE THE COMMITTEE OF AMAYS AND MEANS AT AYASHINGTON, AIARCH 5th, 1874. Air. Chairman, in coming before this Committee with mj associates of the Chamber of Commerce, I had expected simply to present my views in reference to the revenue laws and their administration. I had not thought of entering upon any specific case, and as our own has had sufficient of publicity, it was not my intention to trouble the Committee with any particular statement in reference to it. But the very extraordinary course taken by the Government official on the first meeting of the Committee, and more particularly the manner in which he addressed some of its members at the close of the session, showing copies of what he called fraudulent and duplicate invoices, thus endeavoring to make an impression adverse to myself and my firm, has placed me under the necessity of speaking in rny own behalf. I feel under obligation to the ('ommittee for the opportunity to make such statements in regard to this matter as, I think, will satisfy them that a very great wrong has been done to us, and I cannot better give the Committee a clear insight into the whole management of the revenue detective laws as they are now administered, than by the recital of our own connection with them. Before, however, entering at length upon the remarks which I have to make, I would like to ask the special agent of the Treasury Department to look at the official correspondence which was obtained from the Treasury Department, and state whether it contains all the correspondence on the subject, excepting the letters which were referred to by him as having been written by me to him, and his reply. In the course of my remarks I shall have to refer to these official letters and documents, and I simply want to know before 1 start whether these letters and documents, as they are there published officially from the Treasury Department, are all that have a bearing on the case. The Ohairmax. —I think you had better make your own statement. AA"^e would not like to see a discussion between you and the Treasury agents. Air. Dodge.— I want simply to avoid that. After our case had been be¬ fore the public for some time and we had paid our money, the press, not understanding the matter, as we believe, was constantly confusino' the million dollar suit with the $271,000 paid, and thus creating the impres¬ sion all over the country that the $271,000 was the amount of the duties which the Government were entitled to, and- of which it had been de¬ frauded by alleged undervaluations. I simply said to our attorney, who was a personal friend of Jayne’s, “Great injustice is being done to us AN EXTRAOllDINART HISTORY. 9 through the press, and I think it is through the influence of the Govern¬ ment officials. We have paid this money, and now a wrong impression has gone abroad, and we have liad no means of contradicting it officially. It, therefore, appears to me that Jayne could write a letter in which he might state, simply, that the suit for a million dollars was jirro forma ; that the $211,000 paid was in compromise or settlement, and was not the amount of the duties due to the Government, but that 16,658.IS was the total amount of undervaluation, and $1,664 the total amount which the Government was entitled to as duty.” My attorney said, “Mr. Ja^uie will do that, I am sure.” I then drafted the letter which Jayne read here. My attorney took it to him. After a day or two I asked him if he had had Jayne’s reply. He said, “No;” that Jayne was very ugly, and that he could not get anything satisfactory, and, therefore, did not take anything- We have never seen the letter whieh Jayne said he had written to me and which we had suppressed. The letter was not sent to us. It may pos¬ sibly have been handed to Mr. Wakeman, and, of course, in printing the proceedings we could not publish a letter which we never received. As soon as I heard of it here I immediately telegraphed to my partner in New York to know if any such letter was in our possession, because we have kept all the papers in this case distinct. He telegraphed me in reply that he can find no letter from Mr. Jayne dated on the 26th of March, and that the onh' letter he finds is the one under date of March 31, published in our statement.* * The following extract from the statement made by Jayne before the Committee further explains the matter here referred to by Mr. Dodge. After referring to certain letters addressed to him (.Jayne) by Hon. Noah Davis, he said, “ I received this one from William E. Dodge: ” “ B. G. Jatne — Dear Sir : Now that the matter in controversy between onr firm and the Government has been amicably adjusted, as so many misstatements have appeared in the papers, I shall be greatly obliged for a line from yon staling the facts. Very truly yours, “WILLIAM E. DODGE.” Inclosed in tltat was a letter prepared for me to sign, and which was also in the hand¬ writing of Mr. Dodge. It was in those words: “ In reply to your note of this date, I consider it duo to you to say that the million of dollars for which a pro/orwia suit was instituted against your firm was not Cor that sum, but the amount of the several invoices which contained items that it was contended were entered below their market value, and might, under a strict ruling of the Revenue Department, forfeit the entire invoices, “ Hence, your agreement to have these items stricken out of the invoices, and, in order to save the vexation of a protracted lawsuit, you offered to pay the Government the aggregate of these disputed items, amounting to $271,000, but not, as some suppo.se, an, extra duty claim, which was the entire value of the articles in contest. The actual difference in duty paid at the time of the entry and that claimed by the Government was a very inconsiderable amount, which a few thousand dollars would have covered. Thus the Government has received in the form of a money profit a sum far in excess of anything they might claim for duty. Misstatements in the papers a'< to extra invoices have conveyed a wrong impres¬ sion. They were not duplicated, but copies of the bills received by the firm in Liverpool from the manu- 10 CONGRESS AND PHELPS, DODGE & CO. It is not a very agreeable duty, Mr. Chairman and gentlemen, although I feel it an important one, to stand before you to-day to defend my good name and the name of my firm ; but I feel that it is a privilege, because you are here as the representatives of the Government, before whom we have never had an opportunity to make an}^ statement other than our printed one. In the statement that I now submit I will show the work¬ ings of the law, by giving an outline of the particulars in our own case, without entering into all the minutise. At the present time, and without any agency whatever upon rur part, an attempt has been made to parade our case before the public again, with the assurance, which was made originally, that it is one of the most tor- facturtrs for some special articles m inufactiired to order and on their own contracts. The claim that your Arm had been in the habit of bribing Custom House offlcer.s was not sustained by my examination.” Tliat was sent to me by the Hon. Abram Wakentan, tlie attorney of the firm, for my sig¬ nature. I refused to sign it. This paper from which I liave been reading is in Mr. Wake- man’s liandwriting. When I refused to sign it ho wanted possession of the letter; but I refused to lot it go back without his certifying to the oopy of it. Tliis their attorney did; but before lie did that he had sent this letter ; “ Deau Me. Jayne ; Please let me have the draught memorandum of Mr. Dodge that I left with you. I will return it in a few moments. I want it in preparing the sort of a letter that I indicated last night.” He had indicated that he would write a different letter for me to sign. In reply to tliis letter from Mr. Dodge I wrote to him on the 26th of March, 1873, as follows : “William E. DoudE—My Dear Sir: Your note, with accompanying memorandum, was handed to me by Mr. Wakeman, and in reply I would say that it would give me pleasure to make any statement in regard to my belief in regard to your own personal participation in the irregularities of the firm. The suit instituted was for the recovery of full invoices entered in violation of the first sijction of the Act of March .3, 1863. That statute requires that all merchandise shall be invoiced at the actual purchase price, and that the owner, or his agent, is required to verify the truth of the invoices on oath before the United States Consul nearest the place of shipment. The owner or his agent is also required to verify the truth of the invoices at the time of making the statement. “The facts concerning the invoices and the entries on which suit was instituted are, first, the price paid for the goods was not truthfully stated ; second, the price was stated less than the purchase price; third, the oath before the Consul at Liverpool did m.t conform to the truth; fourth, the invoice sworn to was a false invoice ; fifth, the entry sworn to was false; sixth, the copies of invoices showing the true- purchase price were found in the possession of yonr firm; seventh, there is no circumstance, aside from the high standing of your house, which distinguishes this case from any other case of violation of the law, except a belief on my part that you personally knew nothing of the infringement of the statute; eighth, that statute of 1863 is plain and explicit; ninth, it seems unnecessary to travel outside the record to confirm or contradict statements made vvithoiit my knowled.ge or authority. •‘Allow me to add that it seems to me unnecessary to keep up an agitation of this matter, and that, while I hiive refrained from saying more than duty required, I find it absolutely impossible to falsify the record of facts for the accommodation of any one.” J.AYNE.—“ In publishing the correspondonco in this ease to the world, Pliolps, Dodgo &Co. did not publish this last letter, and if tliat omission does not come under the old maxim, that the suppression of truth is the assertion of falsehood, I would like to know tvhat does," As the statement of Mr, Dodge above given shows that the letter written by Jayne was never received by the person to whom it w'as said to be addressed, the moral maxim made use of by Jayne to sharpen his denunciation of the persons whom he had injured, entirely loses its significance.—Acfi'to?’. AN EXTRAORDINARY HISTORY. 11 rible cases that has ever occurred iu the liistory of the American revenue service, and that the evidence of fraud, premeditated and continued for a series of years, is beyond all question. We trace these statements directly to parties who have participated in the money extorted from us. It has been intimated that our case was to come before Congress, to be more thoroughly ventilated, and that we are to be shown up as men who have deliberately undertaken to defraud the Government. All this is done to strengthen the system which has placed in the pockets of these people these large sums. There are certain questions which will naturally arise in the mind ot every man wdio has his attention called to the consideration of our case. The first is. How could a firm which hm been lyuvmiiig a business fior forty or fifty years, and which has heretofore sustained a rejndation for honest deal¬ ings, not only w'lth Gocernment but loith individuals, and ichich, in the course of more than forty years' transactions loith the customs, has never until now had any difficulty of any kind loith the Government, and ivhich might be sup¬ posed, at least, to be beyond the desire of accumidoiing a few hundred dollars, all at once descend to the mean and contemptible business of defrauding the revenues out of a sum comjmratively insignificant? The next question is about the alleged duplicate and fraudulent invoices, which have been so ex¬ tensively paraded before the public. Next, hmv is it possible, unless members of the firm felt that they ivere guilty and afraid to go before the Court, that they could be induced to pay $211,000 to compromise the demand against them rather than contest the points at issue? In regard to the first I will say that wc have imported between three and four hundred million dollars’ Avorth of goods. Wc have paid to the United States Government more than $50,000,000 in duties. And I may say it Avith perfect confidence that our good name and our integrity has never been assailed in these many years until it was assailed by the Government. And in Avhat Avay, and how Avas it assailed ? Were there no rights Avhieh honorable and upright merchants might claim or demand of the Govern¬ ment—men Avho had conducted for such a sei’ics of years their business honestly and faichfully ? If error, or even fraud hud been suspected, pri\ te individuals would certainly have taken some other method than that adopted to have ascertained and brought it to the notice of the firm, that they might have an opportunity for explanation. As the Custom House Avas managed a quarter of a century ago that would have been the course pursued. There never was a collector in the port of New York in those days Avho, under such circumstances, would not have sent for the head of the firm and said: “Sir, there are such and such charges here, and before Ave take any steps in relation to them I Avant you to go before the proper 12 CONGRESS AND PHELPS, DODGE & CO. officers and make such explanations as may enable them to decide as to what course it is proper to pursue.” This is not the way business is done now, by long odds. The first knowledge or hint, in the forty odd years of business that I have had with the Government, that I was accused of any dereliction of duty was when, sitting at the board of one of our large institutions, I received a note from my partner asking me to come to the Custom House. I went there; was taken into the little dark hole, lighted by gas, where this business is done, and There, for the first time, I con¬ fronted this man Jayne. The then district attorney. Judge Davis, was also there, and my junior partner, Mr. James. I had no more idea of what we Avere called there for than the man in the moon. Not a thought had ever crossed my mind that there was anything wrong with the Custom House. Mr. Jayne opened upon me in his bland way, and said that he was very sorry to be obliged to say that the Government Avas in possession of facts to show that the firm with Avhich I Avas connected had been engaged for a series of years in deliberate attempts to defraud the revenue; and that it had been done, first, by a systematic perjury in con¬ nection with the Custom House oaths, and, secondly, by false and dupli¬ cate invoices; that he supposed I knew very Avell Avhat vA^ere the penalties under such circumstances, stating that every breach of the law in the cases of perjury, of Avhich we had been guilty for a great many years, and many times a year, subjected us to a fine of $5,000, and to imprison¬ ment for not less than two years; that the false invoices, and the under¬ valuation resulting from them, forfeited the entire amount of those invoices. That Avas the first salutation. “And now,” said he, “I have a Avarrant ready, from the District Court, to take possession of your books and papers.” Of course it was a thunderbolt which I Avas not prepared for. I had not seen this man Jayne before. I knew Judge Davis; I knew him to be an honorable, upright man. I turned to the Judge and said, “Judge Davis, this is a very strange proceeding. It is all new to me. I deny the Avhole of it, and I defy this man, or any other man to produce a duplicate in\jfl,,ice ever received, or ever used, or ever known of by the firm of Phelps, Do'hge & Co.” “Well,” said Jayne, “you may deny it, but I have got them all here, and I have affidavits, tod, to the same effect. What is more than that, I have evidence that you have tampered Avith the officers of the Gov¬ ernment.” I said to Judge Davis, “There is nothing in , our business that Ave are unwilling to exhibit to you or to the Government. There is no necessity for a warrant to take possession of onr books. If there are any books or papers that are in our possession that are needed by the Government to AN EXTRAORDINARY HISTORY. 13 establish their case, they are entirely at your service; no objection what¬ ever will be made to your having them.” Judge Davis then said, “I have no knowledge of the matter otlier than the papers submitted to me.” He thought it was a case justifying further investigation. Judge Davis then turned to Mr. Jayne and said, “Mr. Jayne, nothing can be more fair than the proposition made by Mr. Dodge. Now, wlatever books you need Mr. Dodge says you can have; you do not want that warrant.” Mr. Jayne then said he would go with us to our store and get what books he needed. We went to the store, passed into our office and into the back room. I said to my partners, “There is a charge made against us, and a very fearful one, namely, of a systematic attempt to defraud the revenue, and of perjury— making us liable to imprisonment and fine. This is all new to me. Here is the United States officer who has come to take possession of our books. I have told him that he need not come with a warrant, but that he can have any books or papers that he pleases.” Jayne had two or three of his men with him. Our young men at their desks were looking on with aston¬ ishment. They saw that something was happening. Mr. Jayne took out a list of books that he wanted, invoice books, cash books, letter books and papers, a cart was backed up to the door, and his men took out the books and carted them away. Mr. Jayne then took out his paper, and looked over it, and said, “There is one book that I want which 1 do not see here. It is a red covered book with a clasp to it.” I asked my partners if they knew of any such book. I knew that I had never seen such a book in the office. There were none of the clerks, confidential book-keepers, cashier, or either of the partners who had ever heard of such a book. “ Oh,” said Jayne, “ there is such a book here, and we are bound to have it.” Said I, “ In the upper part of our store there is a room where our books have been stored away for the last twenty years. You can take our porters and lanterns and go up there and spend as much time as you please searching for the book you want.” I never heard of such a book, and am sure there never was such a one. But in the statement of the district attorney he says that one very important book was kept Irom that search. Now, gentlemen, I want to let you understand the manner in which the Government deals with the merchants of the country under the operation of the law. I am not here to contradict the remarks made by this special agent, that he was fulfilling his duty, and that he was engaged in the legit¬ imate business of guarding and defending the Government against the frauds of the luerchants of the country. The laws, I have no doubt, have been all arranged and made so as to enable this work to be carried out. I have no doubt that he has gone on, as he said yesterday, and that he has been very industrious. Almost any man would be who was receiving the 14 CONGRESS AND PHELPS, DODGE & CO. same emoluments as lie receives for his labor. You, gentlemen, have a spe¬ cific salary; but this agent has received about twice the salary of the Pres¬ ident of the United States, and about twenty times the salary of any of you in a given time of service. lie ought to work harder and to be a most talented man, as he stated to you yesterday. Now, gentlemen, this general bugbear of false duplicate invoices has been paraded over this country, and not only over this country, but the dis¬ patches have been published (not all of them, but some of them) in London, in St. Petersburg, in France and Sixain, and in India, in which places we have been in the habit of doing business for many years. It was not so much that I feared the jail which induced me to make this compromise; it Avas not so much that 1 dreaded the accusation of perjury; but it was that $1,150,000. That was the pistol held to my ear. It was money or ruin; that is just what it was and nothing more, and what it was intended to be. And our case is but a repetition of other cases. The victim is made to un¬ derstand that his is one of the most horrible cases ever examined by the detectives. I was told by Jayne that he regretted very much to say that he had never been called upon in his life to examine so bad a case as this was. Our papers had all been taken from us; we had this terrific indict¬ ment preferred, and we had no specifications of its details. We have never been able, up to this day, to obtain a statement of the specific charges, and Avhat Avere the specific items in the various invoices of $1,150,000 which Avent to make up the $271,000 that Ave paid. We knew what had been the rulings of the courts in Ncav York—that the least taint in an invoice, an omission of charges, etc., would subject the entire invoice to confiscation; and while the district attorney and other Federal officials Avere to have their fees on the amount collected, we did not feel like going before the court. We had the distinct promise that Ave should have an itemized statement of the particular items of the various invoices to which objection AA^as made, but we never have from that day seen it, or known what those items are lor, only as Ave have been able to guess from simply having the names of the vessels sent to us. The invoices by those vessels, all put together, amounted to £163,000, or between seven and eight hundred thousand dollars. The first time Ave ever obtained anything in the nature of a detailed statement Avas when we received the names of the vessels. Sub¬ sequently Ave understood there were tAVO entire invoices forfeited to the Government, on account of an omission of charges amounting to about $1,000. We have never been able to find out Avhat those two invoices Avere. We do not know to this day, but we suppose from the amount of charges, that they Avere invoices of block tin, shipped from Penang. Tin was bought at Penang, but in order to ship it in an American vessel it AN EXTRAORDINARY HISTORY. 15 was scut to Singapore, at a cost of several Imnclrecl dollars. The prices of this article are, as a general thing, the same at Singapore as they are at Penang, just as the prices of articles would be about the same in the City of Philadelphia and the City of New York. Under the rulings of the Treasury Department goods shipped from Belfast, with the con¬ sular oath taken at Belfast, by way of Liverpool, simply pay the duty they would have paid if they had been shipped direct from Belfast. Under this ruling, and with that understanding, we never thought of such a tiling as adding to the invoice the cost of shipping this block tin from Singapore to Penang. It was a mere matter of convenience; the amount was not added to the invoice, but was added in our account current from our correspondent at Penang. In his annual account current he charged for telegrams and freights between the two places, making, in the whole, something like $1,000, and that amount, I suppose, w'^as what they claimed vitiated and forfeited these tw’o invoices. We did not know how it w'as; the Government had our books and papers; we could not get any accurate idea as to the amount which the Government claimed had been under¬ valued; we made every effort to obtain information, but all that we could learn w^as that it was small in proportion to the amount of the invoices. I then made this proposition to Judge Davis : that they should go over the invoices that were objected to, take out the various items that w^ere under¬ valued, aggregate the amount, and we would give our check for it. These invoices they pretended to examine, but w'e were never present at any such examination, nor was any representative of our house, and we have no idea of the manner in wJiich they made up this $271,000. This man (Mr. Jayne) probably has it in his carpet bag, but we do not know any¬ thing about it. All that we could learn was that it was a horrible case. . Now, in regard to the oath. Mr. Jayne presumes that, having been a merchant for forty years, I did not know what a Custom House oath was. In that interview in the dark place hr took out the oath and read it to me as he read it to you yesterday—the oath taken by our firm in Liverpool when the goods were shipped. But he did then exactly what he did yester¬ day— he said there was nothing there about market value ; that it was an oath that that was the exact cost of the goods. And so it is ; and that has been the oath since 17P9, for aught I know. It is a common thing in New York to say that something of no account is about equal to a Custom House oath. We are not accustomed to swear falsely, but nine tenths of all the entries made in the city of New York, according to the letter of this oath, would come under the implication of perjury. Mr. Jayne did exactly on that occasion as he did yesterday—he read one form but he did not read the other. Here (exhibiting a paper) is the oath in which we swear that 16 CONaRESS AND PHELPS, DODGE & CO. the invoice represents the actual cost and quantity of the goods, and imme¬ diately on the same page, Form No. 2, the Consul of the United States at Liverpool certifies tiiat he knows Mr. R- to be the jDerson who purchased the goods, wares and merchandise therein contained, and who thereupon declared in his presence that it was his intention to make the entry of such goods, wares, and merchandise in the port of New York. And he goes on : “ And I do further certify that I am satisfied that the person making this declaration is the person he represents himself to be, and that the market values and wholesale prices of the goods, wares and mer¬ chandise described in said invoice, in the principal markets of the country at the time of exportation, are correct and true.” Now, when my partner in Liverpool went to Mr. Dudley, United States Consul, he said: “Mr. Dudley, how can I take such an oath as this? Here is an invoice of goods that cost 30s., and I have invoiced them at 36s. to meet market values. If I invoice them at 30.s. and export them to New York, we shall be liable there, if not to forfeiture, at least to have the price so advanced as to cover not merely the difference, but also the penalty for undervaluing.” “Now,” said he, “I have added 6s. to the cost, and you ask me to swear that it is the absolute cost.” Mr. Dudley said : “ Mr. James, all we mean by that is, that it is correct, and that it is the fair market value.” Then the invoice comes to New York, and I go to the Custom House and am presented with the oath “that the invoice which I have now brought contains a just and faitliful account of the actual cost of such goods, wares and merchandise.” 1 say to the deputy collector: “ We have added in Liverpool 6s. to the price of these goods to make market value, and since they came here such has been the rapidity of the advance of value in Liverpool (which we have heard by telegraph) that we have added 2s. more to the value, making it 38s.; and now you want me to swear that that is the actual cost of tliese goods!” “ Oh, Mr. Dodge,” said he, “you simply swear that it is correct.” Now, sir, without swearing in Liverpool to the invoices in the form made out by the Treasury Department the goods could not be shipped. They would have to lie in the warehouse ; and if we did not swear in New York according to the form laid down in the Treasury Department, the goods would go to the public stores and lie there till they rotted. But it is under¬ stood by merchants that the intention of the Custom House oath is simply that the thing is right. If you, gentlemen, suppose that in the Custom House at New York, when a man comes up to make his entry he goes and stands up at the desk, and the deputy collector reads out to him what he solemnly swears, you are very much mistaken. Perhaps it ought to be so, but it has not been so for three quarters of a century ; neither do I believe AN EXTRAORDINARY HISTORY. 17 that it is so in any of the large importing ports of the country. I have been at the Custom House many and many a day witli half a dozen invoices. The Bible stands on the edge of the desk, just like that (holding up a paper to the Committee). The deputy collector says, “ you swear to these invoices, Mr. Dodge?” “ Yes.” Well, that is the end of it. And I say to 3 "ou, gentlemen, that with six or seven great steamships arriving in a single day, and with every merchant hunting to get his invoices through the Custom House, if the deputy collector stops to read all the formal matter of an oath to every man for every invoice, you would require a Custom House four times as big as jmu have now, and twenty times as many deputy col¬ lectors. 1 do not say that the custom adopted is right, but that is the practice. I will now go back and say something to you about these terrible in¬ voices, these duplicate invoices, in the same handwriting (as you were told 3 '^esterday) of the man who made out the original in Liverpool. You were told that these were duplicate invoices sent to Phelps, Dodge & Co., to enable them the more easily to defraud the Government. But, Mr. Chair¬ man, Phelps, Dodge & Co. cannot go into the market of Liverpool, or into any other market in the world, and buy, at any one time, ready manufactured, one eighth part of the tin whicli they keep actually in stock. We cannot go into Liverpool and buy ten, twenty, thirty, forty, or fifty thousand boxes of tin and ship them in a week. We make our contracts with ten, twenty, thirty or forty large manufacturers of tin plate, and we contract to take so many boxes a month, for the year round, or so many boxes a week. In some casesiwe fix the prices on the 1st of January that shall govern the rate during the year. In other cases we make a contract, and the price is to be fixed at quarter da 3 n The manufacturers will ship us the tin all along, and when quarter day comes the price is fixed. A few years ago all the tin plate that was manufactured was but a little larger than this sheet of paper. In process of time the size was doubled. First the size was 10 by 14 ; then it was increased to 14 by 20 ; then came 20 by 28 ; and so the different sizes and the different thicknesses have all gone on increasing.. When the law was passed under which most of these regulations were made (the law of 1199) five hundred boxes of tin plate a year would cover all the importations into all ports of the United States. There are now imported between one and a half and two million boxes annually, and it enters into all the varieties of domestic and manufacturing goods used all over the United States. We now import tin plate as large as the width, of this table, 20 to 80 inches wide, for the purpose of supplying the immense cheese establishments throughout the country. They want it to line their vats, so as to have no break in them. There are no regular manufacturers 18 CONGKESS AND PHELPS, DODGlJ & CO. of tliese tins ; tlicy are not merchantable sizes, like X, XX, XXX, and XXXX, each X representing 28 pounds additional weight ; and when the price ol “I C” tin is given it governs the price of all the others. All tliese immense sizes are made to order. There has sprung up in this country within the last few 3 ’ears an enormous manufacture of tin vessels that are stamped ; large tin pails, holding three, or four, or five gallons, with not a scam in them, and pans of all sizes, all made by taking these large sheets of tin, and, with a heavy press, dropping on them until they rise up into shape. These manufacturers must have tin plates of particular sizes to meet their particular orders ; and when we make a contract with a manufacturer in England, running for six or twelve months, we also make contracts with manufacturers in Chicago, riiiladelphia, Pittsburg, and all over this country, to furnish them with a certain number of boxes of tin per month, of all the jiarticular sizes they want, so that they will be sure to have the sizes that are necessary to make the assortment of goods that they have to sell to their customers. We make our contracts with them for so many boxes a month, at a fixed price, or at a price predicated upon the price in Liverpool at the time of shipment, or at the price in Xew York at the time of arrival. Xow, when we make a contract in England for ten, twenty, or thirty thousand boxes of ordinary sizes, we give at the same time an order for one, two, or three thousand boxes of extra sizes. The manufacturers do not like to make them. Englishmen do not like to be thrown out of their u.sual mode of doing business; but thev will make so many boxes of extra size to so many other boxes of the regular size ; and when they ship along one or two thousand boxes of the regular size, they will also send twenty" or thirty boxes of these extra sizes. They come along in driblets, and are for particular orders. Now, in the hurry of doing business in Liverpool, with two or three steamers leaving in a day (and for the last five years most all our ship¬ ments have been by steamer), things have to be done very hurriedl 3 ^. These ships clear in the afternoon, and, by a regulation of the Consul, every invoice must be at the Consul’s office and sworn to by 1 o’clock. He will not receive them afterward, and the steamers cannot sail unless they have the bills of lading. There have to be four bills of lading and three invoices made out in a hurry, and there is a large amount of writing to be done. Now, in the exigencies of getting these off, our firm in Liverpool has been in the habit of sending these papers (showing to the Committee a press copy of the manufacturers’ bills without the heading), and these are not in any sense or in any shape duplicate invoices. I defy that man Jayne to show one, and I defy the Government to show one. These papers, as I say, being press copies of the bills sent by the manufacturers to Phelps, AN EXTRAORDINARY HISTORY. 19 James & Co., are frequently, in the hurry of business, sent on to us, so that we may know what goods of that manufacturer are included in the invoice. This is not a copy of the invoice; it is simply a bill from the manufacturers to Phelps, James & Co. Any one of these bills may relate to five or six articles. This invoice (holding one up) relates to three articles. And what is it for ? simply to say that in this invoice there are some goods coming out marked These particular goods probably were to go to Chicago, or to Cincinnati, or to Saint Louis, or to Pittsburgh. They come in very large and cumbersome boxes, which we would not want to have carried from the ship up to our store and then to the place from which they are to be forwarded to their destination. But our young man who attends to the shipping is able in this way to know what goods are to go to a particular place, so that he can have them taken from the ship and put on board of the boat or railroaa, that they may go off directly. Instead of being secret invoices designed to cheat and defraud the Government, these press copies were taken and pasted directly on the invoice book, so that everybody might see them, and that when the shipping clerk came he might know what goods were to go somewhere else instead of being carried to the store. The Committee will notice this breach in the top of the paper (exhibiting it to the Committee), where the clerk, who subsequently became the informer, tore it off the invoice book. In this particular invoice to which the press copy refers there are ten boxes Qd. below cost, fifteen boxes Is. 6d. below cost, the whole making a difference of four pounds odd, which will make a difference in duty of about five dollars. Mr. Wood. —What is the amount of the invoice ? Mr. Dodge. —The amount of the entire invoice is £5,114, or about $22,000, and the value of these particular articles is £223. I desire to make an additional remark in reference to these press copies of the manufacturers’ bills. In some cases, instead of having them copied in that way, the same young man who made out the invoices, made a copy of these manufacturers’ bills in his own handwriting, and sent them on ; but in every case they were put on the invoice books, where everybody could see them. The way the mistake occurred in the invoice was as fol¬ lows : These verylarge tins are purchased from the manufacturers by the ton, and they are converted into boxes of 112 pounds or 224 pounds, and it is in making the calculation from the ton to the box that the mistake w'as made. It was in the hurry of computation, and in the pressure for time. In this other invoice, which I happened to take up, I find that the actual amount of the bills, as they came from the manufacturers, was £270 12s. M., while the invoice was £271 18s. Mr. Beck. —So that mistakes occurred on both sides. 20 CONGRESS AND PHELPS, DODGE & CO. Mr. Dodge.— Yes, sir ; clerks are not immaculate, and they will make mis¬ takes sometime.fi. We have recently made in an entry of £1,234 4s. Bd. a slight mistake, and according to the construction of the law, as given before you yesterday, the whole invoice may be forfeited. AVe have made the entry within a week past. The mistake in this instance is, that on the side of the bill of lading there was a charge of £1 3s. 2d., which was not added to the invoice. There were several charges, amounting in all to £44 Is. 5d. But it .seems that this charge of £1 3.s. 2d., Avhich should have been added to our invoice, was overlooked by some negligence. Let the special agent of the Treasury take notice of that, because that whole entry is liable on account of that mistake to be confiscated to the Government, according to his practice. I wish to call the attention of the Committee to the fact that this di.s- missed clerk of ours, when he found in his own conscience, and knew per¬ fectly well that his iniquity would probably find him out, and that he would be dismissed from our employment on account of his complication in other matters, to which I will not refer now (but which were also connected with this matter indirectly), went to work to see how he could better him¬ self if he was turned out. A good deal has been said about the fact that this man stood high in position in the store of Phelps, Dodge & Co. This highminded, conscientious young man, who felt that he could not be guilty of standing there and copying on our invoice books the evidence of the guilt of Phelps, Dodge & Co. (that he could not satisfy his conscience to do such a thing), goes to work and deliberately takes from our invoice books, for a year or two, every single one of these papers (holding up a letter press copy of the manufacturers’ bills), wherever there was evidence that the goods had cost 6d. or Is. more than happened at the time to be put into the invoices, and these he preserved very carefully. He then went to work and tore off a good many more than he had torn off before, whicli contained the fact that the goods were invoiced at much more than they cost. These he destroyed, I suppose. AA^e never have seen them since. They were torn off our books and are gone. Now, gentlemen, after all this thing had gone on to this extent, we were met with a proposition that the thing had better be compromised. It was a terrible thing. I had made an offer that if they would look over the invoices, and itemize the undervaluations, we would give a check for the amount, and it was agreed to by the officials at New York, under the advice of Mr. Jayne. They were in conclave there, with the counsel of the special agent. He wishes to have good counsel, and so he secures the eminent member of the House of Representatives who occupies so high a position now. He was in New York all that time. If he was not he was AN EXTRAORDINARY HISTORY. 21 .sent for every day or two. Tliis discliargod clerk liad made a bargain with the informer to get his share. We understand that the law author¬ izes the appoinlracnt of a special agent, and fixes a salary for him for doing this business, and tliat, rvhen the information comes, the informer is en¬ titled to the share prescribed by law. But instead of this, in all these cases the special agent makes a bargain with the informer, and he himself becomes the informer, while the other man steps back. What the bargain Av^as with our Clerk about dividing the S])oils we do not know. We saw such an array of lawyiu’s, and it was so im])ressed on us that our case was a tremendous one, a dreadful one, and that the goods were clearly and decidedly forfeited to the Government, that we finally agreed to the settle¬ ment ; and they rvent over the invoices and told us that the amount we were to pay was $260,000. It was about the 20th of December that we had our first interview with Javne, and it was perhaps a week afterward (though the days appeared months as they passed) when we were told they had ascertained the amount—not the amount of duty that was due, but the gross amount of the items which went to make up the undervalued goods, and they said that it would amount to $2'30,000. W'e gave a check for the $260,000. The next da}^ it was all paraded in the ))apers. The whole terrific thing came out. Before that it was all kept quiet. But the money was paid and went into court, and then out the whole thing came, and what followed you gentlemen know. After a few days there was a change in the district attorney, and the business lingered along until finally we were informed that by a more careful investigation of the whole matter, they found $211,017.38 as the total amount of the portions of the invoices said to be undervalued. We subsequently learned that the amount of the undervaluation for five years was $6,558, and the difference in duty to the Government $1,658.18. We did not know it till after Ave got this official document (the letter of United States District Attorney Bliss). If we had known it we never should have paid the money. And now, before I forget it, I Avant to do justice to a Government officer Avho, I think, is entitled to have justice done him in this case. I have regretted very much that, from time to time, ever since the settlement, there have appeared in the papers certain hints Avhich Avould seem to indicate that the Secretary of the Treasury (Mr. Boutwell) did not treat us fairly in the matter. If we had followed Mr. Boutwell’s advice avc probably never should have paid this $271,000. I came on to see Mr. Boutwell. He was sick at his house, and Avas kind enough to receive me in his room. I stated the whole case to him, as Avell as I could, in a very short time, and I told Mr. Boutwell that Ave had looked this matter over Avith great care ; that if it was a matter between ourselves and the Government, or if it was 22 CONGRESS AND PHELPS, DODGE & CO. simply a matter between tlie courts of tlie United States and ourselves, and if it were not for the array of ])ower and influence which was behind to make the better appear the worse, we would not hesitate to go into court; but for us to go into court and have a judgment against us for $1,150,000, and to have it telegraphed all over the world that the Government of the United States had sued Phelps, Dodge & Co. for fraud, and had obtained a judgment for that amount, whatever might be the result afterward, the injury to us as merchants would have been irreparable. Because, however swift the fact may go by telegraph, the result of an after investigation would be very slow to follow. Mr. Boutwell said to me, “Mr. Dodge, I think you had better go before the court, and I will assure you that if it comes back to me, as it will come, whatever may be the decision of the court, I will give the matter personal and careful consideration.” I thanked him for it. lie knew then, probably, what I did not know, but which, if I had known, 1 never would have paid the money. I had no knowledge that there was only sixteen hundred dollars involved in the whole case, running over five years, and covering importations to the amount of $50,000,000. I am not so big a fool as that ; but the fact was kept from us, and kept from us piirposely. I had no idea of it. I went back to New York and consulted my partners, and I wrote a letter to htr. Boutwell, which you will see in this correspondence. Subsequently, however, when we saw the in¬ fluence that might be thrown around this matter, the enormous sum of money depending upon it, and when we thought of the fact that it might go into court and a judgment for $1,150,000 obtained against us (for the lawyers said that under the law of 1863 the whole invoice was forfeited), we renewed the offer. General Butler stated that he had a letter from Phelps, Dodge & Co., and all that he wanted was the production of that letter to convict them in any District Court of the United States. What that letter could be we had no idea ; but at last we got hold of it when the business was settled, and as we read it we laughed. The case was just this ; When wo imported the first of these very large sheets of tin plate for these cheese vats, in order to avoid the expense and trouble of putting them into boxes, wc imported them in bundles, and put around the bundles a strip of galvanized iron, and sent them in that way. The ap¬ praiser said, “ Now, this is tin ; this is nothing but tin plate ; but we never had tin plate come except in boxes, and now, to avoid any trouble, you had better write to your folks to have this tin put up in boxes of 200 pounds’ weight, and mark on the outside of the boxes the weight and the name of the manufacturer, and then there can be no question in the matter.” We wrote to our house in Liverpool, “ The Custom House objects to yoursending out these large sheets loose and not in boxes, and they require that the tin AN EXTRAORDINARY HISTORY. 23 shall be put up in boxes of 224 pounds, or whatever sizes tliey may be conveniently put in, and that the exact weight and the name of tlie manu¬ facturer shall be printed on the outside, as in the case of other sized tin ; and we want you to be very particular to see to that, and not let any more of the large tin come out except in boxes.” To that they replied, “ We have received your letter in regard to large tin, and see that you have dif¬ ficulty with your Custom House about it. We will endeavor to follow out your instructions carefully ; but if, in any respect, we differ, let us know, and we will fix it.” Ah, Mr. Butler had caught us now! You have trouble with the Custom House about the large sheets of tin plate, and we have your special instructions what to do; and if not right, “ we will fix it.” That, thought, Mr. Butler, will convict you before any court of the United States! Now, gentlemen, when I came back from Washington my partners and myself consulted very carefully over this matter, and we decided that we had better pay the money than to have a judgment against us of $1,150,000, and to have that heralded over the world, and to run the risk of having these men using what influence they could to secui’e the perpetuity of that judgment, because, instead of their receiving $30,000 each as their share of the moiety of the $211,000, they would have received each of them over $100,000, and that was worth working for. And then there was another difficulty which stood right in our face. The question of Mr. Boutwell’s being returned from Massachusetts to the Senate of the United States was then just on the eve of being decided, and in a fortnight afterwards, on the 12th March fthis was on the 22d February) Mr. Boutwell was elected to the United States Senate. AYe said to ourselves, “ We do not know who is to be Secretary of the Treasury, by whom this thing is to be settled,” and we came to the conclusion to renew our offer. We made our offer, and we settled, and we paid the money. We paid the money to get rid of this enormous charge against us, rather than subject ourselves to a forfeiture of $1,150,000. We paid the money in ignorance of the fact of the amount we owed to the Government. AA^e never had a bill of specifications ; we have not got one to-day ; we have got simply the list of the vessels on which the goods were imported. AYe settled, and this has become the biggest case on record. It is known the world over. We look back upon it, and we think as you gentlemen think, no doubt, that we were fools AYe were fools, but there was terror in all these things ; there was terror in that first day when we went into that dark hole in the Custom House ; there was terror throughout ; and this reminds me of another thing which will show the workings of this law, because these gentlemen do not do anything except and PHELPS. DODGED CO. " itl.m till- iiiw. I Rii|)pose llic ditoctivc lias tlie nal,t * Ih' pl.-ascs, „„ „„U(,T what become., of one’s f 1 ' llo- feelings of families, „.iees „„<1 children. This mal tof'.™ . Y'- "■■:. d„ „ ,„d who had a roioita.ion that had been growing up a great man, • '\V'spies every Step that we took. We '1 Mot liav,. a niecliii^r of our pnrtiier.s in one of our dwelling.s at night \\i iniit itts hcKig known in that clurk hole ne^xt morning ; we could not do » t ling u itlKuit it.s Jicing known ; we could not have our part- nei.'' or oiir lawy.-r.s m onr private- ofiicc without it.s being known. I will !'■ nio an in.^tance of this. My partner, older than my.«elf (and a more hinioi-al.le man does not live on the face of the earth than Mr. James Stokes, '1 - < w Yoik), has been in the habit for twenty years, a.s January came aiunnd, of opf-ning Ids de,~k and clearing it out some rainy day of the •ic(, umiilation of joipers which it contained, throwing them on the floor and niviiig a la,y p„t p, ^ 1 I of Januai \, and within half an hour we received a letter from our at- t"nH‘y to come directly to his office. We went up there, and he said; world is the matter? Jayne is tearing about in a most (III 1 e wav. He says that I’lielps, Dodge & Co. are burning their paper.s, tT* ^ )'* "*''*' ^* ovf-ry soul of them in Ludlow street jail before night.” ^ ^ .p '*■ it ? JIow did lie know that tlie.^e papers were burned sL 1 be paid a man in our store to give information. He had our blit H htepei in bis employment. \Vliat be paid him I do not know ; turn(>fl 1 ''T 'c ^^(ployment I do know. \Ve traced that fellow and out"-' iT'* where did be go when he was turned is be to-d'iv ? '7r * ■ ^ " where be was employed. And where place obtainerl f m Post-office, in the money department—a iui. j,ECK.— VYliat is hi.s name ? longer with this ma^tteT I will not detain the Committee Mr. NiBLACK.-It is very intero.sting to mo. cui ' A° my ege baviu!';::;:'':""" .1 "-"o'' ‘O"* beginning to peace, and when I naid tbi’ " oieic lant fifty jx'ars, I desired to die in it in pnrodelt™, C be tbe end of it. But touched. So Bonsitivo wo, I obout ll,i,°lottb,m° my7 "T'»V’‘‘r came to mo about auotber case and ,aid Ibat tlicv we ' ’ ' ® a-nca mooting Of the Cbamboeof Con,me,me:: :h:7:,°:enii7:^ AN EXTRAORDINARY HISTORY. 25 not a case of mine, and I will not be there, you must get somebody else to preside.” But, notwithstanding, our case is held up everywhere—for what? To vindicate these laws and to show the propriety of having men to watch these “infernal merchants.” We admit that we undervalued our goods by mistake, by the difficulty of ascertaining the exact market value of these extra goods at the time of shipment, the value being gov¬ erned by the general value of the goods in the main line of the invoice. In some instances we did send out some of these invoices at Or?, or l.s., or l.s. 6c?. ; and, I believe, in one case at 4s., on a few boxes, difference from the prices we paid for them six months before. But we did not hide.it. We put it directly on our invoice book, where everybody could see it. You recollect, gentlemen, that was a year of the most wonderful fluctuation in the price of metals ever known. The strikes in England, the rise in coal, the enormous rise in iron and tin, made the year remarkable, so that in the month of January, 1872, we paid 28s. for tin plate ; in the month of July 44s. for the same tin, and in the month of December 35s. To show the wonderful changes in the price of metal that year I will state this fact: I passed through Liverpool in the early part of the year on my way to the East ; I saw all the indications of a great advance in price, and, on con¬ sulting my partner, we bought several hundred thousand boxes of tin plate for future delivery. That is what merchants do who think they have got a prophetic view of things. At the same time I went into market and bought seventeen thousand tons of railroad iron for a company of which I was president, although 1 knew we should not want it for eighteen months or two years But I bought it at £7 10s. and at £7 7.s. 6c?., from two or three different manufacturers. I passed on and went to the East, and returned in about eight months, and when I came back that same iron was selling at £\l 10.s. Now, gentlemen, I have just told you that we bought very largely of tin plaie at lower prices than it was sold for afterward ; and I have shown that, with a double pair of spectacles and with the help of our demoral¬ ized clerk, the special agent of the Government went carefully over our invoices for five years. Before Mr. Ban field would agree to the settle¬ ment he wrote to Mr, Jayne to ascertain exactly what he had done, and what examination he had made into the affairs of Phelps, Dodge & Co. Under date of February 24, 1873, Mr. Jayne replies to that letter as follows : “In reply to your letter of the 22d, making inquiry in relation to what was covered by my report in the case of Phelps, Dodge & Co., I would say that my investigation covered all the importations of that house for the five years nest preceding January 1, ISRl, and that 26 COXGRESS AND PHELPS, DODGE & co.. the matters eallecl to tl.e attention of the Government relate to onH i . ZlZZlnZTZt i,.M . ; “ 7'> “f u-JuBinauenee, and of pay . . non,., ,0 an appraiaor of the Government for the purpose of seenriav m Imn a very lai’Ko appraisement fur damages on a cargo of Russia ■ non ; and tvo tvere told by the special agent, or it was told to our It orney, that he had proof of that fact, and we got him to name the ship in \s iich the damaged iron had been imported. We first got him to fix to (ate when wo paid the money, or when he said we had paid it (and 111 I we had novel- done), to induce the appraiser to give ns a large per¬ centage on the Ku.=sian iron d’he Committee know that the beauty and value of Russian iron consists in its polish, and if it gets blemished or lusted, it is not worth any more than common iron. We had a large de¬ duction made in this ease, Juit not more than we should liave had. We found out why it was said that we had paid this money. It was because t le eloik said he found a check upon our book somewhere for a thousand ( ohii>, and he believed (although there was nothing to indicate it) that t lat check was drawn in favor of some agent of the Government. But we got the name of the ship on which the iron was imported, and on which t us tieiueiidous allowance was made for damages, and we found that the s up sailed fiuiu St. Petersburg .six months after the date when he said the money was paid. Now, Ml. Javne say.s he went carefully ov'cr all our invoices for fivm years, and that he found $(1,658 of uudervaliied good.s, and that the duty goods, at 25 per cent., would have amounted to ^ say that he found anything else ; he did not P ■' >"tnd an\thing to mitigate that. Now, I want to say to this r-airr'i I can prove it (here is the wdiolc collatud uvKluuue of it), tl,»t ,vo paid on one ainglo contract that vear, to t heGovei-nmcntof the United Statee, th.-ongl, o.u- o,vn ovcrvalua'tiono of * What these investi«;atious, oovorin<>- a i.orieil nf eTTZI ^ ,100 and control of all the hookc of ri»l,„ Do l -o o c! ?’ “ ’T. c«7r.:;’r,,”rs7i:»”^ i'h.h«,„;,.,„o„,or.„orc..„ mvoicos. Of iiivoioea ciitorwl since early a, j,,,,"‘'BlBt'rcforreO to and inOuplicato (true) The li„„ In tlio,«l„,„La “ vh 1 ,g! . “» “»»1 ™l"» amount of undervaluation is $6,058 78 The total nmnni-!#- ''r amount to $371,017 23, while the The total importations of the defendants are about $6,OOO^o?otVerr/Government was $1,664 68. AN EXTRAORDINARY HISTORY. 27 goods over tlie price that we paid the manufacturers for them, $58,000 more than we would ha\-e been obliged to pay had tlie articles in question been as¬ sessed, with duties on their original cost; and that during that year our total importations amounted to $8,500,000. We voluntarily added to the invoices ot the goods which were sent from Liverpool $260,000 odd in that year to the cost of our tin, on which overvaluation we paid the Government 25 per¬ cent. duties. Now, gentlemen, if you can suppose for one moment that Phelps, Dodge & Co. deliberately, systematically, intentionally .started to defraud the Gov¬ ernment of the United States out of the paltry sum ot $1,600 by undervalu¬ ations ill the course of five years to tlie amount of $6,000, when upon a single contract we added $58,000, and in a single year $260,000 to the cost of our goods, then I do not know what you would do with evidence. Gentlemeft, I submit this case to you. If I were to go on further I should probably occupy much more of your time, and perhaps I have already occupied more tlian I should liave done, but this matter has been on my heart pretty strongly for the last twelve months. The Committee then adjourned till half past seven P. M The Committee met at half past seven P. ]\r. Mr. Dodge continued his statement. lie said; Mr. Chairman, I tres¬ passed so long upon the patience of the Committee this morning that although I have many things I should like to refer to, I propose to say but a very few words additional, and then give place, to other gentlemen. From the first fall of the thunderbolt in the little gas lit room on that day to which I have referred, up to the present time, great stress has been laid on the assumption that no one for a moment suspected that I, as senior member of the firm, had any knowledge of irregularities in our office, thus by implication placing the pretended fraud on some other members of my firm. But whatever responsibility there may be we will stand or fall to¬ gether. We are all one family, consisting of brothers-in-law and our sons; and as parents we thank God that none of our sons are capable of attempting to defraud the revenue. They are all independent of any motive to such an act; and the three seniors, after maintaining an honorable position until we have reached nearly three score and ten, with God’s blessing on our honest labor, having enough without stealing, intend to go down to our graves leaving our children the inhei'itance of an unspotted reputation, save that stain which the Government has attempted to inflict. 28 CONOKESS AND PHELPS, DODGE 4 CO. Mr. Cl,»in„„„, r ,vo„l,l like to ...y one wora to the effect ot this sjs- eni on ,„,lm,lnaks who are drmk (as my friend Sehults says). I onlv l.ositato fur ,.ar of semninj to brine personal trials before the public, but I can in no other way so well illustrate the injustice of these laws. My partner, Mr. Daniel Janie.y was from Central New York, if not in the district of your ineinher, Mr. Roberts, yet very near; the son of an' earlv settler, a worthy fanner; when a hoy he came to oar city, obtained a situ¬ ation in a store, was failhfnl, industrious and enterprising This secured for him in few years th(> position of a partner; soon after he married a daughter of .Mr. Phelps, snbsefiuently joined the firm and removed to Liver¬ pool, where for over forty years he has been the resident partner, sustain¬ ing the character of a hiyh minded, respected and honorable merchant, and for a numlx'r of years past the oldest American merchant in England; his name a synonym of honesty and u]»rightne.ss, and shedding a lustre on hi.s own country and American merchants; gratified by the honors conferred abroad, but ever looking with pride as an American citizen for protection to Ids own country. Tn all this time not a question had ever arisen as to the vast shipments made to the bouse in New York. On entering his office one day in Dcceml)er, 1872, he found the following dispatch in leaded lines in the newspapers; PiiEues, Dodge k Co., Kew Youk.—T his great Arm have Iiad their books and papers seized by the United Statc.s for alleged fraiid.s on the revenue to the amount of §1,750,000." I will not attempt to describe the feelings of such a man. I will simply say that tlie shock came well nigh killing him, nor has he ever entirely re- covcied. lie felt that a life long reputation, dearer to him than aught else, had been struck down in a moment by his own Government, on which he had depended for protection. He had pa.ssed his th ree score and ten, until then witli an uiiblemisl.ed character, and felt that at least he had a right to demaiitl thiit lio sl)oul(l bo " con.siderod innoceat till proved guilty.” Oatt a law liable to produce such results be just? I would like to say one word with reforcucc to substituting a specifle in place of ail ad mlorem duty on tin plato. It is the general feeling of the trade that such a modification of the duty is entirely practicable and desir¬ able. Very cai-efril examinations have been made by seceral ill the trade, going over Uie last throe or four years, and making a table of all the dif¬ ferent kinds ef tin imported and their weights, and tlie eonclii.sion is tliat 1 tin iMate was subjected to a specifle duty of one cent a pound, including d A '‘T’ “ equivalent of the present ad vatoyem duty of 15 per cen„ probably a little biglier. It would make a difference of a few liundred thousand dollars in favor of the Government and against AN EXTRAORDINARY HISTORY. 29 the manufacturers, but it would at the same time remove the great diffi¬ culty that is constantly arising as to home values. Referring to the matter of our clerk, I want to add that if that very hon¬ est clerk, who was referred to so kindly by Jane, had apprised any member of our hrm that there had been in his opinion any irregularity in the man¬ ner of shipping the tin on the other side, we would have availed ourselves of the privilege given us in our oath, and so informed the Custom House. This is what he ought to have done if he was an honest young man. And now, in conclusion, gentlemen, I would say with all frankness, not as one suffering from a sense of injury, but as one who has always stood by the Government, fulfilling to the utmost every claim incumbent on a good citizen, that unless something is done to reassure the confidence of the im¬ porting merchants very soon, they cannot be expected to continue their business. A very few years of the present system of Custom House busi¬ ness will suffice ;o drive American merchants from the field and transfer the importing business to unnaturalized foreigners, who, keeping no books in this country, will, after making their money, return home to spend it. Then, with our American merchants driven from commercial pursuits, we shall present to the world the sad spectacle of a great country without a mercantile marine, its commerce handed over to be prosecuted by strangers. Gentlemen of the Committee, I trust that you will keep clearly in your minds that the Government admits—- 1st. That the total amount of importations by Phelps, Dodge & Co., in the five years ended 31st December, 1812, was $30,000,000. 2d. That in a careful examination of these importations, it found some articles in different invoices which it claimed were undervalued, and that the total amount of these invoices was $1,750,000. 3d. That the total amount of the articles claimed to be undervalued was $271,017 23. 4th. That the total amount of the undervaluation claimed was $6,658 78. 5th. That the total amount of duties claimed to be lost was $1,664 68. These facts do not furnish the least evidence of intent to evade the cus¬ toms law, especially when taken in connection with the fact that in one of these years we paid duties on over valuation of our invoices of over $260,- 000 to make them equal to market value. In the light of this investigation we claim that the Government cannot have lost a dollar by alleged under¬ valuation, for they collected the same duty that they would have received if the goods had been purchased at the date of the invoice, viz., the market value at the date of shipment. Our error was in entering them at a frac¬ tion less than contract cost, in trying to meet market value, and that only (■ON(JRESS AND PHEI^S, DODGE & CO. 30 to an extent so small compared with the large amount invoiced above cost as t(j })reclude all idea of wrong intent. Any law tl.at could be construed to make us liable to the confiscation of entire invoices of the value of nearly $2,000,000, and compel us to pav $271,000 fur fear of a greater danger (even though in the light of present facts we admit we made a great mistake), should not be permitted to re¬ main in force'. 1 am very much oljliged to the Committee for the kindness with which they have li.'.teiied to me. Mr. IvAssoN. — 1 wish to be [)crfectly clear as to one of the points made l)y you. 1 mean what is known as the owner’s oath, made at Liverpool by somebody. Hy whom in the case referred to was that made? Mr. Donoi’..— By Mr. Bees, tin; English partner of our house. The houses are identical with this e.xception. The firm of Phelps, James & Co. consists of all the Ani(;ricau partners, together with the English members there, and while we have an interest in everything there, they have no interest in anything here. Mr. Kasson. — Then that owner’s oath called only for the actual cost? Mr. Dodge. — It calls for cost, while the consignee’s oath is for value—for market value. Mr. Kasson. — There was exhibited to us what are called rightly or wrongly the duplicate invoices, which seem to have been detached. Were those duplicate invoices forwarded to you subsequently to the shipment or at tin- time ? Mr. Dodge.— At the time, always. Mr. Kasson. — By this same partner of jmur house ? Mr. Dodge.— By the firm of Phelp.s, James ct Co. The business letter is generally written by the senior partner, Mr. James, while the active busi¬ ness is done by the junior partners. Mr. Kasson. Ihis certificate of the Consul speaks of the alternative of actual cost or market value. Does the owner or shipper himself make oath to the market value in case where he has purchased the goods, or does he simply give in the oath, known as the owner’s oath, the actual cost? Mr. Dodge.— He gives the actual cost. That is the design of it Mr. Kasson. And the market value is sworn to when they a’re shipped, otherwise ? Mr. Dodge.— Yes, sir; when they are consigned. But, as I stated to-day, and as the gentlemen will all understand, it is utterly impossible, as there IS no other oath, that where we put up the price of our goods above cost we had to take that oath. But where we did it we stated to the Consul that the goods cost so much, and we put them up so much, and we only took the oath for the purpose of shipping the goods. AN EXTRAORDINARY HISTORY. 31 Mr. Kasson. —There is precisely the point. But why do you have in that case to swear to the market value at all ? Mr. Dodge. — We do not, sir. ]\Ir. Kasson. —Then where is the difficulty of swearing to the actual cost of any goods? I do not speak of your case, but in the case of any mer¬ chant ? Mr. Dodge. —It is just here If we swear to the actual cost of 30s., and our invoice called for tin at 30s. when it came before the appraiser here, if, ' knowing, as he should, that the price was — through a rising market — 36s. or 37s. in Liverpool, the valuation of cur goods would not merely be increased to the amount of the rise, but we would incur the penalty for undervaluation. Mr. Kasson. —Does that follow necessarily? Mr. Dodge. —Yes, sir. Mr. Kasson. —If you make a statement as to what they actually cost, and swear to it, if that is true, do you mean to say— Mr. Dodge (interrupting).—I mean to say that if we sliould import tin that cost 30s., bought on previous contract at 30s. in Wales, and deliverable in Liverpool, as seven eighths of all our goods generally are, and the mar¬ ket price at time of shipment had advanced beyond 30.s., if we invoice them at 30s. we should not only have our goods advanced to market value, but should be also subject to the penalty for undervaluation. Mr. Kasson. — If you also stated the market value as different from the cost price, so that there was no concealment? Mr. Dodge. —I never have known an invoice made out with two prices. Mr. Kasson. —But the law calls for a statement of the actual cost. That is, what is known as the owner’s oath. Mr. Dodge. —Yes, sir; that is true. -Mr. Kasson. —Does the law involve the merchant in this difficulty—that if he stYears to the actual cost, and the appraiser at New York finds that the market value is different, about which there can be no misrepresenta¬ tion by the merchant, the merchant is liable to a penalty in that case ? Mr. Dodge. — That is so invariably. It is just the difficulty. There would be no difficulty in entering our goods always at cost if it was not for this ruling at the Custom House. Mr. Kasson. —Do you have to make any oath in that case as to the mar¬ ket value at all ? Mr. Dodge. —No, sir. Mr. Kasson. —You cannot refer to the law which puts the merchant in that condition, can you? Mr. Dodge. —I had the two oaths here to-day. 32 CONGRESS AND PHELPS, DODGE & CO. Ih. Kasson.— Bat the other oath, I mean. Atr. Bodge.— I do not knon^ the la^v reference. There are two oaths. One is known as tlie owner’s oath, and then there is the consignor’s oath! Mr, Kassox.— Tlie consignor’s requires the market value? Mr. Dodge.— Yes, sir; and tlie owner’s only the actual cost. Mr. Kasson.— I see at once how the consignor’s oath may subject him to difficulty it the appraiser thinks dilfcrently of the value, but where there is , no evidence in the appraiser’s hand against the cost price which the mer¬ chant gives in his oath, I was not aware, and, consequently, your state¬ ment is a surpri.se to me that he is .subjected, in consequence of the dif¬ ference between the actual cost and the market value, to forfeiture. INlr. Dod(;e. —Not to forfeiture, but to a penalty. Mr. Kasson. 1 hat is the nature of it; and, if it is so, we certainly ought to make a note of it. Mr. Bodge. Aou will find that it is so. For that reason we always put up our goods, and frequently, as I mentioned to-day, in the change of maiket price between the time the invoice is made in Liverpool and the time of the arrival of the steamer here, the wires will give a change in the market value there that the appraiser knows here at once; and, if we think the difference is 2s. and find it to be so, we add 2s. to our entry. Mi. Kasson. lou enter the goods at the market value, but you do not swear to that market value ? Ml. Bodge. The only oath that we can swear to —the only oath thev have in the Custom House-as owner of the goods is, that we swear that that IS the actual cost. As 1 have mentioned to you, my partner, Mr. Stokes, said about two years ago to the deputy collector, who asked him to swear to an invoice on the cost: “ I state to you that we advanced it in England b.s., and now, m order to be sure of the market value, \ve have added 2.s. more to the entry.” He said: “Mr. Stokes, it means nothing more than t iat. t is all light. It is quite time, gentlemen, that the oaths were changed. Ml . 1.URCHARD, If you Iiavo kiiowlcclge tli.at the actual price is higher than the invoiced price, is it not your duty under the laiv, or the duty of a mercliant, to inform the Collector and have the invoice corrected ? ’ Mr. Dodge. — We always do it. Mr, Bubciuri.,— Then it is not liable to forfeiture, is it f riistem myself personally attended the te Tf he cent., then theie is a penalty of twenty per cent, added. AN EXTRAORDINARY HISTORY, 33 Mr. Kasson. — I recollect the law as to that, but my object was to see what connection it has with the owner’s oath. Mr. Dodge. —The difficulty is the constant variation between cost and market value. Mr. Kasson. —I think the whole Committee understand the difficulty about that question. My point was to see how your oath became involved in that. Mr. Dodge. — The oath ought to be changed. I think it is the old oath of 1799. Mr. Kasson. —There was one other point, so far as your personal expla¬ nation is concerned. I have an impression from what 3^11 said that you have encountered, in the settlement you made, a member—one or more members— of Congress, who united to make a pressure upon you. Did I understand you correctly? Mr. Dodge. —I did say one or more. I did not say they had united to make a pressure. I said that the fact that they were in conclave with these men, who were interested in collecting the largest possible amount of mone}'' that they could get, went to add to the terror. Q.— You were aware of it at the time you made the settlement ? A.—Certainly. We knew that they were in town. There were no less than five attorneys constantly consulting with those men. Mr. Borchard. —Perhaps it was my want of attention which did not enable me to understand whether the invoices were made out invariably at the market or cost price. Which did the memorandum show, market or cost price ? Mr. Dodge.— The little memorandum that was sent out with those few boxes of extra tin represented the cost price from the manufacturer. Mr. Burchard. —The contract price ? Mr. Dodge.— Yes, sir. Mr. Burchard. —And the invoice represented, as I understand you, the market price ? Mr. Dodge. —The market value, as near as we could get at it. The diffi¬ culty is greatly increased from the fact that we are obliged to buy our tin, in order to supply our customers, on very large contracts, and they are coming along from week to week, some from one manufacturer and some from another. We put them in the warehouse at Liverpool, where we sometimes have 50,000 boxes piled up. We send them by steamship and have arrangements with the various lines to give them an amount of dead weight which will be satisfactory, and do not frequently know the amount they may require until within a few hours of the sailing. Mr. Buchard. —You say that sometimes the contract price was above 3 34 CONGRESS AND PHELPS, DODGE & CO. market value, as in tlie case of those that were produced and bm, u aga.nst you. an,! in other cases the contract price was belowf ® Mr. Doi,os.-I was going to say that there were fire times as manv i» b ancos, ,y actual e.Nara,nation, wlicre they wore above as where they Le Mr. Dodge — Yes, sir. it i-'* e.s|,ect.id to state the cost price distmctly, is Mr. Dodge.— It so reads. Mr. noBsaTS.-! an, speaking of the oath as it reads now. Mr. Douos.—Yes, sir; it so reads Mr. KoBsnrs.-The other states the actual value ? Mr. Dodge. — Yes, sir. destin^rsuiYr””'^,*''''''' “"y difflculty, in the case of an owner .statement tint 1 7 aalue, to combine with the owner's oath the Mr Tone 4 u ‘he oath ? to administer nn ° mlieve that a Consul would feel himseif authorized rhetr;;‘reja:l:t,'"‘'’“" "" ^y the regulations . form ofo^rtYe!, r/tim owner ? Ror"'~’ »"«>. "if- house abroTwere'the owlVrl oTthi,”tf '^'“’7"“ !" ‘'"= J'""' Was it becansp vn.i increase in valuation? to ae valu'e or I redu'cc t":! f"“‘ ““ conform to the maierprte'ln’s'tOD H culty with the appraiser. ' ^ ^ any diffi- Mr, Roberts. — Exactiv • hnf Ko foreign hou.se felt at liberty^o make tT^urr^^ "^"7 Mr. Dodge. —That was thp . with the market value ? that, probably, so far as plac/^- R^elow^'^ admitted ling, we erred ; wo should hav'e been moie correet.““" been owned^Ibroad-if vorS/'r f this had not regarded that as making anv diff oreign house—would you have -ado.pted in the .entry ? ^ ^ iff^rence in the form that you should have AN EXTRAORDINARY HISTORY. 35 Mr. Dodge. —Then we should have made the entry with the oath of the consignor of the goods, because then we should have been consigning from the house in the foreign country to the house here. Mr. Roberts. —Then I do understand you to say that the fact that you had a foreign house was really the occasion of this difference in statement? Mr. Dodge. —Well, I suppose so, sir. Mr. Roberts. —Perhaps you will be kind enough to answer this question directly. Whether the fact that you had the foreign house, which was the purchaser of this tin, made any difference in the form of the entry ? Mr. Dodge. —The distinction of the house, as I have mentioned before, led them to feel, probably, that they were authorized in that respect, being an English house, to make the change. That is what I meant to say. Mr. Roberts. —So I understand you to say ; but I desired to get it a little more particularly. May I ask what is your present impression of introducing tin in like cases, if the value is greater or less than the cost ? Mr. Dodge.— There has not been such fluctuations within the past year, but we are now in every case entering our goods at cost, and then having whatever change is made made here, in order to conform to the market, unless there should be such great variation as there has been. Then there would be no other safety for us ; we could not ship the goods to this country unless we should make the advance. Mr. Kasson.— Let me read the law : “ The party making an entry, at the time when he produces his invoice and makes entry, and not afterward, may make such addition to the cost or value given in the invoice as in his opinion shall raise the same to the actual market or wholesale price of the merchandise at the period of exportation to the United States in the prin¬ cipal market of the country where it is imported.” I understand Mr. Dodge to say that they were made out upon the other side in some cases, instead of being made out at the time of the entry. Mr. Roberts. —Yes, that is what I understood. State whether these papers, which are called duplicate invoices, were any different from the ordinary memorandum bill which would be sent from the manufacturer to the factor. Mr. Dodge. —They were the actual bills themselves, put under a copy press and pressed out, and sent in the hurry of shipment in place of making duplicates, and that is all the difference. Mr. Beck.— I wish to put to you this case. Suppose you had, from any cause, been able to purchase goods in Manchester, Liverpool or London for 10 per cent, below the market price, either because you had found a man in danger of insolvency, or fron^ any other cause, who desired to sell you goods at 10 per cent, below the market price, while all the other 36 CONGRESS AND PHELPS, DODGE & CO. merchants were buying at 10 per cent, more than, you, could you have sa ely enteied with the Con.sul those goods, thus bought at 10 per cent jelow the net market price, and brouglit them here to New York^ Mr. Dodge. — No, sir. Mr. Beck.— Why ? Mr. Dodge.—F or the simple reason that the cost price, if this was only an Isolated case, would be 10 per cent, below the market value. !' if that form of oath alone requires you to swear to the ruth, the truth would be that you had paid 10 per cent, below the market value tor them. Mr Dodge.—I f we entered them (if there was the difference of 10 per cent.) at actual cost, we should at once apprise the firm here that there vas to oe added, when it came hero, the difference to the entry, in order to make it market value Ml. Beck. Is the market value required in the oath ? odge.^ Not in the oath of the owner, Iiut in the oath of the con- o cc w len it is consigned. But when it comes over every invoice must g e ore tie appiaisei, and these appraisers receive weekly, or ought to, le prices current from all the principal markets in Europe for all the dif¬ en ai tic es they have charge of, and they have a circular, which is issued ■ D *i*^ prices of tin plate, and are supposed to have it in their hands to know the price of tin plate. r,f t your habit was, if you bought goods, say on the 1st linri ^ c clivered on the 1st day of July, in Liverpool, and the price (-ntpf nbove what you had actually purchased it at, to there ^ Consul Mr. DoDGE.-Yes, sir; that was our habit, we shfinlfl ^ if we should trace the cause of this difficulty to “"■ bo«l- if all the . der and voY®7”, - t.'adervalued ? I undeistand your clerk only exhibited the undervalues. all of them oft' ascertain he took the great proportion of a d no r®'" ;7“r “-y aetnllly the same ::t:ewYe‘ 77*:; Butwhere.hei„yLedprlce sixpence 01 so, those were very carefully taken and AN EXTRAORDINARY HISTORY. 37 preserved, and handed over to the special agent. In case-s where the in¬ voice price was above the cost they were torn off from the books, and the place where they were torn off can be shown on our invoice book. Mr. Beck. —Have you any means of showing to what they would have amounted ? Mr. Dodge. —I do not know but that we might have. I have never looked at it at all. Neither should we have had the other data excepting that our English house, as soon as they were apprised of this difficulty, immediately sent us out a statmuent which I had here this morning—the rates to which they had advanced the tin—and showing the enormous difference between that and any little difference the other way. That I have brought hero. It is at the service of the Committee. Mr. Beck. —Do I understand you to say that in the course of five years, the time for which your books were investigated, your importations were some forty millions, and duties of eight or ten millions paid, and that there was only about $6,000 of undervaluations of goods and about $1,600 of duties unpaid in all that time ? Mr. Dodge. —That is it, sir; that is the actual return. Mr. Beck. —In five years time ? Mr. Dodge. —In five years time. Mr. Waldron.— Five years preceding the 1st of January, 1873 ? Mr. Dodge.— Y'es, sir. Mr. Jayne says : “ In reply to your letter addressed to Mr. Bliss, making inquiry as to what was covered by my report in the case of Phelps, Dodge & Co., I would say that it covered all the importa¬ tions of that house for five years next preceding the 1st of January, 1873.” Mr. Wood.— Mr. Dodge, I have a few questions to put to you, and I will say, before commencing, that they are put for the purpose of eliciting in¬ formation from you, as an old importing merchant of New York, and not for the purpose of criticising your own case, or investigating it, because I do not think that this is the proper place or time to do that. I understood you to say to-day that no account was taken of the market value, either at Belfast or Liverpool, or at Penang or Singapore. What did you mean by that, that no account was taken of the market value ? Did you mean at the New York Custom House ? Mr. Dodge.— I was not aware that I made that statement. Mr. Wood. —You said no account was taken of the difference of value in goods shipped either at Belfast, Liverpool, Penang or Singapore. Mr. Dodge. —I was speaking of block tin, and I mentioned that, as a gen¬ eral thing, the markets at Singapore and Penang were identical, and that when we, for the purpose of shipping by an American vessel, sent tin over from Singapore to Penang, or vice versa, just as there might be an American 38 CONGRESS AND PHELPS, DODGE & CO. vessel loading;, as the market value was usually the same at both places, whatever it cost to carry from one place to the other was not added to the invoice. Mr. Wood.— Then the charges of transportation from Penang to Singa¬ pore were not regarded as making an increased market value at the place of exportation ? Mr. Dodge.— If they had been added wc should have paid duty on the increase. Mr. Wood. —I want to know wliat the custom or fact is? Mr. Dodge.— As to tlie fact, outside, I do not know what that- Mr. Wood (interrupting).—You spoke of Belfast. Mr. Dodge.— I simply spoke of a case that came before the Treasury for adjudication. It was on an invoice of linen at a given price, and the oath was taken before the Consul at Belfast. If for the purpose of securing a better freight, or more rapid transit, they were sent by steamer from Bel¬ fast to Liverpool, and then shipped, there was no addition to the price, be¬ cause the voyage of exportation was considered as beginning at Belfast, where the consular oath was taken. The Treasury Department ruled here, if I am not mistaken, that where the consular oath was taken there was to be no addition. Mr. Wood.— How was it in your own case, where your goods, for in¬ stance, that are made in Wales are shipped at Liverpool for New York. Ihe market value in Wales is the market value of the invoice in Liverpool? Mr. Dodge.— As I mentioned before, I suppose seven eighths of all our contracts v ith the manufacturers, for the last five or six years, have been made deliverable in Liverpool. Mr. Wood.-—A t their own expense? Mr. Dodge.— Yes, sir. Mr. Wood.— And risk? Mr. Dodge. Yes, sir. We pay so much for them delivered in Liverpool. The cost, I suppose, by coaster from Monmouthshire, is about three pence a box. Mr. Wood.— Then your invoices arc made up in Liverpool by your own house there ? Mr. Dodge. Yes, su’, always; and the only mistake that we have made; in the light of the decision of the Secretary of the Treasury, was that if, when our goods left Monmouthshire, we had gone before the Consul at Cardiff and sworn to the invoice, there would have been no doubt about it. Mr. Wood. Then your invoices are made up in Liverpool, although your goods are bought in Wales, and sent, at the cost and at the risk of the man¬ ufacturer, to you to Liverpool, the port of exportation ? AK EXTRAORDINARY HISTORY. 39 Mr. Dodge. —Yes, sir. Mr. Wood. —Y^our bills of lading are made up there. When are those bills of lading luade up ? For instance, the steamer is going to sail at three o’clock for New ITork, at what time of the day, and probably at what hour, are your bills of lading made up? Mr. Dodge.— If possible, we always get our goods on board the day be¬ fore, and then the young men are at work, as busily as possible, up to about twelve o’clock, in getting the duplicate invoices and bills of lading all ready before the hour of sailing. Mr. Wood. —Twelve o’clock of the day of sailing ? Mr. Dodge. —Yes, sir. The rule is that the oath must be taken by one o’clock. Mr. Wood. —Are not invoices made up before you receive'from the ship bills of lading ? Mr. Dodge. —I should say, as a matter of fact, they were almost always. After we find out just how many boxes are on board the bill of lading is made up and signed. Mr. Wood. —I ask for this reason, I want the gentlemen of the Committee, who probably do not know so much of these matters as you and I, to know that in making up a bill of lading at Liverpool, to go in the same steamer by mail, that is often done in advance of the sailing of the steamer, and that in no case will a bill of lading be signed until the goods are actually on board the vessel. Mr. Dodge. —That is so. Mr. Wood. —Now, may it not occur in this connection, that there may have been charges upon a bill of lading, which is an element of the cost, and that they do not reach the invoice, and are not put upon the invoice as an element of its cost ? Mr. Dodge —My own impression is that with the constant making up of the invoices all the time there are none of our young men in the office who do not know the amount of the cartage from the warehouse, and the num¬ ber of loads, from the uniform cost, day after day, of doing it. If there are so many boxes they divide it by such a number, taken by each dray,, and they have no difficulty in arriving at what is the proper amount of charges. Mr. Wood. —You stated a case here to-day in which you showed a bill of lading that had a charge of five shillings or five pounds, I forget which, which was not included in the invoice, and which was made the subject of charge against you. Mr. Dodge. —In examining the entry it was on the bill of lading. Mr. Wood. —But not on the invoice ? Mr. Dodge. —It was not on. the invoice. Our young man omitted to see the discrepancy in time. 40 CONGRESS AND PHELPS, DODGE & CO. Mr. Wood. — In Liverpool? Mr. Dodge. — He ought to liave seen it here. He ought to have seen the discrepancy between the amount added for charges and the amount that was on the bill of lading. The bill of lading was correct, but there was three and sixpence dilference between the amount on the bill of lading and the amount on the invoice. Mr. Wood. —What would be the result in the Custom House in New York, if in Liverpool, as well as in New York, some charges put upon the bill of lading in Liverpool had l)cen omitted in the invoice; what would have been the result if, in consecjuence of that omission, the goods had been seized? Mr. Dodge. — That depends entirely, I suppose, upon the final decision as to intent. Mr. Wood. — It would be subject, under the law, to seizure ? Mr. Dodge. — Certainly, sir. Mr. Wood. —If that omission was twenty-five cents, the principle would apply as much as if it was a million dollars ? Mr. Dodge.^ —I do not know that the law makes any dilference. It would make a difference, probably, in judging of the equities of the case and the probabilities of fraud. Mr. Wood. — -You spoke this evening in favor of specific instead of ad val¬ orem duties. Did we understand you that that applied simply to the goods you imported or to the system ? Mr. Dodge. — It applied to everything where it could be done — every case which will prevent a fraud. Mr. Wood.— You, as a merchant of experience, give that as your opinion? Mr. Dodge.-— I have not a doubt about it. Mr. Wood.— Why do you prefer that system ? Mr. Dodge. —Because you do away with this perplexing question of cost and market value, and there will be no difficulty in making your invoices at cost at once. It gets rid of the whole difficmlty of charges and ever}-- thing else. Mr. Wood. And you are in favor of it as a general system ? Of course it could not be applicable to everything. Mr. Dodge. Of course not ; but so far as it can be done it would simplify the whole thing, and the business of the Custom House. It would relieve the merchant from a great anxiety. There is no pleasure in doing business now, and there has not been for years. Mr. AV ooD. Did you examine the English system while you were abroad? Mr. Dodge. —I did not. Mr. Wood. Have you ever given any reflection, or have the old mer- AN EXTRAORDINAEY HISTORY. 41 chants of New York ever given any reflection to the proposition of levying these duties, so far as we can, upon American values in place of foreign values ? Mr. Dodge. —There has been a great deal said about it ; but I think there is more difficulty in ascertaining what is the real American value of foreign products than the market value of the same goods in the country from Avhich they are shipped. Mr. Wood. —You have come to no conclusion yourself? Mr. Dodge. —My own impression is that there would be very great diffi¬ cult}^ in a home valuation. For instance, take the price of iron in Great Britain. It is regulated by an association, and has been for the past five and twenty years. That association meets every quarter, and they fix a price, and that price is the uniform price. Of course there is a variation, but that is the general understanding. If a man should order five hundred tons of iron at quarter day, he would expect to pay the price at quarter day, and that would be called the market price. Mr. Wood.— The goods that you import are of a staple character gene¬ rally, are they not ? Mr. Dodge.— There are certain sizes of tin plate that are, but, as I men¬ tioned to-day, there have sprung up within the past few years very large manufactories in this country of articles made from all sizes of tin plate ; consequently they have to bo ordered si)ecitically for the manufacturer according to his business. You cannot go into the market and buy them. There is no way but to order them. Mr Wood. —I wish to ask your opinion also upon another very impor¬ tant question. We have a system in New York, extensively carried on of late years, of allowing the merchants to have their own bonded warehouses, where goods arc bonded and kept in possession of the merchant, he giving bonds, of course, to the Government in the proper penalties for violation of his obligations, but yet the}^ are private bonded warehouses. What is your idea of that system ? Mr. Dodge. —My impression is that it is open to risk. Mr. Wood. —You think it is liable to very great abuse ? Mr. Dodge. —-I think there is more opportunity for it—a great deal. Mr. AVood. —Did you ever hear it discussed among the merchants ? Mr. Dodge.—0, yes ; very often, Mr. Wood.— With reference to the machinery of the Custom House do you not think that it might be very materially simplified, and a large num¬ ber of the force employed done away with ? Mr. Dodge.— Do you mean as the laws now exist, or under better laws and specific duties ? 42 CONGRESS AND PHELPS, DODGE & CO. Mr. Wood. — I should like your opinion as to the existing law, and also as to the changes, and what could be effected by them. Mr. Dodge.— I was under examination by a Committee at the Custom House some years ago, and I tried to give a very honest description of what I thought was the then state of the Custom House, and my own im¬ pression is that those who cluster around the Custom House have never thanked me for it, to say the least. If I should give any opinion about it, it would be exactly what I gave then, only a little more so. Mr. Wood. — What is your opinion with reference to the system of moie¬ ties ? Mr. Dodge. — Well, sir, I cannot conceive it possible that such a system can continue in a country like ours, and under the present arrangement, where special officers are empowered to act as spies and detectives, and to use such means as they think right and proper to secure their own ends. I cannot see that it is possible for a regular merchant to continue his busi¬ ness with any safety, for this reason, that the inducement on the part of the special agents to entrap him is so great. These men are perhaps desirous to do no wrong, but still they are very anxious to secure their large moieties. They feel that they have a rich placer and they want to dig while it is in their power. There is great danger of their assuming that there has been fraud where there never had been. Thus, the very taking of the books and papers of a merchant who has maintained an honorable standing, and whose reputation and credit depend upon his moral integrity as well as his capital, and the holding that man up to the country as having defrauded the Government, and assuming that he is guilty until he has an opportunity to prove his innocence, may ruin him His credit is gone, his capital is gone ; he has .spent his life in building up a reputation that the Government has stricken down bv reason of a mis¬ take made by a detective. No American merchant wilf submit to it or live under it. Mr. Wood. Do ymu not think, upon the other hand, that the allowance of an additional inducement to a proper, vigilant and experienced man, would be an advantage to the revenue ? Mr. DoDGE.~It might possibly be an advantage to the revenue directly; indirectly, an utter loss of confidence on the part of the merchant. If proper confidence cannot exist between the mercantile community and the Government there will be no such thing as a revenue, except what may be acquired from foreigners. I do not wish to be misunderstood. The Gov¬ ernment should have carefully prepared laws, and it should pav a salarv to men sufficient to induce them to do their duty. It should hav“e intelligent men, men of high character and standing in the Custom House, not having AN EXTKAOllDINART HISTORY. 43 a Custom House simply and solely for the purpose of making places for men who know nothing about business, and have never had a particle of business experience. Mr. Wood. —Could you suggest any improvement in the law with refer¬ ence to seizures of books and papers ? Mr. Dodge. —-I could suggest but one, and that is the entire abrogation. It does not belong to a highly intelligent people. It is a remnant of the dark ages and belongs to them, and not to us. Mr. Wood. —-Could you suggest anything with reference to the confisca¬ tion of an entire invoice by tlie fraudulent violation, so to speak, if you please, of one component article of the invoice ? Mr. Dodge. —The gentlemen, I believe, of the legal profession, believe that the penalty should bear some proportion to the crime. I had invoices to-day here, where, under the law, they would be confiscated for between $20,000 and $30,000 for a mistake of $20. Outside of customs matters there is no law upon the statute books that knows any such thing. Mr. Niblack.— I understand you to say that with a specific duty all this difficulty about the Custom House oath, even in its present form, would be relieved ? Mr. Dodge. —Tliat is, only so far as it is possible to have specific duties extend. Mr. Niblack.— I mean as regards your trade. Mr. Dodge. —Yes, sir. Mr. Niblack.— If one cent a pound was assessed upon tin plate, you would then have no difficulty in regard to customs ? Mr. Dodge. —Of course there must be the necessary cliecks to see that the proper quantity is received and the proper weight given. There is no difiSculty about that. Mr. Niblack.-— Yes, sir; but there would be no difficulty about the cost price and the market price ? Mr. Dodge.— Not at all, Mr. Waldbon.— I understood you to say that if the value had increased from the time of the shipment of the tin in Liverpool until its arrival in New York, the increase in value was to be added in making the entry here for the purpose of assessing the duty? Mr. Dodge. —That is the uniform rule with our Custom House in New York. Mr. WALDRON.—Suppose there had been a decline in the value from the time of the shipment until its arrival ? Mr. Dodge. —Then no change is made. The law does not know that. Mr. Waldron.—You spoke about having paid $56,000 on single importa- 44 CONGRESS ANT) PHELPS, DODGE & CO. tions o\^er and above what was the fair duty to have been paid the Gov¬ ernment. Eow did that arise ? ’ Air. Dodge.— I think I stated that it was $58,000 on a single contract with one manufacturer—not in a single invoice. We never had^an invoice as large as that. Mr. AValdron.— Did that arise from the fact that the market value was below the contract price ? Mr. Dodge.— No; the contract price was a great deal below, and we added to it to make it equal to market value. Tin plates that cost 3’^s. 6d were invoiced at 40, v. Ihe Chair.uan. In speaking of the one cent a pound duty upon tin, which IS the duty you suggested, I understood you to say that it should embrace the weight of the boxes also, and then it would yield, in your judgment, an increase of the revenue ? Mr. Dodge. — Yes, sir. The Chairman.— AA^ould you say one cent a pound for the boxes, too? Ml. Dodge. In order to bring it up to that. If we simply took the weight of the tin it might come below the jirescnt duty. It was found, rom a caieful calculation, that by adding the weight of the box it would make between five and six hundred thousand dollars more. I think in the case of last yeai, tabulating the different sizes and taking their weights (because every box is known by its weight), and adding them up, which was c one with a gieat deal of care, it would have made the duties last year between five and six hundred dollars more. The Chairman,— Some five years ago, as a member of the Committee of ays ai^ Means, we were holding an investigation at the New York Custom House. The then Collector, Mr. Grinnell, said to us: “Gentlemen, you mus remember that the entire legal ability of Great Britain and the 1 question as to how it may evade our custom rint n view of that suggestion I put this question: AYhether such a duty wou d no probably lead to a reduction in the weight of the boxes; as L. Z nf Tl'" reducing the weight of the boxes as to aflect the revenue ? « o “I ^ say that the bo.«t .re of transnoio \ ® ‘''am now, in order to save the cost frana if the ho.os lerjrir.jiT;™:;:!:: AN EXTRAORDINARY HISTORY. 45 the convenience of estimating the duties if the weight of the boxes were not included. Mr. Dodge.— It would probably be better to have them without the boxes, because the actual cost is on the weight of the tin itself and not the box. But w'^e found in adding up and going through the investigation, that if wm simply took the weight of the tin itself at a cent a pound, it might fall short of the present duty, whereas, adding the box it made five or six hundred thousand dollars more. I made one mistake this morning, Mr. Chairman, wdiieh, with your per¬ mission, 1 will ask the stenographer to correct. One of my friends, after I left the committee room, informed me that Iliad stated that our total impor¬ tations for the forty years were between four and five hundred millions. I should have said between three and four hundred millions, and that the duties Avere fifty millions. I have not tabulated it, but we made an esti¬ mate of our regular importations and the regular duty, and I figured it up this morning as amounting to just about that. I annex herewdth copies of four invoices and memoranda, called by the Custom House officers fraudulent and duplicate invoices, marked respect¬ ively A and B, C and D, E and P, G and H. The first is an invoice by the Calabria, dated October ii3, ISll, for £4,073 3s. &d., marked A, and the memorandum, with the copies of two bills, marked B and Bh The first of these shows that three items, desig¬ nated by a *, and included both in the invoice and memorandum, are invoiced at £47, and entered in the memoranda at £47 15s. Id., an alleged under¬ valuation of 15s. \d. The second, Bh shows that one item, §, invoiced at £20 14s. should have been entered £21 5s., an undervaluation of 11s. The second, an invoice per City of Antwerp, dated October 9, 1871, for £5,114 19s., marked C; and memorandum, wdth copies of three bills, marked D and D^ I)^ The first of these shows that five items, *, are in¬ cluded in both invoice C and memorandum D; that four of the items are entered at the same price in invoice and memoranda. The other, desig¬ nated by a §, is invoiced at £96 16s., and entered in the memorandum at £102 18s., an undervaluation of £6 2s. Another memorandum, D“, shows three items marked f, included in both the invoice and memoranda, in¬ voiced at £43 15s., entered in the memorandum at £45 11s. 10(i., an under¬ valuation of £1 16s. lOrf. The third, an invoice per Calabria, November 27, 1871, for £4,007 10s. 6(7., marked E and memorandum F; seven items, designated by a *, are included in both the invoice and memorandum, and are entered at the same price in each. The original memorandum or duplicate invoice, equally fraudulent with the other, was examined by Mr. Jayne, and bears at the bottom the word and initials, “ Correct, B. G. J.,” in his handwriting. 46 CONGRESS AND PHELPS, DODGE & CO. The fourth, an invoice per Algeria, March 15, 1812, for £1,322 5s. 6(? marked G and memorandum H; the three items designated by a in- eluded in both invoice and memorandum, invoiced at £271 18s., are entered in the memorandum at £210 13s. M., an overvaluation of £1 4s. lOd The four invoices contain one hundred and eighty-six items, with nine¬ teen items common to both invoice and memoranda ; nine are invoiced below memorandum price, seven at the same price in each, and three are invoiced above the memorandum price. The total amount of the two invoices in which there are undervaluations is £9,188, or $46,000 gold. These undervaluations amount to £9 4s. lid., or $46.50 gold. The duties on the amount of undervaluation were about $9.20, and for these alleged fraudulent undervaluations of one fifth of one per cent, on the amount of the two invoices they were forfeited to the Government. These four invoices were taken at random, without selection, and are, I believe, fair samples of the whole. A..—Invoice of tm plates shipped on board the steamship Calabria, Captain McMicIen for New York, by order and on account and risk of Messrs. Phelps, Dodge & Co., New I ork. Poutymlstor (P., D. & Co.; Pontymister (L. & Co.).. ‘ Radnor (P., D. & Co.).. Sandon (P., D. &Co.).. S. C. C. (P., D. & Co.).. 2,496 boxes tin plate : 5, !C, 28s. 70, IX, 33.H. 10, IXW, 30s. 15, IXX, 38s. 34, 100 sheets, DXX, 33s. 5, 225 sheets, 16 x 16, IX. OOs.... 1, 225 sheets, 16 x 16, IXVV, 558.. 11, 225 sheets, 18x18, IX, 769.... 4, 225 sheets, 18 x 18, JXW, 70s.. 25, 112 sheets, 14 x 20, lu, 28s- 10, 14 X 20, IX, 333. 90, 14x20, IXX, 378. - 20, IXXX, 42s. !0 X 28, 1 , 563.. 75, Terne, lU, 25s.. 5, Terne, IX, 30s. 6, Terue, 20 x 28, IC, 60s. . . 20,' Terne, 20 x 28, IX, OOs 1, D7X, 603. 96, D5X, 50S. 79, D4X, 4.5s. 21, IXXXX, 439.. ^■3, 31 x44, IXXXX, 100s. *2, 381 X 274, IXXXX, 1203.. *1, 654 X 2.5,- IXXXX, 2203. . .. 430, IC, 26s 6d.... 42, ICW, 248 6d.. 177, IX, 31s 6d.... 15, IXW, 28s 6d.. Discount for cash.. Charges, cartage, porterage, &c.. 7 0 0 115 10 0 15 0 0 28 10 0 56 2 0 15 0 0 2 15 0 41 10 0 14 0 0 35 0 0 Discount for cash.. Charges, cartage, porterage, &o.. 154 6 9 3,702 15 9 Commission, 24 per cent.. 3,973 16 6 99 7 0 4,073 3 6 (E. E.) Livebpooi., October 23, 1871. PHELPS, JAMES & CO. B.— Cojjij of John Knight & Go's invoice, dated October 17, 1871, , 44 x 31, XXXX. 50s... 44 x 31, XXXX. 503... , 45x31, X.XXX, 533... .. 381 X 271, XXXX, 51 h. ,, 381 X 271, XXXX. 52-. , 651 x25r XXXX ^Js 0 = Pap’ored. Six boxes, weighing 1 ton 4 hundred weight 3 pounds, at 39s. 9d. 445 pounds, 446 pounds. 473 pounds, 343 pounds. 352 pounds. 632 pounds, 2,691 £47 153. Id,* B'.— Cojiy of E. P. & W. Baldwin's invoice. October 9, 1871. WUden (G. E.). 18 boxes B. B. sheets, colored, rolled and annealed, 17 x 12x29, 23 cwt. ' qr. 1 lb., at 178. Cd. Tin cases. Is . Delivered in Liverpool. Discount, 3 per cent, for cash. Arr. per Calabria, October 23, 1871. £ s. 20 7 0 18 21~5§ c. CITY OF ANTWERP, S. S. Invoice of goods shipped on hoard the steamship City of Antwerp, Captain Eynon, for New York, order and an account and risk of 2kssrs. Phelps, Dodge & Co., New York. Pontymister, (P. D. k Co.) 2,430 boxes tin plates: 48, IC, 28s.. 50, IX. 33s. 9, IXXX. 47s. 13, lUO sheets. DXX. 33s... 11. 100 sheets, DXXX, 383 . 20. 14 X 20. IX. 33a.. 6, 20 X 28, I U, .5Gs. 40, 225 sheets, 13 x 13, IX, 388. 7, 226 sheets, 13 x 13, XW, 35s. 17, 225 sheets, 18 xl8, IX, 76.3. 2, 225 sheets, 18 xl8. XW', 70s. 260, 'i'eme, IC, 25s. 5, Terue, IX, 30s. 488 13, 112 sheets, 13 x 13, IXXXX 29-s. 2, 112 sheets, 13 x 13, IXXXXW. 25s. 6d 13, 112 sheets, 14 x 14, IXXXX. 34s. 3d.. 3, 112 sheets, 14 x 14, lX.XXXW. 30s. 3d 11. 112 sheets, 17 x 17, IXX.XX 51s 2. 112 sheets, 17 x 17, IXXXXW 1 js.'. ’.. 13, 112 sheets. 18 xl8, IXXXX 57- .. 2, 112 sheets, 18 x 18, IXXXXW ’’O i. 3d. £ s. d. 67 4 0 82 10 0 21 9 0 20 18 0 33 0 0 16 16 0 76 0 0 12 5 0 64 12 0 7 0 0 325 0 0 7 10 0 18 17 0 2 11 0 22 5 3 4 in 9 28 1 0 4 10 0 5 0 6 Do.^ ... Do. .(L. &G.). Carnarvon, (N. E. J.). 4, 112 sheets, 11^ x 11^. IXXXXX, 278. 6d 112 sheets, 54s. 9d, for 225 sheets.. . 3, 112 sheets. 111' xlll4, IXXX.X.XW, 24s. lor 112 .-lieets, 48s. Od. for 225 sheets 4, 112 slieets, 13 x 13, IXXXXX, S'^s 2, 112 sheets, 13 x 13, IXXXXXW, 28s.’6d.' 9, 112 sheets. 14 x 14, IXXXXX, 37s. 9d t, 112 sheets. 16 x 16, IXXXXX, 40s. ... 4, 112 sheets, 16 x 16, IXXXXXW, 43s. 9d. 7 15 0* 6 16 0§ 8 15 0=* 18, 11 x 11, IXX.XX, 498. 94. DXXX, 40s. . 30, DXXXX, 4,5s. . 16, DXXXXX, 60s.’.. 44 2 0 188 0 0 67 10 0 40 0 0 63, 10 x20, IC, 38s,.. 6, 10x20. ICW, 36 e. 59 100 14 0 10 16 0 Powys, [P , D. Co.). S. B,, (P.. D. & Co.).., 27, 112 sheets, 20 x 28, IX, G7s. 33, 225 sheets, 18 x 18, IX, 708. 92, 225 sheets, 13 x 13, IX, 398.. 152 5, 112 sheets, 20 x 28, IX, (Wasters) COs. 3, 225 sheets, 18 x 18, IX, (Wasters) 70s. 6, 225 sheets, 13 x 13, IX, (Wasters) 353. 15 10 10 0 0 10 0 10 0 Llaufair ^. Do .(P., D. & Co. owarcl .. Do_(P.. D. & Co.).. Biite....(P., D. & Co.)... C. F., ;P., D. k Co.). Cymro, (P., D. Co.). Cum-du, (P., D. & Co.)... Pontymister. (P., D. & Co.) Do_(J. D. & Co.), 11, coke, 9 X 18, IC, 225 sheets, 29s. Od. 17, coke, ICW, 22s. 6d. 31, coke, i4 x20, 1C, 24s. 6d. 6, coke, 14 X 20, ICW, 22s. 6d. 54 lOU, coke, 11 x22, IC, 225 sheets, 43s. 9d. 107, coke, 9>i xl9, IC, 225 sheets, 32a. 9d. 60, coke, 10 X 20, IC, 226 sheets, 36s. 3d. 203 29, coke, 14 x 22, IC, 27s . 1, coke, 14 X 22, lew, 32^...]... 30 7, coke, 14 X 22, IC, 26s. 354, coke, 11x11, 10,20.3. 6d. 15, coke, 14 X 20, 1C, 23s. 6d. -1, coke, 14 X 20, IX, 28s. 6d. 370 300 , coke, 14x20, IC, 233. 6d. 40, coke, IC, 23a. 6, coke, lew, 21s. 0, coke, 12 X 12, IC, 23s.‘ | ! 12, coke, 12 X 12, IC W, 218. .. 130, coke, 14x20, 1C, 238. 60 . No. 38, 112 pouQds B. T., 450 sheets, 228. tIO, No. 30, 18x24, B. T., 17s. 6d . tl5. No. 33, 12 X 17, B. T., 178. 6d.! ' ' t25, No. 33, 14 X 20, B. T., 178. 6d.!. . . 50 Discouut for cash. Charges, cartage, porterage, etc . 0 ingots common Eagiish tin (T. B. & Co.). Cwt. Qrs. Lbs. 200 ingots 28 pounds each. 50 2 3 100 ingots 56pounds each.50 3 9 300 Discount for cash.. 66 0 I 8 15 i 13 2 I 21 17 I 3,692 16 I 147 14 ; 4,990 121 1 5,114 1 Freight ou 1555^ tons, at ‘iOs. Fer cent, piimagb. . i s. i 165 15 t) V 15 9 raiH (E. F.) Livekpool, Oclober 9, 1871. PliELP,S, JA3IES&C0. It. *44 boxes Pontymlster, 112 sheel'', l;i x 13 XXXXX liii plates 32- * 2 boxes charcoal, 112 sheet, 13 x 13 X.X.XXX tin plates, 'iS-. lid •2U boxes charcoal, 112 sheets, 14x14 XXXXX tin plates. 37s 9ci §42 boxes charcoal, 112 sheets. 111 x Hi XXXXX tin plates, 49- * 4 boxes charcoal, 112 sheets, 10 x 10 XXXXX tin plate-, 43-. 9d 112 Discount on £222 138., at 3 per cent. 0 13 0 Discount on £222 138., at 1 Per ( ent . . 2 4 0 -8 18 I) Per City of Antwerp, October 9, 1871. Corrected invoice, Messrs, Phelps, James 3: Co,, October 4. 1871. Pontymister, 112 sheets, lljj x 11 ‘^ XXX.XX tin plates, 27s. 6d,. :8 charcoal, 112 sheets. 111, x if ', XXXXXW tin plates. 2 boxes charcoal, 112 sheets, 10 x 10 XXXXX tin plates, 4da , . .• 19 I 1 nvfs slK-ets, B. T. 30, 24 x 18. 14cwi. Iqr. 24Ibs., 18.«. 18 6 4t t 15 boxes chare,al, 11‘2 bheet!-, B. T. a3, 17 X 12 9 9 If5 nu «fi m m nt t 25 boxes charcoal.112 sheets, B.T. 33^ 0 23 Ws’. Od::;;:: 20 13 Ot ^ J. D. & Co., 50 tm cases. Is . .^10 U 50 - Discount on £114 138 4d , at 3 per cent . 3 89 9 Discount on £114 I3s. 4d., at 1 per cent .. 1 2 11 City of Antwerp, Liverpool, October 0, 1871. o. a. ,,oard the steamship Calabria, Captain McMkken, for New York, by orde, and on account and risk of Messrs. Phelps, Dodge & Co., New York. Pontymister (P., D. & Co.) tin plates : x20, IG, 28s.. II. IX, 338. 74, 14 X 20, IXX, 37s 6. 20 x28, IX, 66s. 17, 12 X 12, IXX, 38s 2, 12 X 12, IXXW, 3,- 30, ino sheets, DXX 5, 200 sheet,-, SDXX 54, 19x 19, IXX, 6Us 11, 19x19, IXXW, 46s 210, Terne, IC, 26s., £ s. d. 35 0 0 8 5 0 136 18 0 10 10 0 3 10 0 49 10 u 13 16 0 135 0 0 26 6 0 273 0 0 Pontymister (E. S. & Co.) * 4, 112 sheets 14x14, IXXXXXX, 41s. 6d. *10, 112 sheets 16x16, IXXXXXX, 63s. 6d.... * 1, 112 sheets 16 x 16, IXXXXXXW, 488. 3d... * 7, 112 sheets 18x18, IXXXXXX. 69s. * 1, 112 sheets 18 xl8, IXXXXXXW, 02s. 3d... * 9, 112 sheets 21 xl6, IXXXX. 65s. * 1, 112 sheets 21x16, IXXXXW, 48s. 6d. £ S.d. 8 6 0* 26 16 0* 2 8 3* 24 3 0* 3 2 3f 24 15 0* 2 8 0* Do....(L. & G.).. 68, DXXXXX, 60s. 37, DXXXX, 45s.. 55, DXXX. 40s.... 18, IXXXX, 60s... M. F. (P.,D. & Co.).... Sandon (P., D. A: Co.).. Teoby. Harold (P.,n. & Co.). Taflf. 168 800, Terne, IC, 278. 50, IC, 26s. 100, 14 x20, IC, 26s. 25, 12x12, IX, 318. m 100, coke, IC, 26s. 280 coke, 10x20, IC, 35s.., 22 coke, 10x20, CW, 32s. 302 1,080 0 0 65 0 0 130 0 0 38 16 0 130 0 0 490 0 0 m, coke, 10x20, 1C, 35s. m, coke, 10x20, IC, 33 b. Discount for cash. Charges, cartage, porterage, 472 10 0 198 0 0 5,852 12 0 164 2 0 £ s. d. ,698 10 0 23 14 6 23 casks old ccrap lead (Sparrow) Cwt. Qrs. Lbs. 230 0 3 gross. 11 2 27 tare. 218 1 4 Discount. £17 12 6.. 187 11 0 (F. O. B.). Commission, 2>4 per cent. 4;007 10 (E. E.) Livebpool, November 27, 1871. Freight on 158 tons at 203. Primage. PHELPS, JAMES & CO. . 7 18 I 165 18 I F. Messrs. Phelps, James & Co., Liverpool, November 22, 1871. £ s. d. * 4 boxes Pontymister, Il2 sheets, 14 x 16 XXXXXX tin plates, 418, 6d. 8 6 0* *10 boxes Poutymister, 112 sheets, 16 x 16 XXXXXX tin plates, 533 6d. 26 16 0* * 1 bO}i Pontymister, 112 sheets, 16 X 16 XXXXXXW tin plates, 48s. 3d. 2 8 3* * 7 boxes Pontymister, 112 sheets, 18 X18 XXXXXX tin plates, 69.S.. ..'. , 24 3 0* * 1 box Pontymister, 112 sheets, 18 x 18 XXXXXXW tin plates, 62s. 3d. 3 2 3* * 9 boxes Poutymister, 112 sheets, 21 xl5 XXXX tin plates, 55s.. . 24 15 0* * 1 box Pontymister, 112 sheets, 21 xl6 XXXXW tin plates, 48s. 6d. , 2 8 6* £ s. d 33 R. S. & Co.*8 October 28. Discount on £91 18s., at 3 per cent. 2 15 2 Discount on £91 188., at 1 per cent. 18 4 13 6 Per Calabria, November 25. Correct, P. G. J. G. Invoice of goods shipped on hoard the steamship Algeria, Capt. Le Messurier, for New York by order and on account and risk of Messrs. Phelps, Dodge & Go., New York. ' De,m (P., 1). & Co.).. Powys (P., D. & Co.).. S. B. (P., D. & Co.). Sandon (P., D. & Co.),. B. C. N. fP., D. & Co.).. 4,220 boxes tin plates ; S30, 1C, 33s . 46, low, 318. 8B. IX, 398. 17, IXW, 36s. 65, 14 x20, IC. 338.... 81, 14x20, IX. 388 ... 112, 12x12, IX. 388 _ 9, 12 X 12, IXVV. 35s.. 7 ^ 20, IC, 33s. 12, IX, 38s . 11, 12x12, IX, 38s.... 10, 11x11, IC, 298.... 53, 11 xll, IX, 343. 2, 13 xl3, IX, 428. 3, 12x12, IX, 3.58_ 3, 11 X 11, 1C. 278. 8, 11x11, IX. 328. 2, 13 X 13, IX, 39s. _16 468, ICW, 31s . 94, IXW, 368....; . 40, 14 X 20, IXW, 36s.. 602 *21, D8X, 180s . * 9, D6X, 154s . * 4, D3X, 688. 34 300. IC, 31s __ 15, ICW, 29s _ 150, IX. 36s . 15, IXW, 338. 200, 14 X 20, IX. 36s 6, 14 X 20, IXVV, 33s . . 685 544 10 0 71 6 0 171 12 0 30 12 0 107 5 0 153 18 0 212 0 0 15 15 0 22 16 0 20 18 0 14 10 0 5 5 0 4 10 12 16 0 21 15 0 270 0 0 24 15 0 Bangor (P , D. & Co.). T. D. (coke) 86, coke, IC, 298. 6d. 30, coke, 10 X 20, IC, 428. 6d. m 6, coke, IX, 338_ 2, coke, IXX, 38s_ 3, coke, IXXX, 438_ 3, coke, 13 X 13, 10, 31s 4, coke, DXXX, 40s 126 63 17 0 15 0 9 3 6 18 16 13 0 0 0 0 0 0 A. C. (P., P. & Co.). 200, coke, 10 X 20, IC, 43s. 20, coke, 10 X 20, IC, 40s. 220 35 , coke, 10 X 20, 10, 413. 430 0 0 40 0 0 71 16 0 L, F. (P., D. & Co.). B. Y. (P., D. &Co.). 35, coke, IC. 29s. 6d. 376, coke, 14 x 20, IC, 29s. 6d.. 72, coke, 14 x 20, CW, 273. 6d. £ s. d. 51 12 6 654 12 0 99 0 0 C. F. (P., D. & Co.).. 483 300, coke, 14 x 20, IC, 29s. 6d. 36, coke, 14 x 20, CW, 27 b. 6 d. 442 49 10 0 10 0 (rlantawe (P., D. & Co.)... Cyuon(P., D. & Co.). Penlan (P.,D.&Co.). W. (P., D. & Co.).. W. (P., D. & Co.). 3.5, coke, IC, 298. 224, coke, 14x20, IC, 298.... 16. coke, 14x20, CW, 27s.. Discount for cash.. Charges, cartage, porterage, etc 13 bundles 13 bundles 12 bundles 12 bundles 12 bundles 12 bundles 13 bundles 13 bundles 17 bundles 17 bundles 17 bundles 17 bundles 25 bundles 25 bundles 25 bundles 25 bundles 25 bundles 25 bundles 25 bundles 25 bundles sheet iron, 84 x 24 x sheet iron, 84 x 26 x sheet iron, 84 x 28 x sheet iron, 84 x 30 x sheet iron, 84 x 24 > sheet iron, 84 x 25 x sheet iron, 84 x 28 x sheet iron, 84 x 30 > sheet iron, 84 x 24 x sheet iron, 84 x 26 x sheet iron, 84x 28x sheet iron, 84 x 30 x sheet iron, 84x24 x sheet iron, 84x26 x sheet iron, 84 x 28 x sheet non, 84 x 30 x sheet iron, 84 x 24 x sheet iron, 84 x 26 x sheet iron, 84 x 28 x sheet Iron, 84 x 30 > 368 Tons, cwt. lbs. = 20 6 12 at £8 16. 33 bundles, 84 x 24, No. 22. 50 bundles, 84 x 24, No. 23. 200 bundle..!, 84 x24. No. 24. Weighing 14 tons, 7 cwt., 1 qr., 13 lbs., at £10 6s. Discount. Charges, cartage, etc Commission 2K per 60 16 0 324 10 0 21 12 0 tE. E.) Liverpool, Jl/aicfil5, 1872. PHELPS. JAMES & CO. B. L. £, ,•!_ (?. Freight on 260^ tons, at 20s. 260 15 0 Primage. 26 10 286 16 Bradley, B. & Co., 34 H. ALGERIA S. 8. Mabck 15, cases tin plates; *21, 4U xl9 X 18, G. *9, 4ll X I9x 20, G. *i, 25| X 9x23, G. 34 We invoiced 21 boxes, at ISOs 9 boxes, at 1,54s 4 boxes, at (58s., Cujts. qrs. lbs. Sheets. 1 11 . 1070 * -• 39 2 5. 530* •• 7 3 2. 601* 154 2 18, at 35s., delivered in Liverpool.. .270 I3 Deoembeb 26. 271 18 0 Tabular slatement derived from the forerjaing invoices and memoranda. Invoices. 1 H Invoice price of items in invoice and memoranda. Memoranda price of items in in- ' voice and memo- ' rauda. Under valuation. _ Total duties paid. liz $20,365 00 25,570 00 20,035 00 36,611 00 $235 00 1,301 25 468 50 1,359 50 $238 75 1,341 00 458 50 1,353 25 $6 50 39 75 $4,073 00 4,114 00 4,007 CO 7,322 00 $180 7 9i — -- $102,681 00 $3,354 25 j $3,391 60 j $46 25 $19,516 00 9 24 AN EXTRAORDINARY HISTORY. 55 CROSS-EXAMINATION AND REHEARING BEFORE THE COMMIT¬ TEE OF B. G. JAYNE. The heaving of the representatives of the several Boards of Trade and Chambers of Commerce, and also of individual merchants before the Com¬ mittee, having been concluded on the 10th of March, B. G. Jayne was re¬ called and resumed his statement. F;’om the official report of this state¬ ment and the accompanying examination of Jayne by the Committee, are derived the following extracts relative to the case of Phelps, Dodge & Co. : Mr. Roberts. —Have you taken, in any case, any books or papers other than those bearing directly upon the charges made, and of which notice had been given ? Mr. Jayne.— It has been the intention, sir, in every case to confine our¬ selves strictly to books of that kind. We have been very careful in every case to take none but the commercial books of the house. It is very diffi¬ cult to tell whether a book relates to a particular importation. Mr. Roberts.— So that, in fact, then, you have taken other books than those bearing on the case ? Mr. Jayne.— We have found that some books that we have taken did not have the entries in pertaining to the importations. That is true. It has not been the intention, however. Mr. Roberts.— What use have you ever made of any books or papers, including entries, other than those bearing on the particular case? Mr. Jayne.— Where I have found entries upon the same pages of the books, and part of the same general transaction, we have frequently in¬ cluded them for recovery. We have used nothing except it came from the book which had the account of the importations in it to which the warrant referred. Mr. Roberts. —Do you say, then, you have not made any use of anv other papers ? Mr. Jayne.— I think not, sir. Mr. Roberts.— Have you in any case forced a settlement, or attempted to do so, by any other inference than the recital of the penalties of the law ? Mr. Jayne.— No, sir ; never. Note.— As pertinent to this latter testimony of Jayne, and as illustrative of the character of the individual to whom the administration of Custom House law, in an important department in this great City of New York was for some years entrusted, attention is here asked to a portion of the speech 56 CONGRESS AND PHELPS, DODGE & CO. before the Committee of Ways and Means, during the hearing in oup^tinn by Charles Brainerd, Esq., of New York. ^ After detailing the working of the customs laws in respect to certain cases, in which, as counsel, he had defended and justified certain import¬ ing houses in New York City, and in which the agency of arbitrary t^t- ment and “terrorism” had been very systematically resorted to Mr Brainerd continued : ^ I think I have now exhibited the system precisely as it is. James Otis described the practice with surprising accuracy. Let me read his description : ‘“Custom House officials may enter our houses when they please- we are commanded to permit their entry. Their menial servants may enter; may break locks, bars and everything in their way; and whether they break through malice or revenge, no man, no court can inquire. Bare sus¬ picion without oath is sufficient.’ The desciiption fails in but one thing. Then bare suspicion without the oath that you are suspicious is sufficient. Now bare suspicion with the oath that you are suspicious is quite enough. f examined before the Senate Committee 1 New York. I ask this Committee, whose members lave exhibited such an interest in this matter, to read what he says about ., to lemember where he makes them, and in what connection ; to -ac a^ain caiefully the familiar testimony that he gave in the presence of gentlemen who were then protecting the system.” ¥vom this sworn evidence let a portrait of a special agent be drawn, ihp bV, famous handcuff story, as cautiously related by 1 H ®“‘’ »ttentivelv to noto the chao imnloant* ‘"7"''® Tl.e'y are curious and uDon worrt^^^ s lowing by f heir omissions and equivocations, and their play nddcl.Tt s . ""■) tl'« sinister niodcLy whicli It IS actually carried on fc 1V4 221, 42d 2d VoUI, p. 524-5. ered hy you a leo-itimato^tpif|ia'idcuffs, or the threat of handcuffs, is that consid- merchants’ books and papers ° «Pon which to base the seizure of them down w remind thim that Uiey hoU'et""''’ acted upon tL fears of men^hTLmuell^ Committee further the extent to which you have prosecute your suits ?^A Those hale ^ has been guilty of doing wrong generally AN EXTRAOKDINARY HISTORY. 67 *• Q. Now, tell us the man who you were interrogating and seeking to terrify, at the time you had this unexpected aid from the authority of the marshal, with the pair of handculTs.— A. I think there was no one at that time in my office. I don’t think they were left there for that purpose at all. " Q. Did you not state that yon had a man under examination, and tliat some one came in and put down a pair of handcuffs beside him without saying any tiling, or without your ordering it ?—A. I didn’t say that. I said such a case might have occurred. “Q. What made you say that? Did such a case occur?—A. I presume such a case might. “Q. What idea had he; that you were interrogating this timid witness?—I think he brought him to me. “ Q. Was he there during all that time?—A. I think he was outside most of the time, “ Q. At what stage of the terrification did he come in with the handcuffs ?—A. I couldn’t say. I think he came in during the time that I was examining the witness. I don’t know at what stage ; I could not say. “ Q. How often did you actually put those handcuffs on anybody, or any number of men? —A. 1 never put them on any man in my life. “ Q. Who put them on in your presence?—A. I don’t think any man ever put them on in my presence. “ Q. That you swear to?—A. I swear that I have no knowledge of their ever having been put on a man to terrify him. ' “ Q. Did you put them on to encourage him, if not to terrify him ? —A. 1 think not for any such purpose. I tliink I have unlocked the handcuff and put it on my \\'ri8t to see how it worked, but not to terrify him. “ Q. If you didn’t put them on to terrify him or encourage him, what did you put them on him for ?—A. I couldn’t put them on. “ Q. What did you put them on your own wrist for?—A. To see how the handcuff worked. To see how it opened and how it locked. “ Q. And you here swear that no man, to your knowledge, was ever handcuffed in your office ?—A. According to the best of my knowledge and belief there has not been, to my recollection. I don’t recollect any such case. “ Q. Do you know the name of the individual who had this little suggestion made to him by the laying of a pair of handcuffs down by Chalker, when you were examining him?—A. I don’t, sir. “ Q. Who was the next case when the same suggestion was made?—A. Well, sir, I couldn’t tell you. “ Q. When was the third case?—A. I couldn’t tell you, sir. I never kept any book ac¬ count or record of them. “ Q. You didn’t make a record of this transaction?—A. No, sir; I don’t think it has oc¬ curred very often.” Second. Following his use of handcuffs for purposes of moral suasion, let us take a specimen of his ethical arguments. {Id. p. 532): “ Q. You say you have threatened these men with punishment if they did not give you information ?—A. I may have done so; I presume I have. ” Q. Do you not know it, sir? The question of the presumption of the thing within your own knowledge is not exactly the way to state.—A. I have used every appliance I have deemed legitimate to extract the truth from men that I had a moral certainty in my own mind had been committing a fraud on the Government. 58 CONGRESS AND PHELPS, DODGE & CO. n who was physically a timid 1 m New York who think I “ Q. Now, give us a little history of what you deem legitimate methods of extracting u truth.—A. By sitting down first and reasoning with the man, and telling him wlia't V better course would be-telling him what a wicked fellow he had been, how he had X uti every principle of manhood, morality and official honor, had been defrauding the PoJnr. ment a party to a fraud, and that his best and only way was to tell frankly just what he had done. Sometimes, when that failed. I held up to him the terrors of the law ro once m awdiile a section of the law to him, and of course it might bo deemed a threat or Otherwise. ^ ‘‘Q. Have you exhausted your catalogue ?— A. J do’nt care to go into that field '• A But I want to know something of that field.— A. tVell,' 1 think, unless my .icts ai e under some miputatioii of wrong, it is not necessary for me to take each case in detail ™^^»’ely dhshonorable, were men of such character Mr Robe! Y" -d I fit! m 1 IvllT ' T: i” fn Jen -"ean by that; a house. It appearrthat information against time previous tl that and burglary in that house some nmtion against t e l’: to give infer- who had defended the counsel for himself the same man thependencrof h committed the burglary. Daring tbatit„::e;ii'ri:i..::ii:'.;rf; ‘ and called me up. He s'atprl i^ morning early, Sion of certain personal ^ "? ^ clients were in posses- ‘i'e hrn,, and sol rc, pH:'™'’ "»<' ^-n written by a ntentber of had nothing whatever tn n' • i *’®^®‘'cd by a member of the firm, that ii-nned to bin, Violations Of the ■— ' has nothing to do with tl through, and said to him, “ This lation of the revenue law • ^^'^l the United States against them for vio- tion that no further neirntllr ' placed me in the posi- until this entire element r case, by or through me, diately send for the attorn! this case ; and I shall imme- them that you have ^ome tl for this firm, and shall notify me with this proposition, and that you have AN EXTRAOEDINARY HISTORY. 63 told me that you have threatened a member of that firm, and I will join them in a prosecution against you for attempting to black mail this firm, unless you deliver those letters up between now and six o’clock this even¬ ing.” Before the appointed time the letters were brought to me, and a member of that firm came to my room, and, in presence of counsel and attorney of the firm, I handed them over to him.* I refused to be the medium of any further negotiations in that case, with regard to terms, than those that had already been olfered previous to my knowledge of this transaction. In that case I did employ counsel, because the parties asked that the case might be settled on the terms which had been offered pre¬ viously to this, and I did deem that, if they wanted to settle it, it was a proper case to be settled for that amount—that is, if they so desired. I employed counsel for my own protection in that matter. I wished the judgment of some other man with regard to my own course. 1 obtained it, and I paid him from my own pocket. Mr. Poster. —I did not exactly understand the answer to Mr. Robcrt.s’ question. You employed counsel for what? Mr. Jayne. —I deemed that it was a case where some ugly points might arise, and where this matter might come up; that it probably would come up in the course of some discussion growing out of this case. I did con¬ sent and urge settlement of this case for a sum of money, that the counsel for the informer was not willing should be accepted. I deemed that some ugly proceedings might, perhaps, grow out of this attempt to black mail. *Iu ail article which appeared in the New York Qrapldc of May 11th, 1874, and which bears upon its face evidence of having been written by Jayne, the following more circum¬ stantial account of the proceedings in reference to the private letters alluded is given: “ Ou tlie morning of December 31 Mr. Jayne was called up at bis room at the Astor Hon.se by Dudley Field, one of the counsel of Herve, who stated to him that certain private letter.s written and rec. ived by a member of the firm were within his control, and ihat he had seen that member of the firm, and stated to him that he had control of these letters, and that the firm must make an increased ofl'er and pay a largely increased sum (so as to produce a larger moiety to his client, the informer, Herve), or he should make them public. He also stated to Mr. Jayne that he had seen Judge Fullerton and made the same statement to him, and that Judge Fullerton had sent him to Mr. Knox. Mr. Jayne immediately in¬ formed Mr. Field that his statement made it impossible for the Government ofiicers to exact any further sum under any circumstances, and that it would be necessary for the letters to be given up to their rightful owner before any further action could be taken. Mr. Field agreed thereupon to have the letters sent to Mr. Jayne that day before one o’clock. On going to his office that morning Mr. Jayne stated to the attorney and counsel of Phelps, Dodge & Co. what had transpired, and that he could take no fur¬ ther action, and should in no case proceed until these letters were delivered. The attorney and counsel of Phelps, Dodge & Co. left, to return when notified of the possession of the letters. These came to Mr. Jayne in a package about noon of the same day, when he notified the attorney and counsel of Phelps, Dodge & Co. of his possession of the letters, and it was then agreed that Mr. Wakeman should notify the member of the firm to whom the letters belonged, and that he (Wakeman) should call with him at the room of Mr. Jayne and receive them at six o’clock that evening. This was carried out, the letters being shown to no person except the attorney of the firm, and only to him for the purpose of identification, and to be certain of their po.ssession.” 64 CONGRESS AND PHELPS, DODGE & CO. I thought the truth might come out and I might need counsel. I came with the facts of the case to the Secretary of the Treasury, and to counsel whom I employed. Mr. Foster. —Then I am to understand that you employed counsel to prevent a larger sum being paid by Phelps, Dodge & Co.? Mr. Jayne,— I employed counsel to secure the settlement upon the terms that they offered, and seemed anxious to close upon. Mr. Foster. — And not to have them pay a larger sum ? Mr. Jayne.— Not to have them pay a larger sum, Mr. Foster. —I think it would be well for you to give the name of tlie counsel, for we have understood that he was employed for a different pur¬ pose. Mr. Jayne.— General Butler was the gentleman, sir. He was not em¬ ployed for a different purpose. Mr. Foster. —Has he been employed in any' other cases with you? Mr. Jayne. — Whenever I had questions of law that I did not under¬ stand—and in the course of my experience 1 have had a great many quescions of law and of evidence arising —1 have submitted a number of questions to General Butler, and I have paid him, I think, $1,500 besides what I p-aid in that case. Mr. Foster. Bow many cases has he been employed in ? Mr. Jayne, I could not tell the exact number that I have asked him questions with regard to. I should think two or three, or three or four perhaps. Mi.^ Foster. Now, about this Woodruff & Robinson case. I want your judgment as to the propriety of their paying $50,000. Do you think they ought to have paid it for a mere irregularity? You stated there was no intentional wrong. Mr. Jayne.— No, I do not state that. Mr. FOSTER.-I understood you to state it. Ir. Jayne.— No, sir ; I have not made such a statement. Mr. F0STER.-D0 you think there was an intentional wrong ? Mr. Jayne.- Well, sir; I should judge that there was not. Who o-ot^it? ^ ^O'li^ection with that case, what became of the penalty! Mr BEcr’”ET^Ti''' ^ All. BECK.-Fifty thousand dollars was paid ? Air. Jayne.— Yes, sir. any pa^t of'it neither the surveyor, naval officer, nor anybody else go AlSr EXTRAORDINARY HISTORY. 65 Mr. Jayne. —I guess not. Mr. Beck. —Why ? Mr. Jayne. —I suppose it has not been distributed yet. Mr. Beck. —How is it to be distributed ? Mr. Jayne.— I do not know. Mr. Beck. —The Government gets half of that |50,000 ? Mr. Jayne. —Yes, sir. Mr. Beck. —And then don’t you get half of the other halt ? Mr. Jayne. —No, sir. Mr. Beck. —Who, then, does ? I understand the surveyor, naval ofiBcer and collector gets one half of the other half among them ? Mr. Jayne. —A"es, sir—they get one quarter. Mr. Beck. —The Government gets one half, and half of the other half is distributed to those three men ; who gets the other quarter ? Mr. Jayne. —The other goes to the man who gives the information. Mr. Beck. —Is that you ? Mr. Jayne.— No, sir. Mr. Beck. —Who is it ? Mr. Jayne. —A man formerly in the employ of Woodruff & Robinson. Mr. Beck. —And you divide with him? What part of it comes to you, and what to him ? Mr. Jayne. —Well, sir, in matters of that kind, whatever they offer to pay me. Mr. Beck. —The Secretary pays you ? Mr. Jayne. —The Secretary awards, where there is but one claim put in, to the man who makes the claim. Mr. Beck. —And the claim is put in by you ? Mr. Jayne. —Yes, sir ; with power of attorney from this man. Mr. Beck. —Then what part of it belongs to you, and what are you going to pay to him ? Mr. Jayne. —Ju.st such sum as he sees fit to allow me would come- to me. Mr. Beck. —Was that the only arrangement you have with him ? Mr. Jayne. —No, sir. Mr. Beck. —What is it, then ? Mr. Jayne. —He voluntarily offered to give me one third. Mr. Beck. —One third of his fourth ? Mr. Jayne. —Yes, sir. Mr. Beck. —Therefore $25,000 is divided among the officers—$12,500 to the three high oflcicers ; $12,000 comes to you and that informer,, of which, he gets $8,000 and you get $4,000 ? 5 66 CONGRESS AND PHELPS, DODGE & CO. Mr. Jayne. — Y es, sir ; tliat is it. Mr. Beck. —You had the information before Mr. Moulton ? Mr. Jayne —It had been filed in my office prior to that. Mr. Beck. — Before he came and gave you that information at all ? Mr. Jayne. — Yes, sir. Mr. Beck — And that fellow is to get $8,000 out of this ? Mr. Jayne. — Yes, sir ; if the Secretary gives it to him. Mr. Beck.— Now, do you think if there was no wrong in that case, and no intentional wrong, that it would be right to pay a fellow $8,000 for that ; is that your idea of justice and fair dealing ? Mr. Jayne. —T liave not said it was. Mr. Beck.— Then the settlement of $50,000 is wrong, in your judgment? Mr. Jayne. —I think they have paid a sum of money in excess of what they should have paid ; that is my opinion. Mr. Beck.—A nd certainly $8,000 to a man of that sort is more than you tliink he is entitled to? Mr. Jayne.—T hat may be. Mr. Beck.— I am asking your opinion of it. I think so ; I have no question about it; I think he ought not to have anything; but I am asking you. Mr. Jayne.— It’s only a question of what the law is. The law is that the Secretary has absolute power to compromise for $10,000 as well as for $50,000. Mr. Beck. Would it not have been more just and honest for the repre¬ sentative of a Government like this, when there was no intentional wrong, and the officer so said, to have taken the actual amount of loss, than to have mulcted them in large amount, and for men who have done no service ? Mr. Jayne. I think so, sir. I am not here to defend or pass judgment on these people. Mr. Beck.— I am not asking that; I am asking your opinion. Is it not your opinion that a great wrong was done? Mr. Jayne. It is my opinion these men have paid more than they should. Ml. Beck. Is the Court bound to keep that money now? r. ayne. An Act of Congress can take it out of the Ti-easury after IS once m. It is in the Treasury now. Mr. Beck.— Can’t he take out $25,000 and distribute it without an A ot Congress? MryAT^K-Cortainly he can take out one half of what is in. Th would be about $24,000. AN EXTRAORDINARY HISTORY. 67 Mr. Beck. —Do you think, with a full presentation of the ease as made by you to this Committee, that the Secretary would be justified in paying $24,000 to these people, or subordinates of the Government? Mr. Jayne. —Well, sir, I shall not insist that he would be, by any sort of means. Mr. Beck. —Do you think if the facts had been known in the Phelps- Dodge case that the overpayments by them, which have been developed here to a very large extent, when the underpayments amounted to only $1,600—do you think if the amounts they have overpaid had been known at the the time, that that would have mitigated the amount demanded ? Mr. Jayne.— I do not believe that there was any overpayment, except in this way: Avhere the appraiser raised the goods, or they were raised to make market value upon the entry. I found no case, in all my examina¬ tion of their books, where they had invoiced their goods at greater prices than they paid for them—not a single instance. Mr. Beck. —Nor where they were raised here ? Mr. Jayne. —Oh, yes; they were raised here upon their entries. As I say, I found no such cases. I heard, after the case was settled, that such an element existed. I say if such an element did exist, and had I known it at the time, that it would have made a very great difference with regard to my opinion in that case. If that be true, that they over invoiced as well as under invoiced, it would make a very different case with regard to the ap¬ parent intent in the case. Mr. Beck. —When did you first hear of that ? Mr. Jayne. —I heard of it after the case was settled. Mr. Beck.— And the money paid and distributed ? Mr. Jayne.— Ye.s, sir. Mr. Beck.— And never before. Mr. Jayne. —I never heard of that over invoicing until I saw this publica¬ tion. Mr. Beck. —That has only been out a short time, has it not ? Mr. Jayne. —This letter, addressed to their friends and the public, is dated April 15, 1873. It probably was not published before its date. Mr. Beck. —I was struck very much, going over that book (of yours), with the fact that, in nearly all the cases you cited, it (the fraud) was done by collusion with the officers of the Government.—A. I have a list which will show you the exact proportion. I made out a list of them to-day, tliinking a question of that kind would be asked, and deeming it a very proper mat¬ ter for inquiry. Thirty of the cases out of the sixty-one were false weights, obtained by collusion Avith United States weighers or employes in the weigh¬ ers’ department; six were false liquidations or false classifications, obtained 68 CONGRESS AND PHELPS, DODGE & CO. b}^ collusion with Government officers; nine were undervaluations. In one case, at least, of those it was bj’' collusion with the Government officer One was a false gauge bj collusion with the Government officer; nine were false classifications, obtained by collusions with the Government officers' two were false verifications as to quantit}^, obtained by tricks—by devices' three were false weights and false damage combined, and one was the ware¬ house case, with regard to which you have heard; making sixty-one in all Q. And some forty-six of them were by collusion with officers?—A. There were about fifty-two or fifty-tliree of tliem'. Q. In one form or another, collusion?—A. Yes, sir. Q. Have any of these Government officers been punished?—A, They have been sent out of the service—dismissed. Q,. And kept out of the service ?—A. Yes, sir. Q. All of them ?—A. I think there arc a number of officers in the service, It is not my fault, sir. Q. I am not speaking of fault, sir.—A. I wish to say in that connection that I have never made a recommendation for dismissal of any officer from the Government service.* I have assumed that it was no part of the func¬ tions of a special agent of the Treasury Department to do the thinking of other people. It was raei’ely his business to present the facts. Q. A number have been dismissed, and a good many are still there, you think?—A. I think there are some officers there who should not be there, and a good many have been dismissed. Q. And against whom you have reported facts of collusion to the Secre¬ tary ? A. A number of them; the receipt of money- Q. That is, receiving bribes—not doing his duty, I suppose you mean? A. I mean that men have got their goods through without paying the proper duty. Q. And paying something to the officer ?_A. Yes, sir. And if the officers had done their duty they would not have got them through. . Q. These facts you have reported to the Secretary of the Treasury ?-A. ’ies, sir. <1^ AncUhese men the Secretary of the Treasury still keeps in office ?- A. Some few of them are in office. “- The attention of the reader is a,sked to a comparison of tliis testimony of Jayne’s with le 0 owing extract from the testimony of the same witness before the Congressional Com¬ mittee in 1879 ■ ° Q. You say tliat whenever you found, in the whole course of your service, that an officer or i-emovaf° arrest?—A. I instantly caused his arrest Q. Or removal ?-Ye,s, sir. Congress, p. 532.] ' AN EXTRAOKDINARY HIbTORY. 69 Q. Is it possible, under any law, to caiTy on the office of Custom House with safety to the Government while men who receive bribes arc kept in office?—A. No, sir; not in my judgment. And I look upon the taking of books and papers of commercial houses, and compelling them to pay pen¬ alty, while the thieve.® inside the Custom House that have aided them arc left unmolested, as no better than highway robbery. Mr. Wood.— Who gave you the first information in the Fhclps-Dodge case ? Mr. Jayne. —I wish to say to the gentleman-' Mr. Wood.— Please to answer the question. Mr. Jayne.— I wish to say to the gentleman and to the Committee that I have no objection in that case to answer the question; but in any case where information has been given to me in confidence, and where my name appears opposite the sum of money, I shall not feel at liberty to give the names of the parties who have brought information to me. The courts do not permit that question to be inquired into, and I do not deem that I .should be doing justice to other men to state these facts before this Com¬ mittee or elsewhere. But in the Phelps-Dodge case a man wlio had been in the employment of Phelps, Dodge & Co., by the name of Hervey, came to me with his attorney. Q. That was the first information that you had of anything wrong?—A. That was the first information. Q. Was he then in the employment of the firm ?—A. Not then; but he had been in the employment of Phelps, Dodge & Co, Q. Was there not another clerk of Phelps, Dodge & Co. who also gave you information?—A. Not voluntarily. I suppose you allude to the young man, Kennedy. Mr. Kennedy came to my room once when I had sent for him to the house where he lived. He said to me substantially this: “I am in the employment of Phelps, Dodge & Co.; if I knew anything with refer¬ ence to them I would not want to communicate it; I know of nothing which is of much importance,” and he gave me nothing that was of much import¬ ance. I shall crave your indulgence to make an explanation with regard to that, as the young man’s name has been mentioned here, and as I am sure that Mr. Dodge would not like to do any young man a wrong, and I certainly would not. Mr. Kennedy was to receive no share in moiety; he had no promise of anything of that kind in any way, shape or mnnner; but, after the case had been closed and settled, Mr. Kennedy came to m}^ office and said that he had been dismissed from the service of the fii’in, and that his sister, his mother, and his crippled brother were in want in consequence of it; and that as one of the incidents of the examination, a cruel suspicion had fallen on him, which had done him personal wrong. I went to the 70 CONGRESS AND PHELPS, DODGE & CO. Collector of the Port, and I stated to him: “ Here is a young man who lias been incidently harmed by this examination, who has done no wron«’ I think he should be provided for, for he says that liis mother, his sisterand his brother are in want.’' The Collector said that he thought there would be an apparent impropriety, although there would be no real impropriety m appointing him. I then went to Colonel James, the Postmaster; toid him tbe same story, and made application, and obtained an appointment for Kennedy. Previously to doing this, however, I had paid him (simply because he came to me and said that he was in want, that they needed assistance at his house, and that he had been wronged by the operations of this law) three or four hundred dollars out of my own pocket. I gave it to him, as he said he needed it for the wants of his family. . These are the exact facts with reference to that young man, Kennedv. Q. Did you know at that time what position Mr. Kennedy occupiedwitli Phelps, Dodge & Co.? — A. I knevv from Mr. Hervey that he was an as¬ sistant book-keeper in the ofiSce of Phelps, Dodge & Co. Q. I understood you to say that you sent for him ?—A. I sent for him. Q. Is that the way in which he came to your house?— A. He came to the Astoi House. Mr. Hervey said that Mr. Kennedy was knowing of cer¬ tain^ transaetions of the firm, which Mr. Hervey detailed to me verbally. said, Will this young man come and make a statement of these facts, t lat I may verify them ?” The young man came, and the statements made by Hervey were not fully verified by Kennedy. Q. Ihcn Ml. Kennedy went voluntarily to the Astor House to meet you, fine you afteiwarcl sent for him?—A. He came to the Astor House to see me once. J. How often did you see him during the progress of the investigation? —A. 1 think I saw him but once. Q. And he then gave you information ?—A. He gave me no information that was of much importance. J Did you oi did you not state to Mr. Dodge’s attorney that you knew _ ftiansaction that was going on in that concern from day to day? Mr H ^ ^ stated, perhaps, something like this: That biends who communicated with him concerning traiisac- of I was perfectly square and frank with the attorneys Yon through during that investigation, or was not"* gentlemen before you, and let them say whether I was Q. Haveymu not said since vou have been in of this over valuation of Phelps, Dodge & Co.’s AYashington that you knew invoices ?—A. I have not so AN EXTRAORDINARY HISTORY. Q. Were not the attorneys of Phelps, Dodge & Co. personal friends of yours?—A. Mr. Wakeman had been formerly Surveyor of the Port of New T’ork, and it is a fact that Mr. Wakeman came to the Custom House occa¬ sionally, and I have gone to the room adjoining my office and taken oysters with him. I met him socially frequently, a fact which Mr. Dodge knew before he employed him. Q. Did not Mr. Wakeman render you essential service in obtaining for you that appointment?—A. He did not. At the time I was appointed 1 had never seen Mr. Wakeman. Q. T’ou did not know him at all ?— A. I did not know him at all. Q. Did you not hear from the attorneys of Phelps, Dodge k Co. that they would not pay these men until they knew who the spy was whom you had in their store?—A. No, sir; I never heard such a statement that I re¬ collect. Q. Who gave you the information that Mr. Stokes was burning his papers?—A. I think Mr. Hervey came to me and told me he had learned that fact. 0,. You are quite sure that it was not Mr. Kennedy?—A. I know that it was not Mr. Kennedy. Q. It was Mr. Hervey, who was a dismissed clerk ?—A. It was Hervey, a dismissed clerk. Q. Was there any other person in the employment of those gentlemen at that time whom you communicated with ?—A. There was. Q. Who were they?—A. One was Mr. Whitelow, who came to my room voluntarily. Q. What were his duties in Phelps, Dodge & Co.’s office?—A. I cannot tell you. I think he was a sort of messenger, or mail clerk, or something of that kind. Q. Was he then in their employment ?—A. He was. Q. What motive had he for telling you of their affairs ?—A. I cannot tell, except that he was a friend of Mr. Hervey. Q. Then through Hervey all the employes of the concern were becoming gradually demoralized ?—A. I do not know how badly they were becoming demoralized. I sought nothing from any of these men .save the truth, and it was my duty to learn all the truth I could. Q. You have already stated the names of three parties, some of whom were in the employment of Phelps, Dodge & Co. at the time of the com¬ munications, and some of whom had been dismissed. You have named three parties in that concern whom you were in .secret communication with in regard to the business of the firm. Now I wish you to name any other that you can remember.—A. There are no others. 72 CONGRESS AND PHELPS, DODGE & CO. Q. You are quite sure of that? — A. I tliink not. Q. Be very careful now, because I liavc information on that subject which, probably, you liave not.—A. (After referring to some papers.) p was charged that the firm of Phelps, Dodge & Co. had paid a sumof nionev to a damage examiner, and that the money bad been paid in the presence of an employe of the firm, by the name of Mr. Frank Heller. Heller was in charge of the warehouse, as I should judge from this paper. Q. AVhat paper are you reading from ? — A. I am reading from an affi¬ davit. Q. Made by whom? —A. Made by Heller. It was charged that Heller was present when money was paid by the Custom House clerk of Phelps, Dodge & Go., Mr. Moore, to a damage examiner, who had been examining some Rus.sian sheet iron. I called Mr. Heller before me. I sent an officer for him to come to my office, not secretly, but in the day time, openly, knowing that the firm would know all about it. I questioned him in refer- ence to that transaction, and he made his statement, and I have here liis a davit with reference to what he saw and what he knew in regard to that transaction. It was in order to confirm or contradict the statement which 1 ta received, and he confirmed it. It was in order to arrive at the truth In ie,.ai to the charge whicli had been made against the firm. I wanted to arrive at the truth. Q. Had this charge which you now rpfpr tn nnnn«pDnn witi, tliP well as suspected payment of noriod ” ed to the under valuation of merchandise, as of money for damage allowance during that period.’ AN EXTRAORDINARY HISTORY. 73 Q, This affidavit which you spoke of was made by Hervey ?—A. No, sir ; by Frank Heller. Q. Who was Frank Heller?—A. A man in their employ. Q. He there refers to a fourth Individual guilty of bribing a damage ex¬ aminer.—A. Let me state, so that you will not misunderstand me. Among the charges made against this firm by Air. Hervey was a charge that that firm had made payments of money to damage examiners in the appraisers’ department for allowing excessive damage allowances on Russian sheet iron. He said to me that Mr. Heller Avas present at the time when one of those payments was made to the examiner, and that Mr. Heller Avould either verify or contradict his statement. I thereupon sent to the ware¬ house of Phelps, Dodge & Co., and had Mr. Heller come to my office (I did it in the day time, openly), and Mr. Heller made his statement. Q. You heard Mr. Dodge’s statement before this Committee?—A, I did. Q. This is the same case which he referred to himself as the Russian sheet iron case, is it not ?—A. The statement of Mr. Dodge may have been his understanding of the casCj but the charge was that at various, different and diverse times this firm had paid sums of money to the damage examin¬ ers in order to induce them to allow greater damages than had actually occurred on the voyage of importation; that these sums had been paid by their cashier, Mr. William Dodge Porter, a nepheAv of the senior of the firm, on tickets by some member of the firm, to a Mr. Moore, who was their Custom House clerk; that Mr. Moore had disbursed these moneys to the damage examiners; that the payment had been made in the presence of Mr. Hervey, and that one of them had been made in the presence of Mr. Heller. He called particular attention to that one. I called Mr. Heller before me and took his statement, in order to verify or contradict this statement of Mr. Hervey; and though all the men alluded to, including Mr. William Dodge Porter, the nephew of the head of the firm, did state, on their oath, that sums of money had been paid to induce excessive damage allowances, yet I could connect no particular transaction with any particular importa¬ tion. The evidence appeared to show that the allowances and the exami¬ nation of those goods did not occur until three, or four, or five weeks after the goods had gone to the warehouse of the firm ; that they kept a large quantity in the storehouse, and that when the iron Avas brought in there it Avas a very difficult thing to examine it and ascertain the exact amount of damage. While it appeared that sums of money were paid to these exami¬ ners, yet I was unable to fasten their payments on any particular impor¬ tation, and hence no importations of Russian sheet iron were included in the suit against the firm. Q, Have you Mr. Porter’s affidavit there?—A. I have, ii COxVaRESS AND PHELPS, DODGE & CO. ™ .■! iU..» i,> ..(S™ .fTT-lttr, id'll bil “ Unitki) 8tatk.s “ PiiELI'S, Dodge A Co. \ “SOUTIIEUX Distuict op Neh- Youk', ««; Nevv^ersey, and'clrt h’rLfZr’T'’’ resides at Orange Vallej, that from 1854 .mfi a i '■'H'^'ness at No. .^3 Bcekmaii street, Nen^York,and thToo^zi^ r »■'• “»>*' ‘ 5 ago, wlion he b ■■ the .said firm ho was assistant cashier until cleveB fr years a-i-o, wlion he bpou . i • " assistant casmer until clevei! her last. And dpnnnn, ca.s iior, wliich position lie lield until he left the said firm in Octo- of the said firm and ^ ®rnployod he kept the cash book and cash aeconnt ployed as nssistlnt clZln H ’ firm received allowance.s'filmTr a ^ the said Moore about tl f * House for damage on Ru.ssian sheet iron, and that ous sums of monpv ^ oxamiiiations, drew from deponent as cashieryari- lars ; and that tlio said^^”^ fiifiorent times to one hundred or one hundred and fifty dol- tfio ;aid firtl!!; tiratlmT? - -eh cashier by order of somemeicf from one of the throo ini’t *'*^°''* pay tlie said sums from his desk came generally respectively; and he sar' James Stokes, Anson P. Stokes and Thomas Stokes the said firm a.s ‘ Custom ^ charged by him on the cash bookoi tlie said cash book to tlie IqcW “*' ‘ f'dstom House fees,' and were carried from further says that said sums of °°* account of ‘charges;'and he expenses, such as entries permZ“°^ "'ore paid in addition to all legitimate Custom House and he further says that on ^ bonds, withdrawals and other like chai'ge.s: CharlG.s F. Herve has stated oooasions during the last four years, the said of the firm liad been yiaid by Mr"M ^ ^sums so drawn by Mr. Moore or some menibei says that ho stated to tije said If • Hoiiso officers in his presence, and hi their transaction.s; and he says ^''"1 not "''sfi to know anything aboiil office witJi him for yoara and' tl '7?'"'' employed in the aaim ments; and lie fu,,thg,, hoheyes him trutliful and reliable in all liia state money to the customs oifioer.s wor said Herve in regard to the payments o: can now rocollect. ' ^ at the time of the payments, as near as In aiteriw .„a " WM. D. poETSii cay of 1-obruary, 1873, before me, “B, G. JAY^NE, “ 'BjjecftM TrmsKr^ Dgparmed" AN EXTRAOIIDINARY HIHTORY. 75 Mr. Jayxk continued : Mr. Porter lundo tliis affirmation. Mr. Porter appeared to be a thoroughly reliable, con.'^cientiou.s man, who wished to do no man harm, but to tell the exact truth without variation at all ; and the next day he came to my office and said, “ Mr. Jayne, I suppose when vou asked me to tell the truth 1 should have told the whole truth, should I not r’ I said, “ It was my understanding that you did so.” He said, “ I did not tell all ; but I went home and stated to my wife what 1 had done, and we. had a season of prayer over it; and 1 have concluded to come here and tell you the balance of the story.” lie said, “ These men have been my friends, but the truth should be told.” He then voluntarily made this additional statement : Tnitki) St.\tes ) “ rs. Tuku’S, Doihjk k Co. ) “ Soi’TiiKUX Distiik'T of New Yohk, ss: “William Dodge Porter alii rma that ho has Iwen cashier of the firm of Phelps, Dodge & Co., importers, doing business at Nos. 11 to 21 Cliff street, in this city, from 1862 until 1872. And ho says that, in his statement of yesterday, he made no allusion to amounts paid to Itnitod SUto weighers for duplicate returns, but the amounts paid, as then stated, were for oihor matters not relating in any case to the weight of goods. And ho further says that his attention was called, by one Charles F. Herve, at the time (which he thinks was about one year ago) to duplicate invoices of a (piantity of dross goods consigned to D. Willis James, a partner of the said house, wherein the value and footings wore dinbrontly sUitod, the difference being more than one third the value. And he says that ho was informed at tlie time that the one invoice represented the cost price for the purpose of payment and remittance, and the other was for use in the Custom House. And ho further says that, at the time of making the payments mentioned yesterday, ho several times remonstrated Avith the said Moore, tolling the said Moore that he. Porter, did not believe it right to pay those sums of money to the officers of the Government, as they (the officers) wore paid for their services by the Government. And ho says that the said Moore would make .nnswer that ‘We have to do it.’ ‘ It’s customary,’ or that ‘ It’s all right,' or words to that effect. And ho further says that he believes that William E. Dodge, Sr., knew nothing of those payments in any shape or form. “WM. D. PORTER. “Subscribed and affirmed this 7th day of February, 1873, before mo, •• B. G. JAYNE, '^Special Agent United States Trensunj Department." Mr. HoDGE.—May I make one single remark to the Committee ? The Chatkman put the question, and permission was given to Mr. Dodge. Mr. Dodge.— The facts arc simply and solely these : There was a friend who bought a dress in Paris for Mrs. James, the wife of one of my partners. 76 CONGRESS AND PHELPS, DODGE & CO. She remonstrated against tlie price wliicli the dressmaker charged for if the bill that was sent to the friend who bought it, and she insisted on'it that she would not pay the price. The dressmaker made another bill Mr. James was away South at the time when that bill came home. Botli bills, subsequently, came back in the same letter together. One of the bills was the one that was paid and receipted ; the other had no receipt at all. That was the bill that wa.s rejected. Out of respect for my partner, who is a little above undertaking to cheat upon a single dress I wish to state that fact. And now I wish simply to state this : That we heard nothing of this afSdavit of Mr. Porter until some si.x months afterward. He is a nephew of mine, an excellent young man, to whom we gave capital to go into business, and who is established in business just around the corner from us. He always had our confidence. When we heard of this afBdavitwe sent for Mr. Porter and asked him wdiat it meant, and he made this state- nient . That Mr. Jayne came into his office one day and said to him, very blandly, “Have you received a letter from your cou.sin, Mr. William E, II stating that I am to call here this morning ?” He said he had not, “Did not Mr. Dodge, in person, tell you that I was coming?” "No." ell, it makes no difference; I want to make some inquiries.” He went on and made these various inquiries, and after he had made some few mquiiics. Mi. I oiter said, “ I do not know who you are or why you should ^ aie t lese inquiries of me.” As I understand the matter, Jayne then flew 0 sue i a passion as you saw him in the other day. He opened his coat Y know who I am. Here is my badge of office, no ^couversation, so and so; I will put it right down upon All T 1 ^ down and wrote, and Mr. Porter signed it. ^olelr fl Russian iron matter is simply and bv salt wat . sues into the public stores when damaged examined ^ dumense importance that it should be opened and ^ '*^tor it goes to the warehouse. When it is being the men'woiil!?^^*^ P'^H’ose of having the inspectors go to seek, in the raornino.’fn course of business, stay from the hour often " ain r" ^ we have again and could seel’ so that^tlm ^ on working as long as they their appraisement have had to pay them hours we hours. We have dnn. ^ or thirty dollars for the work over a dollar to any apDmhl.T the city of New^York whm> utterly impossible, in > e business has to bo done in such a burry, to AN EXTRAORDINARY HISTORY. 77 liave the business done, unless you engage men to work over hours. That must be done, or else goods may be damaged or destroyed. Mr. Wood (to Mr. Jayne).—Leaving that subject, please to tell us the modus operandi of the process which you have adopted yourself with refer¬ ence to the seizure of books and papers. Mr. Jayne. —1 wish, first, the indulgence of the Committee, to say this : That on going to Mr. Porter’s office I found that he had not arrived. He lived at Orange Valley. I was at his office in the morning, a little before he arrived. I sat down in the office and waited until he came. I told him, immediately upon his arrival, who I was and what I had come for, and that I wished to ascertain the exact truth. No unkind word ever passed between Mr. Porter and myself, and I never stated to him that I had the letter from Phelps, Dodge & Co., or that I anticipated that there was one ; and that picture which has been made here, to my personal knowledge, is not so, so help me God. Mr. Dodge. —We have the affidavit of Mr. Porter to that effect. REBUTTING AFFIDAVITS. In further answer to the statements of Jayne as above made to the Committee by Mr. Dodge, it is desirable, and at the same time essential to the completeness of this narrative, to here say—that subsequently to the hearing at Washington, the charge that employes of Phelps, Dodge & Co., under the sanction or direction of its firm, had paid money at different times to influence the judgment of “ damage examiners ” of the Custom House, was reiterated in an article (evidently prepared by Jayne) which appeared in the N. Y. Daily Graphic of May 11th, 1874. The result was to call forth from the Custom House officers and other parties accused the following series of affidavits (contradicting the state¬ ment of Jayne in every particular), and which received equal publicity in the columns of the Daily GrapMc of May 16th, 1874. To the Editor of the Graphic. “ Our attention has been called to certain affidavits published in the Dally Grapiiic of last Monday reflecting upon us and upon other officers in our department. Each of us has had a business experience of over thirty years, and we have occupied our present positions as Custom House damage examiners and appraisers, one of us for nine and the other for five years. So far as we know this is the first time that the character of either of us has ever been assailed; and we must ask you to publish in refutation our affidavits, together with the letters of Messrs. Moore, Porter and Prank Heller, who at our request have kindly made sworn statements in support of our own. “ Mr. Gardner, also referred to in the affidavit of Charles E. Herve, is dead. “ Respectfully, “ SAMUEL BOYD. “ SAMUEL J. FARNUM.” CONGRESS AND PHELPS, DODGE & CO. “City and Cod’nty of New York, State of New York, ss: “ Samuel Bo3-d, being duly sworn, saj's that he resides at Montclair, N. J.; tli:it he is now and has been for the last nine j-ears, a damage examiner and appraiser in the New York Custom House; that there is not now connected With the Custom House, and there has not been so connected for the last nine jmars, any otlier damage examiner and appraiser by the name of Boyd : that he has read in the Daily Graphic of May 11 an affidavit of Charles P, Herve, and that the statements made tlierein that said Hen'e has seen one Moore, Custom House clerk of Phelfs, Dodge & Co., pay various sums of money to one Boyd, damage ex¬ aminer of the Custom House, meaning tlie deponent, and that said Moore presented to the deponent a bronze clock, are entirely untrue. The deponent says that some years ago he purchased an imitation bronze clock at the regular wliolesale price from the Ansonia Brass and Copper Company, aud that he paid five dollars for it; and that Mr. S. J. Farnum also purchased one at the same price. The deponent further says that he has never received, directly or indirectly, any money, or the loan of any money', nor any gift of any kind, nor any reward or remuneration of any description whatever from said Moore, or from Phelps, Dodge & Co., or from any person or persons in the employ' of or representing them; and that the statements and suggestions to that effect, published in the Daily Graphic of May 11, are utterly false, and without any' foundation in fact. “ SAMUEL BOYD. “Subscribed and sworn to before me, this loth day' of May, 1874, “ PHILIP JORDAN, Notary Public, N. T. Co." “City and County of New York, State op New Y"ork, ss : “ Samuel J. Farnum, being duly sworn, says that he resides in the City of New York; that he is now and has been for five years a damage examiner and appraiser in the New York Custom House; that for five ymars there has been no other damage examiner by the name of Barnum in the Custom House ; that he has read in the Daily Graphic of the 11th of Ma,y an affidavit of Charles F. Herve, and that the statements therein made, that said Herve has seen one Moore, Custom House clerk of Phelps, Dodge & Co., pay various sums of money to one Farnum, damage examiner in the Custom House, meaning the deponent, and that the said Moore presented to the deponent a bronze clock, are entirely untrue. The deponent says he and Mr. Boyd once purchased two imitation bronze clocks, at the regular wholesale price, from the Ansonia Brass and Copper Company, and that they paid five dol. lars apiece for them. The deponent further says that he has never seceived, directly or in¬ directly, any money or the loan ot any money, nor any gift of any kind, nor any reward or remuneration whatever, from said Moore, or from Phelps, Dodge & Company, or from any person or persons in their employ or representing them, and that the statements and sug¬ gestions to that effect printed in the Daily Graphic of the 11th instant are entirely f* and without any foundation in fact. “ SAMUEL J. farnum. “Subscribed and sworn to before me, this 15th day of May, 1874, “PHILIP JORDAN, ''Notary Public, N. Y. Co." AN EXTRAORDINARY HISTORY. 79 “New York, May 15, 1874. “ Messrs. Samuel Boyd and S. J. Farnum. “ Dear Sirs —You have requested me to reply to the statements published in the Daily Graphic, 11th instant. Herve states that I paid money to you and to other Custom House damage examiners, and presented each of you with a bronze clock. These statements are each and all of them entirely false. “ The suggestions in the other affidavits, skillfully made to appear as if sustaining them, are without real foundation. I remember that you did each purchase and pay for, at whole¬ sale price, a cheap, cast iron, bronze colored clock, from the store of the Anzonia Brass and Copper Company, which is in Phelps, Dodge & Co.’s building, but during the twenty-eight years that I have been at the head of their Custom House Department I never paid to you or to Mr. Farnum, or to any Custom House damage examiner, any money, directly or indi¬ rectly, nor did I .ever give either of you a clock. I do not believe that any such payment or gift was ever made by or for the firm, and, from the position held by me, am confident that such payment or gift could not have been made without my knowledge. “Yery truly, “ P. N. MOORE. “City and County of New York, ss : “ I, Peter N. Moore, being duly sworn, do depose and say that the statements contained in the foregoing letter, written and subscribed by me, are true. “ Sworn to before me, this 15th day of May, 1874, “ THOS. J. SANSON, Notary PvMic, N. F. Co." “ No. m Beekman Street, New York, May 15, 1874. “ Mr. S.uiuel Boyd. "Dear Sir —In reply to your request, I am very glad of the opportunity to say that I never knew of any money being given to you, or to any other United States damage ex¬ aminer. I do not believe any such payment was ever made by or for Phelps, Dodge & Co,, nor have I ever so stated. The statement and suggestions in Herve’s affidavit that, on the order of a member of the firm, I paid a large sum of money to Mr. Moore, and that I was informed that this money was paid to Custom House examiners, is wholly and entirely false. I never saw or heard of this affidavit of Herve until after it appeared in the Daily Graphic of the 11th instant. I have often paid to Mr. Moore small sums of a few dollars at a time, to be given to storekeepers, watchmen and subordinates in the Custom House for extra hours’ work, and have repeatedly said that such payments, although customary among importers, are not right, and ought not to be necessary; but I am greatly surprised to find that these expressions of mine have been so artfully combined in the statement of my ex¬ amination, as prepared by SpecialAgent Jayne for me to sign, that they are made to appear to support the monstrous falsehoods of Herve. “ Respectfully yours, WILLIAM D. PORTER. “City and County of New York, .ss : “ William D. Porter, being duly affirmed, says the statements made in the foregoing letter are true of his own knowledge. “ Affirmed before me, this 16th day of May, 1874, “ISRAEL MINOR, Jr., " Notary Public, New York County." 80 CONGRESS AND PHELPS, DODGE & CO. “ Me. Samuel Boyd. “ New York City, May 13,18U. “ Dear Sir—You liave asked me to make a statement about affidavit published in ft Graphic newspaper of last Mopday. That affidavit was written out by Mr. Jayne at his office in tlie Custom House, and was signed by me without my reading it. I am a Germa and it is hard for me to read English in writing. I am a porter in the employ of mI®"' Phelps, Dodge & Co., and have cliarge of overhauling Russia sheet iron. As to any pa! merits of money having been made to you, or to any other examiners, I have no knowledge or belief that any such payments were ever made by Messrs. Phelps, Dodge k Co., nor by any one for them. Mr. Jayne makes me to say in my affidavit that Herve called mvat- tention to the payment of money by Mr. Moore to Custom House examiners. If Herve"told me that money was so paid, I did not see it paid, nor do I believe it was paid, nor have I ever so stated. , Respectfully yours, '• FRANK HELLER, “ Subscribed and sworn to before me, this 15th day of May, 1874. In witness whereof, I have hereunto set my hand and affixed my official seal. [Se^l.] “ WILLIAM H. CLARKSON, ^'Notary Public for Ntw York County, N. 7." EXAMINATION OF JAYNE BEFORE THE COMMITTEE OF WAYS AND MEANS CONTINUED, iMARCH 11 th 1814 . Ihe Chairman. Who fui’nishecl you with the duplicate invoices in the case of Phelps, Dodge & Co.?—A. They were brought to me by the attorney of the informer ; that is, those I had in advance of getting their books. About two thirds of all of them were found attached to their books and in their possession. Q. Ihose that were brought before you seized their books were brought bv the attornev of tlK^ a < -ir AN EXTRAOEDINARY HISTORY. 81 Mr. Kassox. —He did not say in connection with this case, but prior to it. Mr. Jayne —Not in connection with the revenue case at all. Mr. Roberts. —But there were papers that had been taken ?—A. That was a matter entirely of newspaper notoriety. I spoke of the attorney of this informer having been the attorney for a man who had committed a burglary prior to that time. Q. A’ou knew that some of the papers which the informer brought to you had been stolen from Plielps, Dodge & Co. ?—A. I knew they were bills of goods purchased by those gentlemen. Q. T^ou knew the papers had been stolen from the house?—A. Well, they were brought to my ofiBce, They came to ray office in the hands of an attorney. Q. And with the statement that they were procured from the house of Phelps, Dodge & Co.?—A. That they were copies of bills of goods that they had purchased in Wales. Q. In a word, they had been stolen from the house of Phelps, Dodge & Co. ?—A. Well, sir, you shall name it. The Chairman. —Was that in connection with the burglary ?—A. Not at all. It had nothing to do with it whatever, as I understood. Mr. Roberts. —Have you any of those papers now?—A. I have those papers attached to those entries, that showed the original cost of the goods —some of them. Q. Do you regard those papers as the property of Phelps, Dodge & Co.?—A. I regard them as the property of the United States, and as belonging to or attached to the entry, and it Avas the duty of Phelps, Dodge & Co., when they received them, to haA'e brought them to the Custom House and to have attached them to the entry, as they swore upon each entry they would do. Mr. Dodge. — I would like to ask 3 mu if you did not know the papers that you had, and Avhich were not invoices in any shape or manner, and which you tried to make invoices, were stolen property ?—A. I say I knew they were, by comparison with the invoices in the Custom House, bills of the same identical goods : and when I found they Avere in the same hand¬ writing with the papers in the Custom House I assumed that they had come from the parties from whom they had purchased these goods. I did not stop to try side issues, any more than a court questions the source of evi¬ dence. Mr. Eaton gave you a constitutional argument on that point. An officer has no right, more than a court has, to try side issues. The Chairman. —Did you not promise the attorney of Phelps, Dodge & Co. that, if the money were paid, all the papers that had been taken 6 82 CONGRESS AND PHELPS. DODGE & CO. from them should be returned ? That question is put to you by Mr Dodge, through me.— A. There was no stipulation with regard to them Mr. Beck. — The lawyer of the infoimcr brought you the papers?— A Yes, sir. Q. And you presumed they were stolen, and I suppose he knew it? A. It is not my duty to presume in any way. The law makes it my duty to ascertain if any fraud has been committed; to avail myself of every source of information. Q. Would the courts of New York allow a lawyer to practice at tlieir bar when he was an attorney of a man known to be a thief, and dealinj; with stolen papers ? — A. I believe the courts in New York and in every other State in this Union allow attorneys to defend thieves and protect them. Q. But do they allow them to bring suit and get fees out of the proceeds of plunder when they themselves have been the agents or aiders and abet- tor.s of the thieves?— A. I do not get the exact point of your question. Please state it again. Q. I will put it in this way; Did the Secretary of the Treasury know,when he paid you that money, that you were to give two thirds of it to the tliief and his lawyer ?— A. The Secretary of the Treasury knew that I presented evidence, and I told him the whole story of its source, and how the case came to me, and all about it. Q. And knew that this thief and his lawyer were to get two thirds of it? A. Well, you call him a thief; yes, sir. Q. Yes, sir ; I do call him a thief. And the Secretary of the Treasury knew that he was to get two thirds of it, and he paid the money?- . Secretary of the Treasury knew that my name was put on that in ormation. I do not suppose he ever made an inquiry about that. ^ . t loug it you said you told him all the facts in the case.—A. I told him how I got the evidence in the case. Q. And the amount to go to those men ?— A. I do not know that I told Hin that. I do not know that he asked me that question. I should if be had asked me. Q. Do you think he did? A. I have no recollection of ever having aeon- have tddZbai' regard to that point. If he had asked me I should of the United States, to of monev^t^ T officer who was to pay out such a large sum to a man ^ thirds of the portion coming to you was to go Ind Ztdg^^ IpIJ^r’’ rr^ other was aiding tiuti .—A. You name him a thief. AN EXTRAORDINARY HISTORY. 8: Q. I will ask you whether, if you were to raise your hand to heaven, you could say you did not believe, and had information upon which you acted, that they were stolen papers ?—A. I do not know that I am called upon to say whether I consider it a theft or not. Q. Do you refuse to answer the question ? It is a simple one. Did you not know, and do you not believe now that those papers were stolen ; and did you not believe it at the time of making an agreement to give them two thirds?—A. I believe those papers were copies of bills showing the original true price of these goads that should have been placed in the Cus¬ tom House at that time. Mr. Beck.— Mr. Chairman, I object to that answer. Mr. Jayne. —It was no part of my duty to try that issue, but it was my duty to ascertain if the law had been violated. Q. Now, Mr. Jayne, you can answer or you can refuse to amswer. I will put a question that you cannot misunderstand. Do you not believe that at the time that you got those papers and made the contract to pay that man and his lawyer two thirds of what you could make out of the case, that they had come by those papers dishonestly ? Do you not so believe ? You ean say yes or no, or you can refuse to answer, whichever you please. —A. I do not think that is a proper question to put to me in that form. After some discussion as to the propriety of the interrogatory, the ques¬ tion of Mr. Beck was reduced to writing by himself and propounded to the witness, as follows: Q. Did you know or believe, at the time the papers of Phelps, Dodge & Co. were brought by the man who brought them and his attorney, that the papers had been stolen or surreptitiously taken from the firm? Did you contract to pay them two thirds of w^hat you might recover, wdth knowledge of these facts, and did the Secretary of the Treasury pay you with knowl¬ edge or information that two thirds of it went to those parties ?—A. At the time the papers were brought to me by the attorney of the informer I did not ask him the source from which he obtained them, and he did not tell me. What I believed is perhaps what any one of you would believe under such circumstances. I did not contract to pay them at all. Under the law the man bringing the information to my office was entitled to one fourth of the not proceeds, no matter who works up the case. I was entitled to nothing, save such sum as they should voluntarily pay me, but they re¬ quested that I should put the case in my name and should pay them two thirds of the amount received, which I did. I do not remember that I ever told the Secretary whether the whole sum was to be paid to the man who had brought the information to my office or not. The ease was discussed pretty extensively in the papers for several weeks before this sum of money 84 CONGRESS AND PHELPS, DODGE & CO. was paid into court. Tlie name of tlie informer-the man who brouoht tliis information to my office— was printed, I presume, in every newspaper in the United States, and wms a matter of notoriety all over the world I sue pose the Secretary of the Treasury read the papers, and knew. I do, rot recollect ever having any particular conversation with him in regard to wdiether I was to retain any share of that money or not. Mr. Sheldon.— Who was tlie money given to?— A. It was awarded to Q. By the Secretary ? — A. Yes, sir. Q,. Hoav could he aw'ard it to you if lie knew the other man was the in- formei ?— A. I reported the case, and there was no adverse claim. It be¬ longed to me if there was no adverse claim under the law. Mr. Beck.— What is the name of the man, and what is the name of his attorney?—A. The name of the man is Charles F. Hervey. He had three 01 foul attoineys and counsel; they were associated together; I do not mow in what way, or in what form, or anything about that. Q. Which one came to you with the papers?—A. W^ell, sir, I think there Avere two of them that came Avith him in the first place. C- And brought the papers Avith them ’ —A Yes «ir Q. Who were they?-A. Dudley Field and Ethan Allen. , ■ much money did they get ?— A. I gave my check for two thirds 01 the money. Uleii ^ ^ ^nink it was made payable to the order of Ethan A lawyer in New York ?-A. Yes. sir. Q. Dudley FieMw.a,s one of them, too ?-A. Yes sir ■t =nti ly he came to ray office. Heis n|-]ved uy Field. I think there were two other lawversem- ii. wha 14 ,1“''’ U" "“"O- I couldn’t tell yon,sit, in ivliat Avmy they divided it. Ethan Allen°” Ethan Allen ?— A. I gave the check to Ltl an A Icn. He was anthoriEed to receive it. vou tell von n them, in any of their conversation ndtb rrh P-sence, that he Had oh- «ev:ft::;:rrr:r bn'4 Q. Didn’t von l-nr, +i ^ Biem, and I never asked him. see where they were torn SnnT’*' f the papers I had matched on ’ D^ ' ^ ^ torn out. There were lots of othe.'tn tliffifbook' AN EXTRAOllDINARY HISTORY. 85 Q, Did these lawyers know that, at the time they came to you and made that contract ?—A. I cannot tell you that. 1 was not admitted to the pri¬ vate consultations between them. Q. Did they never tell you?—A. I think not, sir. Q. Nor Hervey ?—A. I think not, sir. I never asked him any question about that. Q. How did you happen to look and see where the papers fitted ? What put you on that track?—A. For instance, one of these bills being in the same handwriting as the invoice in the Custom House, it would state E and a diamond 1, 4, x; cost in Wales thirty-two shillings; and in the Custom House invoice it would be thirty shillings. On the paper itself would be the date of the shipment and the ship it came by. I would get up the Custom House invoice of the same identical ship, take the mark, and trace the goods, and find it in the Custom House invoice. Then 1 would turn to their invoice book to see where it was copied in their invoice book, and I would take this paper, if it had been pasted on—as a great many of them were, on the margin—and lay it on there, and see where it had been torn off. That I discovered. Q. Y^ou say you had no reason to believe, from conversation with these men beforehand, that they had been stolen ?—A. I say these men had never told me that the papers were stolen, and I never asked them the question. They brought the papers to me. Q. They never told you where they got them?—A. No, sir; they need not. The papers themselves would indicate that they were the goods of Phelps, Dodge & Co. Q. And you now tell this Committee that you had no reason to believe, from anything that occurred with these men, that these papers were sur¬ reptitiously taken?—A. I do not tell them any such thing. Q. Have you not reason to believe it ? You either do or do not.—A. My dear sir, I suppose we all have more or less powers of reason, and I sup¬ pose those facts would point to certain other facts which are inevitable and conclusive. Q. Mr. Jayne, there is a very direct way of answering a question if a man is willing to tell what he knows. You either did or did not believe it. —A, Well, what I believed is not evidence; but what I believed I acted on. Q. You did know, before you drew the money, and before you divided it with these lawyers, that they had been surreptitiously taken from those books?—A. I knew they had come from those books, undoubtedly. I did not know how they had been taken. Q. Did you not know that they had been surreptitiously taken from those books, as well as you know that you are sitting in that chair, before 86 CONGRESS AND PHELPS, DODGE & CO. yon drew the money from the Secretary and paid it over to those men? Answer that question yes or no, or refuse to answer it.—A. I had no doubt those papers had come right from those books. Q. Did you not know that tliey were surreptitiously taken, and have you i not told this Committee they were? — A. I think not. Q. Just say whether you will answer that question or will not.—A, Yes sir; I believe that they came from there. Q, Why didn’t you say so, then? — A. Well, I have. CLOSING STATEMENT OF MR. WILLIAM E. DODGE. At the conclusion of Jayne’s examination, Mr. George Bliss, U. S. Dis¬ trict Attorneys for the Southern District of New York, came before the Committee (March 12th) and reviewed at length the working of the Cus¬ tom House laws, and detailed his own experience as an United States official in their administration ; his remarks being mainly in opposition to any legislative action on the part of Congress, looking to essential modifi¬ cations or repeal of the (then) existing statutes, and in direct antagonism to the conclusions and petitions of the various Boards of Trade and Cham¬ bers of Commerce of the country. In respect to the case of Phelps, Dodge & Co., Mr. Bliss also took the position that the compromise made by this firm with the Treasury Department was entirely voluntary, and, in fact, solicited on their part; that there was nothing of “terrorism” used as an agency for hastening a settlement ; and that the whole con¬ duct of the firm was, in fact, an equivalent to the admission of wrongdoing on the part of some if not all of its members. At the conclusion of Mr. Bliss’s remarks, therefore, Mr. William E. Dodge again asked permission of the Committee to speak in vindication of him¬ self and of his partners, and in reference to the points specially made against them by the District Attorney, and permission having been given, Mr. Dodge accordingly addressed the Committee as follows : Mr. Chairman and Gentlemen op the Committee— \Yith the consent of Mi. Schultz I will say a few words, which I deem necessary for my own vindication and that of my firm. I think the District Attorney may lave left ceitain impressions upon the minds of the Committee to which I desire to reply. The Chairman.— Proceed, sir. Ml. Dodge. In the remarks I made a few days ago I said it was not so muci the $271,000 that we cared about as it was the fact that those indi- AN EXTRAORDINAEY HISTORY. viduals who had received their shares of the moiety had continued down to this day, everywhere, to assume that Phelps, Dodge & Co. were guilty of fraud, and the effort of the District Attorney in his opening remarks has been to make that impression deep in your minds. He sought first to show that there was very great anxiety on the part of Phelps, Dodge & Co. in the matter ; that they complained that it was a case of terrorism, while there was none ; that they were very anxious to make a settlement; and this fact has been stated again and again as positive proof of their guilt. In addition to that they have stated, and the District Attorney stated to¬ day that we had admitted positively that we were guilty. Mr. Bliss. —Excuse me, Mr. Dodge, I did not say so. Mr. Dodge. —I beg your pardon, sir ; no other inference could be drawn from what you did say. Now, since the day that this matter was first brought to our notice, and we examined into the case, we have never re¬ fused to admit openly, everywhere, before friends and foes, that we had committed irregularities, and had unintentially made ourselves liable to the law ; but we never have anywhere, under any circumstances or in any position, admitted to any living man that we did it intentionalh^ Again, this $1,750,000, as I said before, was the terror held over us—the pistol at our ears. I have so stated before, and I say it now, sir. And I will state the reason that we were so anxious to have it settled—why 1 came to see Mr. Boutwell two or three times. As I stated the other day, he treated us kindly, and, perhaps, if we had taken his advice we should have done differently, but we believed that if we left the matter open wo did not know who would settle it, as Mr. Boutwell was on the eve of his election to the Senate, and we were anxious to have it settled, because we would rather pay $271,000 than have the Government of the United States holdover us a judgment of $1,750,000, and have that telegraphed the world over, and then run the risk of getting it reduced. It was a large sum to have hanging over us, and if we had had to pay that amount what would this special agent have received ? He would have received between two and three hundred thousand dollars ; my friend sitting here (Mr. Bliss) would have received over $17,000, and the Collector over $100,- 000. We were not prepared to have such a judgment as that rendered against us, and to trust to any living man for a settlement, with such in¬ fluences surrounding him. That was the reason we were anxious to have it settled, even by the paying of $271,000. I stated that it was a case of terrorism, and so it was, when there were not less than seven eminent lawyers engaged on the other side, and constantly contriving to see how they could catch us in the matter. I felt that, under these circumstances, entrapped as we were by the law, we were fortunate in settling even by CONGEESS AND PHELPS, DODGE & CO. the payiDent of $271,000 for an alleged fraud, not known to us, of $1 600 Never, until this man stood here to-day, have we been able to find’out anything about these nine invoice.s. It is the first time that we could find that out. We agreed that we would pay the amount of the aggregated items that they said were undervalued, but when the sum cameto\sit was monstrous, and we did not understand it. But when the report comes out it says, “ Besides two whole invoices that were confiscated be¬ cause the charges had not been added.” Now, I have the law and the de¬ cision of the courts, that wm sent to our friends in Penang, saying that in case these goods were swmrn to at the port where they started from and went to another for convenience, the date of the voyage commenced at the time when they first sailed, and purposely we had put on the invoice (he says it was put across the invoices) that the charges were not added. Did that look hke fraud? No, gentlemen, there is an effort making to charge us with fraud, but I stand before the people of the United States to-day innocent, and so does ray firm, ot any charges -whatever, except such as are made b} these men, who want to sustain this moiety system, and make out that our ca.se was a very bad one, in order that they maj go on with their moieties, i 1. osTER. I think you stated, -wlien you y.veve here the other day, Mr, 0 Cj,e, that there were lawyers, members of Congress, who were acting as counsel for these parties ? Mr. Dodge.—I did say so. ■ Foster. ell, I find that this Committee and myself have been sub- J " criticism becarrse we brought out the name of only one such mem¬ ber, while there were others. •r. f I ^ fo ppeak of two. I have no hesitation in r 1 iOq w 10 t ley were, after all that has been said before this Committee. ur-T naming them heretofore, but, if the Committee wisli, 1 have no objection. TI.e CHMRMAN.-You may answer tlio question, the sill ■ T there is no doubt in tiio Coiuiiiittee’s niind on he cl , en 1^3-special agenttW Iutrs 7;‘"r“ir'^ Butler as counsel I will tee Ifl r ' t i" eousultatiou with tills tliinw sli irheu for two days tiie question hung wiietlier unh' rafd e ■ ''“”S -'.IPU on the fact that Mr. never would eo 1 “ enormous that, so far as he was concerned, he Phelps, Dodge A lU,Ts' t'°‘n I oeiy Wish lie had stn:,: Titt'e'rayM:,;:::^ Ml-, Foster. Is that all you k„„w„b„„tu?' a I. ODGE. lliat is all I know about it. AN EXTRAORDINARY HISTORY. REMARKS OF HON. JACKSON S. SCHULTZ. From the remarks of Hon. Jackson S. Schultz, Chairman of the Com¬ mittee of the New York Chamber of Commerce, who followed, before the Committee, Messrs. Bliss and Jayne, and reviewed at considerable leng-th the statements of these two Federal officials, are made the following ex¬ tracts, having a more or less direct bearing on the case of Phelps, Dodge & Co. : Mr. Chairman— T believe that you, gentlemen of this Committee, wilt agree with me that the special agent of the Treasury Department has brought against the Custom House in the City of New York a stronger in¬ dictment than ever was framed and presented before. And I believe you will agree that if we can rely upon his statements as to the condition of things there, it was high time that an unsophisticated youth from the west¬ ern part of the State of New ITork, “ with hay seed in his hair and gras.s- hoppers upon his garments,” should come down to morally revolutionize our City and our Custom House. In the year 1869 there came down to New York this youth, having, doubtless, all the qualities that he described to you as the qualities so necessary in an officer of this kind—so necessary in an officer who should draw from the public treasury or from the citizens of New Yoik |lt)0,000 a year for his services. He came down there and labored with us. He made reports to the different officials of the Govern¬ ment, especially to his superiors. Alter laboring for four years, what was the result? He told us he made those reports, and they were not heeded. He charged thai men in office received bribes, and that they did all sorts of irregular things, and yet he could not get tliem displaced. And, therefore, he says, “while thieves are permitted to remain in office, I look upon the seizure of books and papers as little less than highway robbery.” Thus, disgusted with all his efforts, he throws up the sponge and resigns. What we are to do now without his moral influence is beyond my comprehension; indeed, I scarcely know what we did before, or how we were able to collect any revenue at all. We went on very comfortably, however, before that time, and very little trouble occurred, but we must have had robbers with¬ out number. Now, I wish to call the attention of the Committee especially to his state¬ ments, and 1 shall try to keep within the statements made by him. He said that within his experience he had had sixty-one cases, and that fifty- two of them were made by officers who had bribed somebody—fifty-two out of sixty-one—and in alt instances he has presented all the facts showing this state of things to his superior officer, who may have been, in this case. 90 CONGRESS AND PHELPS, DODGE & CO. the Secretary of the Treasury, certainly not the Collector, inasmuch as he said that, for the sake of convenience, he did recognize the Collector to bo his equal, although in law and in theory he was the superior of the Cob lector, and that his only superior was the Secretary of the Treasury. There¬ fore, if we are to believe him, if we believe him at all, his reports are on record m the office of the Secretary of the Treasury, in Washington, to the efiect that these fifty-two men have been accepting bribes from merchants and yet he did not tell us that one of them had been removed, although the inference may be drawn that some of them had been displaced. Mr. Kelley. He said that some of the earlier cases that he referred to had removed. Ml. Schultz. But he did not .‘-pccify, and left the impression that they weie all guilty. Now, I submit that on that showing the Custom Houseis in a bad condition. But more than this, this special agent absolutely c larges that he accepted information from these gentlemen, and allowed t lem to tuin State’s evidence, and gave them a part of the moieties—re- ai ed them by giving them a share of the moieties. Was there ever so pitia c a condition of affairs as that? And yet these gentlemen are re¬ amed in public office. Now, gentlemen, I do not think I state the case too s long y. would appear before you this afternoon as a defender of the 1 ehent administiation and of the Custom House against such charges,it leir representative were not here to do it better himself. I do not believe la s a e of things which has been represented here exists, but if it out ' ^ special committee to New York to find wluVi" Soing on there, and you cannot too soon change the system ic 1 entraps so many merchants, and does this great wrong not only to the n n n has been put by one “ sfril- the information obtained is good eiiougli to sands of lantvvith; that it is good enough to take hundredsoftliou- brill on ' P-l<‘^nts, even the larges promntlv th*pvi*^V! ^ow York, wanted to get tlieir invoices examine! to work^on young man to take them home at night,o work on them somewhere over night, in order to get them tlnough AX EXTKAOEDIXARY HISTORY. 93 Tliat, lio^vcvcr, was rof^ardcd as wrong, and it was discontinued. There was an order issued that it .should not go on, and the employes of the Cus¬ tom House felt very much aggrieved. I know that I had two or three young friends in the Custom House who were in the habit of making five or six hundred or oven a thousand dollars a year beyond their salaries by over work, and they complained of the change, and two of them quit the Custom House for the very reason that they could not live on their salaries without this addition to them—and they were the best men that were in the Custom House, too. Now, as to this case of Phelps, Dodge & Co. What arc the facts ? They have an immensely bulky business. They are carting all the time from their vessels. Somebody has got to keep the storehouse open for them, and they have got to pay for that service. Suppose it is a cargo of tin, and it is damaged by salt water—you know how readily salt water damages tin— now, this has got to bo exposed and cleaned off at once. It cannot wait from Saturday to Monday; it has to be done at once. T happen to have lived in their neighborhood for about twenty-five years, and I know that their trucks are going sometimes all night. Now, suppose that firm should say, “ We are very conscientious. We will not pay for extra work; and if our men won’t do extra work without extra compensation, then we will quit the business.” But they don’t do anything of the sort. When they have biisine.ss to do they do it, whether it is done by the Government men or their own men, and whenever it becomes necessary to employ extra labor they employ it, and pay for it, and when they do so they enter it upon their books. A merchant that is honest cannot afford to have a private account, and puts it right on the cash book. No man can spend a cent in a well regulated house that it does not appear on the books, and in all these cases if you were to examine, I will guarantee that you w’ould find these expenses regularly entered on the cash account. This special agent held up to you copies from the ledger of Phelps, Dodge A Co., charging to this ship and the other ship $5, $10, $15, $20, as if that were something dreadful. There is nothing remarkable about that. I should expect to find it charged Just exactly in that way in an honest house. I submit that that is no evidence —yes, it is evidence—evidence that there was no fraud intended—^in the fact that the charges were put there on the books, subject to the inspection of every clerk in iheir employ. Do you think that Phelps, Dodge & Co., with sixty, seventy, or eighty clerks—do you suppose that any merchant can afford to put an}’ dishonest transaction on his books, where it is subject to be known by men who are liable to expose him, not to the Government, perhaps, but to his customers? If any wrong were intended would it thus be laid before the eyes of men who might use it to the merchant’s disad- 94 CONGRESS AND PHELPS, DODGE & CO- vantage whenever he did anything that the clerk thought wrong—not take him into partnership, not increase his salary, or do any one of a hundred things that clerks complain of? I think I need not do more than state this proposition. Now, I submit that there is no evidence before you produced by Mr. Jayne that any of these parties have done anything more than m own house and every house in the City of New York does. Of course the amounts paid by Phelps, Dodge & Co. would be larger than the amounts paid by others, because their business is very large and bulky, and it takes a great many men to do it, and I should be surprised if they did not have hundreds and even thousands of dollars to pay each year for extra services in this way. Now, I want you to remember this. We have been called off here again and again, and have had a great many hypothetical cases, and a great many conundrums put to us that I cannot solve, but I wish to call the attention of the Committee to the fact that when Mr. Jayne presented him¬ self here to defend this moiety system he told you that he was going to present the pivotal case. I wms not present, but I saw his language reported, and by “the pivotal case” I take it for granted he meant the case around which all the others turn—that it w^as a fair “ specimen brick.” Now, gentlemen, you have examined this case with care, and I am glad you have. There are no gentlemen on this continent better acquainted with the Phelps, Dodge & Co. case than you are to day ; and if that is a pivotal case what do you think of the rest of them ? Many of you are law¬ yers. I ask you whether, if you had been the advisers of that firm, with your knowledge of the law and your present knowdedge of the case, you would have advised them to settle? You say no ; but the lawyers that they selected did advise them to settle, and they are supposed to know the law. I have no authority for saying, and, in fact, that firm has always denied it to me, but I submit the proposition that when we get to the bottom of this whole matter—it may be years yet, but I hope it will be during the lifetime of some of us—it will turn out that a legal conspiracy —if that is not a misnomer—that a legal conspiracy has existed in the City of New York, more or less criminal, and that, as you look at the facts of this case and scrutinize them, you will see that I do not misjudge. Here were gentlemen in the law—three or four of them—who understood the law perfectly, competent to understand it as it has been presented to you, and you will wonder that they could have advised that settlement; yet they did. As the gentleman tells you, they ran around the streets at night, late and early, pleading for settlem-ent ; and consider the theatrical arrange¬ ment of the gentleman coming Jo the attorney’s office and saying, “Sir,I won’t come in if you go to offer me back my check ; don’t you offer me AN EXTRAORDINAEY HISTORY. 95 that check and then I will come in I” That is “ too thin.” It don’t answer the case. I do not charge that Colonel Bliss was in this conspiracy, but I do say that, with my knowledge of this case and of the counsel con¬ cerned, I cannot comprehend how they could have so persistently advised a settlement. I happen to know of some other cases where such men as William M. Evarts have been employed as counsel, and they have never advised a settlement. They have advised fight—resistance—and they have some of those cases now; and, in my judgment, they have advised wisely. In one case which I have heard of the parties insisted on settling because they settled for a mere nominal sum ; but even in that case Mr. Choate told me it was contrary to his advice, against his protest, and the other parties must take the entire responsibility. You recollect what was said to us the other day by this gentleman (Mr. Jayne). He described to you the situation in the Custom House. He told 3mu what influences were at work, and how strenuousl}" he had served his country fifteen hours a da}', and had broken down physically, mentally, and perhaps morally ; but, said he, “Now we are on the home stretch.” Thank God for that ! I don’t know but he has helped us to get around on that home stretch. I begin to feel myself that we are on the home stretch. I begin to think I see day¬ light, and I think it likely (I want to be generous) that he has helped us to get around to this fortunate position; because, without a strict technical enforcement of the law, we would probably have been groping around yet, as we have been for several years past. And who would have been struck? Only a few German houses, without friends ; a few who could not excite public attention. But when they struck other men who had friends, that brought relief, and enlisted your sympathy, as it will that of the whole country. General Butler told me here that the people were not with us. Well, I am not a very good judge of what “ the people ” are doing, but I know that justice is on our side, and the people finally get on the side of justice, and I believe that General Butler is wrong. But Mr. Bliss said to you to day, very ironically, “Why don’t these big merchants of New York come here and tell of their sufferings ?’’ Now, I had heard that there were three or four merchants in New York who were standing out from this movement, saying, “We have not been struck ; we are holier than you !” I went and saw one of them on the subject, and he said to me, “ No, sir- I never have sympathized Aviih this action. I think it degrading, both to the Government and to the man.” “May I say so?” I asked him, and he answered “Yes.” I wrote to another gentlemen who was supposed to be willing that these things should go on. I wrote to him and called his attention to “ carloons.” In less than two hours he was in my office. “Who told you about my cartoons?” he asked. “ Nobody,” I said. “I 96 CONGRESS AND PHELPS, DODGE & CO. know that anybody who is engaged in that business must be affecW' that way.” He absented himself for four Imurs, and then he returned ! I sa.d,m substance, '1 am in up to here” (his neck); and he has been W to make his peace with the Custom House ever since. I wish him sucLs and 1 think he is more likely to be .succes.sful than he would have been li few mouths ago. I come now to a case which I will mention by name I understood that Mr. H. B. Claflin, w'ho is my personal friend, liad said in an examination before a Congressional Committee, that he tliouo-ht tliere was no danger for an honest man, and I understood that he had said tliat this committee of merchants that was going on to Washington need not undertake to represent him; and inasmuch as I was going to Wasliin<^ton as a member of the committee, and as I did not want to misrepresent any- body, I wrote him a polite note, saying, in substance, “ If you desire to bo counted out I will say so to the committee ;” but at the .‘^ame time 1 called us attention to certain circuimstances and facts, which he handed overto s impoitiiiQ cleik, who soon told him, “ Mr. Schultz and those gentlemen are right about this, and you are not exempt at all.” “Do you mean to say, says J\lr. Claflm, “ that a single item vitiates the whole of an invoice?" ^ Gertamly. “ Oh, that cannot be.” “Well, if it is true, what then?” e you go down and tell Schultz to represent me, too ” [Laughter.] ow, .say t us. that wdienever I am challenged to apply these tests I consequences what they may. When one man up to be better and holier than his neighbor, he must have : honest Ids ]uirpose, can escape ; and so belie?- caRs ^cn a man undertakes to stand up and brave what lie uccoiiTit f m he is not affected, we will ask him to that T 1 ,*^^ ^ about public opinion: I clonk know Jbneius whn press does not amount to' much attorney, the palite iafluenco i.s at work writin-r fl t'h »*'Public opinion, forsoiM ill the p-iners b,u -n ^ ® expressions of opinion which appeal opinion reilly’is on Tld'lr^^^^ care what it is—and if vve dn ' } T for ms—we do not dent and irrespective of ll ^^owyou that public sentiment, indepen- ined as follows ■ ®uiu appeared before the Committee, aird was exaW' AN EXTRAORDINARY HISTORY. 97 Mr, Wood.— You mentioned, Mr. Dodge, in reply to Mr. Foster, the name of another member of Congress, besides General Butler, who was in New York at the time of your settlement—Senator Gonkling. Will you please state whether, in your opinion he was there as counsel, or in any capacity from which he derived any pecuniary compensation or benefit, or in what way you suppose he was there. Mr Dodge.— I never had the most distant idea that he was there profes¬ sionally, but I believe he happened to be in New York at the time that this thing was in process of settlement, and was in council with some of the other gentlemen there, particularly I believe with reference to the position then occupied by Mr. Laflin. I have never mentioned his name before in the matter. My own impressions were that he had no pecuniary interest in it in any way. I have always looked upon it as a mere accidental visit on his part to the city. Still the fact that he was there in connection with the other gentlemen showed what an array there was against us. STATEMENT OF HON. NOAH DAVIS, IN REFERENCE TO HIS CONNECTION AS U. S. DISTRICT ATTORNEY WITH THE CASE OF PHELPS, DODGE & CO. The connection of Hon. Noah Davis with the case of Phelps, Dodge & Co., and his proceedings in relation to the same as U. S. District Attor¬ ney (an office which he then filled), having been reviewed by his suc¬ cessor (Mr. Bliss) in his speech before the Committee, March 12th, in a somewhat critical and disparaging manner. Judge Davis on the 19th of March, subsequent, appeared before the Committee, and submitted the following statement : “What I say now,.Mr. Chairman, Avill relate particularly to my connec¬ tion with the Phelps, Dodge & Co. case, and I shall make it as brief as pos¬ sible. That case arose eight or ten days before the expiration of my term of office as United States Attorney for the Southern District of New York. I had sent forward my resignation, to take effect on the 1st of January, 1813, having been elected one of the Judges of the State Supreme Court, and my judicial term of office commencing on the 1st of January, 1813. I was very much engaged in the effort to close up my business, both official and professional, so far as I could, before leaving that office and before entering on the other, which, by the constitution of the State, would pre¬ clude me from doing any business as a counsellor or attorney in any of 7 98 CONGRESS AND PHELPS, DODGE & CO. the courts of the State. My first knowledge of the Phelps, Dodge & Co. case was this : I received, about eleven o’clock in the morning, a note from Mr. Laflin, the naval officer at New York, which was brought to me by a messenger, who came with a carriage, asking me to drop any business I had on hand and come immediately to the Custom House with that mes¬ senger in the carriage, the note saying that my advice was desired in a case, the most important that had ever arisen in the district. That is substantially the language of the letter. I did as requested ; I went to the Custom House in the carriage which had been sent. I found in Mr. Jayne’s room Mr. Laflin, Mr. Cornell, the surveyor, and Mr. Jayne. Mr. Laflin said to me that they had sent for me to advise in a case which had been under investigation by Mr. Jayne, against Plielps, Dodge & Co.; that they wanted, before taking any further steps, my advice whether or not the investigation by Mr. Jayne disclosed facts which would justify further proceedings. I went into an examination, Mr. Jayne producing a lot of Custom House invoices, in respect to which the alleged frauds Avero claimed to have been committed, and certain papers, which he called duplicate invoices, which had been furnished to him, as he said, by some clerk who had previously been in the employment of Phelps, Dodge & Co. He also presented me with an affidavit made by that person—an affidavit which I have never since seen, and of the contents of which I have only a general recollection. The substance of it was, according to my recollec¬ tion, that that firm had been in the habit, for a long period of time, of re¬ ceiving duplicate invoices, one of which varied from the other ; that he had had charge of them, and he said, if I recollect aright, that he had been in¬ structed to take those invoices and destroy them, and that, instead of doing so, he had kept them, and that they were, or some portion of them were, furnished by him to the Government officer. I looked through the papers that were there with a good deal of care. Mr. Jayne showed them to me, and pointed out the alleged discrepancies in several entries, in res¬ pect to which he claimed that frauds had been discovered. After spend¬ ing much time in looking at them and seeing their general character, I told the officers that were present that it was quite apparent that the law had been violated by that firm in making the entries of those goods at the valuation put upon them by themselves, instead of making their invoices so as to show the actual cost—-the purchase price—which the law re¬ quired, and that, in my judgment, it was a case wdiich would justify them in pursuing the investigation. “ It was then suggested by Mr. Jayne that a warrant should be imme¬ diately obtained, and the papers and books of the house seized. I told him that, so far as that was concerned, I was willing that only this course AN EXTRAORDINARY HISTORY. 99 should be pursued ; that they might prepare the papers for the applica¬ tion for a warrant and bring them the next morning to my office, to myself personally, and that I would take them and go to the Judge personally and make the application for a warrant, and that if a warrant was granted I would keep the control of it, coming to the Custom House in the morning with it and with a deputy marshal ; and that the collector or some other of those gentlemen should send to Messrs. Phelps, Dodge & Co., and re¬ quest the members of that firm, or some of them, to come to the Custom House, so that I could have an interview with them. It had got quite late at this time ; it was after five o’clock in the afternoon, and the business ofiQces were all closed. Mr. Jayne was extremely anxious that the warrant should be in condition for immediate service, because he said that he was so far satisfied in his own mind that fraud had been committed that if the house got information that a warrant was out, the books and papers might be destroyed or put out of the way, and I told him that, to guard against that, the warrant could be there present at the time of the inter¬ view, and if the firm was not willing to permit a full inspection of their books and papers, the warrant could be ready for service as expeditiously as those gentlemen, o/any of them, could go back to their business house for the purpose which he feared. “Mr. Jayne came up the next morning with the papers prepared and sworn to. They were incorrect—not complying as I thought with the statute—and I made alterations on them and required them to be resworn to, and I then went before the Judge, not letting any of the assistants in my office know that such an application was pending. My custom had been when those papers came to me, after looking over them myself, to ask one of my assistants to take them before the Judge and apply for a warrant upon them. This was the only case, to my recollection, in which I had ever applied for a warrant personally. I went with the papers to the Judge, who examined them and granted the warrant, and delivered it to me. I then requested a deputy marshal to go down with me to the Custom House. We went there and Messrs. Phelps and Dodge were sent for. The elder Mr. Dodge, the senior of the firm, and Mr. James, a mem¬ ber of the firm whom I had never met before, came there together. We saw them in the ante-room of Mr. Jayne’s office. Mr. Jayne and myself, Mr. Dodge and Mr. James being present. I stated to Mr. Dodge what pro¬ ceedings were pending ; that an investigation had been had into their in¬ voices ; and that I had been called down there the day before, and had said to the officers that, in my opinion, it was a case which justified further investigation ; that I had requested of them, before any further steps were taken against the firm, that the members of the firm should be sent for, and 100 CONGRESS AND PHELPS, DODGE & CO. that I should have an opportunity to have an interview with them. I told them the nature of the charf^o.s. The.se gentlemen were very much sur¬ prised. ihe elder gentleman, Mr. Dodge, did most of the talking. He ex¬ pressed great astonishment that anything of that kind should be allegd against his house, and [»rote.sted hi.s entire innocence and want of knowl¬ edge that anything of the kind had ever occurred, and declared his readi¬ ness to pay any dutie.s which the Government had lost by reason of any errors, mistakes, or oversights of his firm, and akso to pay any penalties that might have been incurred. Mr. James also made a like protest as to his entire innocence and ignorance of what was alleged. They wanted to know the particular grounds of the charges. Jayne got the statute and pointed out the law, and told them the consccjuences of its violation. He took the oath made at the Custom House by owners, and showed them wheiein the oath which a person in their house had been accustomed to make had varied from the oath required by the regulations as the owners’ oath. I told Mr. Dodge, in the course of the conversation, that a further examination of Ids books and papers would be required, and that a warrant had been issued, which I should witlihold in case they were willing that the examination should be made without any service of the warrant. Mr. Dodge at once expressed in tlie fullest terms Ids entire •udllingness to have his books and papers examined, saying that everything in that establish¬ ment was at the service of the Government. I then said to him that there would be no occasion for the service of the warrant; that I should take the warrant back to my office and withhold it; that Mr. Jayne would accom- pany him to his store, and that they could deliver to him, Mr. Jayne, such books and papers as he wanted. They expressed tliemselvcs satisfied with tliat aiiangement. Jayne and one or two officer.s went with him to the store and I returned to my office. In relation to what occurred tliere I feel bound to say that, while I was present, there were no throats except wluit might be implied by the exhibi¬ tion of the statute and the pointing out of"the penalties which Jayne insisted, with a vehemence natural to him, they had subjected themselves to, saying that they had forfeited a very large amount, stating it, in round numbers, at over a million of dollars; and stating, also, that, in taking the oati they had subjected themselves to the penalties of perjurv. Bejmnd t lat^ theie were no threats or terrorism (if that word has any particular mgnificatiori) u.sed, to my knowledge ; but in a late conversation with Mr, Dodge (It IS but ju.stice to him that I should say something more in regard to what he said on that subject) he has stated to me that he bad an inter¬ view tie next day with Mr. Jayne, when I wms not present, and that he lad probably mingled in his statement here, what was said at the two AN EXTRAOllDINARY HISTORY. 101 interviews ; but, on tliat occasion I have stated substantially all that occurred while I was present. I went back to my office. I was, of course, very much engrossed in business. I heard nothing more of these proceedings, except that a young man who is in Mr. Jayne’s employment came into my office once or twice, according to my recollection, and said that Mr. Jayne was making discov¬ eries beyond what he had expected. I heard nothing during the interval up to the 30th of December except that, and I saw none of those parties to converse with in reference to the case. On the 30th December, in the afternoon, a message came for me, inviting me to go to the Astor House, to Mr. Jayne’s rooms. Mr. Jayne was living at the Astor House with his family, occupying rooms there. I went to the Astor House and found Mr. Jayne, Mr. Wakeman, and Mr. Knox, of the firm of Fullerton & Knox. These gentlemen were together in the room. Mr. Jayne stated to me that I had been sent for with a view to see in what manner the case could be closed up without delay. He stated to me that a proposition had been made to compromise the case at a sum which he named, which was considerably less than two hundred thousand dollars. I think, if my recollection serves me, that it was about $150,000, but the precise figures I have not in my mind. He said that that proposition had been made, and that he had resolved not to accept it, as it was not enough. I then asked him to show me the papers, as he had made up the case from his examination. He showed me the papers, saying that he had discov¬ ered, and, as he said, substantially proved, that those entries had been made in respect to invoices amounting to over a million dollars. He had not then the amount of the items that were especially affected by tlie frauds, but the aggregate amount of the invoices in which those items were con¬ tained. He showed to me, or repeated to me, substantially, his statement of what was contained in letters and in papers which he called duplicate invoices, though I did not see them, and was under the impression at the time that they were, in fact, actual duplicates of the invoices entered. Those which I had seen the day I was at the Custom House were, in their general character, not exactly duplicate invoices, but they wore, in a great degree, letterpress copies containing items, and accompanied by notes showing that the goods were purchased under such and such contract, or something to that effect. I looked into these papers sufficiently to see that my impression that there had been a violation of the statute was well founded, and I said to these gentlemen, the counsel who were there, and Mr. Jayne, in substance, that the only way in which this case can be settled at once, without refer¬ ring it to Washington in order to have the approval of the Secretary of the 102 COXGRE8S AND PHELPS. DODGE A CO. Treasury, will be for the collector to adopt, what has been heretofore adopt- ed, as I understand, at the Cu.stom Hou.se, one of two modes. One is to select certain invoices equal to the amount that may be agreed upon as the compromise, and direct a suit for the entire amount of those invoices. The other course, which has been adopted, as I understand, in one or two instances, is to select from all the invoices the items f^pecially affected by the alleged fraud, and make the value of those items the basis of the com¬ promise. Mr. Jayne said that coarse had been pursued by the collectors in several instances. Mr. Jayne was then requested to go through with the invoices and select those items and see what they would amount to. this suggestion was made not by me, but by the counsel who were pres, ent representing the firm of Phelp.s, Dodge A Co. Mr, Jayne sat down by the table and I sat down, looking casually' through the papers in the room. I^Ir. Jayne went through the various items and reported that the approxi¬ mate aggregate amount was $260,000. While Jayne was making the com¬ putation the other gentlemen had retired to a room in which I understood Mr. James and Mb. Dodge were, although I did not .see them at all on that occasion. Jayne made out an aggregate sum of two hundred and sixty thousand dollars and stated it to me. I said to him, " Mr. Jayne, they nevei will pay any such sum.” “Well,” said he, “you will see that they will. The gentlemen were sent for and requested to come in. They came into the room, took the papers from Mr. Jayne, looked over them, and very soon went out of the room again, going, as I supposed, to see their princi¬ pals. They returned in a few minutes, saying, “ We will consent to pay tbite .$260,000. I was then requested to go to my office (it had got to be quite late in the afternoon) and to remain there at least an hour, they say¬ ing that they would go to the collector and obtain a tetter directing me to commence a suit for $260,000. They wanted me to remain at the office, so that if they came there with such a letter I could issue a capias, and Mr, Wakeman could indorse his appearance at once and deliver a check for the amount—in substance giving a cognovit for judgment, so that the matter should be closed up the first thing next morning. I went to my office and waited there for an^ hour. I should add, however, that it was said to me lat 1 , by any accident, they could not find the collector at his office, I siou c tieiefore take a capias to my house, and that in the course of the evening, ,f I were not in the oflice when they got there, they would come o my louse with the check and indorse the appearance on the capias in the same manner. I waited at the office about an hour. It grew quite ai V, anc , as they did not come, I looked up a capias and went to my house. 1 heard nothing from them that night. The next morning I went down to my office. I had an appointment with Mr. Bliss, to be there at 10 or 10| AN EXTRAORDINARY HISTORY, 103 o’clock, for the purpose of putting him in possession of the facts in a num¬ ber of cases then pending in the calendar ready for trial, and into which he would come on the opening of the court the following week. He came there at about the appointed time. After we went through those cases, spending two hours at least in going through the various cases, and in my advising as to the facts and points of law on which the cases depended, (they were all Government cases), and while I was sitting there with him explaining these matters, a note from Mr. Jayne was brought to me by a messenger. I looked at the note and told the messenger that I would come down presently, and then I went through the business with Mr. Bliss. AVhen I got through the business with Mr. Bliss I said to him, “I am now going to the Custom House, I suppose, to close up the heaviest case that has ever arisen in this district. The terms of the settlement were arranged last evening, and I supposed that under the arrangement the matter would have been closed up last night, but it has not been done.” Now, I said to him, “Mr. Bliss, I do not wish you to be under the impression that I have neglected business which I ought to have attended to in this office, just as I am going out for the purpose of hurrying through a matter that would give me a heavy fee, and I suggest this to you : that you go down with me to the Custom House ; and that we both participate in closing up the matter and that you take half the fee.” He seemed to be very much sur¬ prised when I made this proposition to him. He started out of his chair, walked to the mantelpiece, stood there a moment, and turned to me and said: “Judge, since you have made that proposition I feel bound to say to you that that case is not going to be closed to-day. I learned last night all that had been done at the Astor House. I was with the collector at his home till a late hour. They have been dealing double with you. Some¬ body, I will not say who, has been carrying water on both shoulders. It is of no use fur me to go down with you, and I think I will not go.” 1 understood, at once, of course, what had transpired. He said no more to me on the subject, and shortly after left, and I went very soon to the Cus¬ tom House. On inquiring, I was told that the Custom House officers, the collector and others, were in a private room, I think connected with the naval office. I went there and found the collector, the surveyor, the naval officer, Mr. Jayne and another person in the room. Mr. Jayne said to me when I came, “ Judge, we have sent for you to inquire-” Mr. Dawes. —Do you recollect who that other person was? Mr. Davis. —I do not think I ought to name him, except to say that it was not the person whom you possibly suppose it was. It was not Mr. Butler. It was a gentleman who, I presume, had no connection with the case. I have no personal reasons for not naming him. 104 CONGRESS AND PHELPS. DODGE & CO. Mr. Dawes. — I had no reason for intimating in the inquiry which ] made that I supposed it was General Butler. Mr. Davis.— I suppose not; however, it was not General Butler. It was a gentleman who was, 1 suppose, present by accident, and whose name has not been mentioned in this matter, to my knowledge. 1 presume that he had no connection with the case.* Mr. Jayne told me that they wanted information as to wdiat had been the ruling of the courts under the statute of 1863 in regard to the conse¬ quences of the violation of the statute — whether it affected the whole in¬ voice or whether a portion (^f the invoice only, as to which frauds were alleged, could be treated as forfeited. This is the substance of the question which he suggested. 1 said to these officers then present, “Gentlemen,! am willing to give you any advice that you may think proper to call on me for, but with this understanding, I w'ant to be distinctly understood, before I say a word more about this case, that I will not have any connec¬ tion 'with any fee. The fee is to go entirely to my successor, whether the case is settled to-day or hereafter. I will have nothing to do with that,” I then said, “Now I wdll answer your question, so far as I understand the decisions. They are to the effect that the entire invoice is to be treated as forfeited, although I have understood that a decision has been made by Judge Clifford, in some case in Maine (an opinion which I have never seen), that the forfeiture may be treated as limited to the articles actually affected.” I recollect that I went on further to say that, in my judgment, that would be the common law construction of the statute. Mr. Dawes. —What would be the common law' construction? kir. Davis.- — The common law construction w'ould be, in the milder sense, in case of doubt applying it to the forfeiture of the things actually affected; but that the construction wdiich the judges have ahvays given to the rev¬ enue law was that it was to be more strictly construed for the benefit of the revenue. I recollect that I referred to the Cliquot wdne cases, in w'hich the court discussed the question as to the proper construction to be given. I said to those gentlemen also, “ Nowq feeling myself entirely disembarrassed of all interest in regard to fees in this case, I will also say to you that those gentlemen (the counsel for Phelps, Dodge & Co., wdiom I had seen in pass¬ ing below) arc extremely anxious, as it seems, to have this matter com- * Reference, contrary to Judge Davis’supposition, had been previously made during the hearing to the circumstance that Roscoo Colliding, a Senator of the United States from the State of New York, was present at one or more of the conferences of the Custom House offi¬ cials in reference to the settlement of the case of Phelps, Dodge & Co. AS EXTRAOEDINARY HISTORY. 105 promised on the terms proposed, and I want to saj/ to you gentlemen, wlio are intdrested in this question, that in ray judgment, if you are governed by your own interests, you had better accept the sura offered, for no jury on earth will ever give a verdict in this case for any such sum or for a tithe of it, and probably no jury will ever give a verdict in the case favor¬ able to the Government unless on special direction of the court,” and 1 gave my reasons for that opinion. On my way out I saw the counsel for Phelps, Dodge & Co., Mr. Wakeraan and Mr. Xnox, and I said to them, “Gentle¬ men, your case is not going to be settled to-day.” “Not settled!” said Mr- Wakeman, “ I think it is.” “ Certainly it is not,” I said. They persisted in wanting to know why, and 1 told them there had been some hitch in the matter about the fees of the district attorney; but that I had seen those gentlemen and had told them that I would have nothing whatever to do with the fees, and therefore supposed that I had removed that obstacle, if it was one. I said, “ If you can induce them to accept your offer of compromise, well and good. I have nothing to do with the fees.” Mr. Wakeman said that that was a very great injustice toward me, and that it should not oc¬ cur; that the case was going to be settled, and that I should have the fee. I said, “ I have nothing more to do with the matter, and .shall have no fee in the case.” He said, “You shall have a fee in the case, oven if we have to pay it ourselves. We would rather pay a double fee than to have you, after the connection you have had with the case, treated in that manner.” I said, “No, nobody is under any obligations to pay me any fee.” I went to my office and heard nothing more of the case until 1 heard subsequently to the 2d of January (the 1st of January being a holiday), that a letter had been sent to the district attorney to commence a suit for a million of dollars, and that an offer of compromise had been sent in to pay $260,000. I went to my judicial duties after the 1st of January, and had nothing more to do with the case. I saw neither of the counsel nor any one else con¬ nected with it until some days afterward; Mr. Dodge came to my house de¬ siring to talk with me about the case. I said to him, “Mr. Dodge, you know that my relations to the case have been those of attorney for the Gov- ment, and of course I can give you no advice, as counsel, and can say nothing about it in any professional capacity at all.” But after he had talked the matter over very freely, giving me his version of the case, and stating the facts as he claimed them to be, I said to him, “ Mr. Dodge, while, as I told you, I cannot give you any advice as counsel, I will say this to you, precisely as I would if you were my own brother, that I think you ought not to pay one cent in this case, and in justice to yourself and your house you ought to fight it out to the end.” He then gave me his reasons for going on with the settlement. 106 COXGIIESS AXD PHELPS, DODGE & 00. That ends my connection with tlic ca.se almost entirely. 1 do not recol¬ lect hearinp; anything more of any consequence about it until I was re¬ quested by Mr. Dodge, after the settlement had been made, to write a letter, which letter I wrote and it was publi.shed. I have omitted, however, to state one thing, and that is, that in the examination of the papers at the Astor House, I asked Mr. Jayne if he could show me how much had actu¬ ally been lost to the Government by reason of these violations of the law. Ho said that ho could, and he fitrurod it out, and said that it was sixteen hundred and odd dollars. I said to him that I was surprised that the amount should turn out to l)o so small, and that it seemed to me that the Government would have the greatest difficulty, if those gentlemen choose to contest the case, to recover, before a jury, under those charges, unless the court should dii’oct the verdict for the violations of the statute; and that was one ground on which I said to the gentlemen at the Custom House that my judgment no jury would give a verdict in the case, I wish to add that I h ive on no occasion, except the one which I have mentioned to you, had any conver.sation wluitev^er with Mr. Bliss about the case, and I never made any suggestion or intimation about the fee to him, except as I have stated here. 1 made no allusion to his fee, and I had no idea at the time that the conversation occurred in my office when I sug¬ gested to him to go dovvn with me to the Custom House and participate in closing up the case (which I supposed would be done) and take half the fee, that he knew anything about the settlement of the case. How Mr. Bliss can believe (as I judge he does, from what he stated to this Committee) that I had proposed that I should share his fee with him, i.s'very surprising to me. He may possibly justify himself, from the fact (a fact which 1 learned after that interview, but not till the next dav) that he had that morning, before coming into my room, gone to the Judge, whether in his piivate room or in the court room I am not advised, and taken the official oath, which fact Mr. Bliss did not mention to me, nor had I the lea.=t idea of It. The custom has always been in that office for the outgoing incumbent to take tlie commission sent to the new appointee and present it to the court, introducing his successor, and move that the oatli be administered to him. That was done in my case by Judge Pierrepont, and I am told that it has been done in the cases of my predecessors; but in this case, as I have stated, I am informed that Mr. Bliss went in the morning, before I came to the office, and took the oath. He made no mention of it, however, to me, and no conversation was ever at any time bad between us in reference to his taking or delaying to take the office, till the first of January, when my resignation was to take effect. I went through with all the duties and all the business of that day without the slightest intimation or idea that any- AN EXTRAORDINAKY HISTORY. 107 body else was the officer, either de jure or de facto. I never dreamed of it and it has been suggested to me that Mr. Bliss gets the idea that I offered to share his fee from the fact that he had taken the oath in that manner be¬ fore he came to see me. You will have seen, of course, from this statement that all the know¬ ledge I had of the Phelps, Dodge & Co. case, while I was district attorney, was predicated on the affidavit of this clerk of theirs (about whom I know nothing ; I had never heard of the person before; but it turns out that he was an individual whose credibility would have been greatly shaken before a jury). The papers in the Custom House, and those which were exhibited by Mr. Jayne at the time of the statement made to me by Mr. Jayne at the Astor House, T had never seen, and did not know that, in point of fact, the error in their case was of a character which ran through all similar entries, and that the valuation of the goods had operated in other cases in such a manner that the price stated in the invoice was much larger than the actual cost, and in such cases had produced a probable over payment of duties. But, before I wrote my letter, these facts were laid before me. It appeared in sub¬ stance, as I understood it then and as I still understand it, that goods had been purchased on long contracts, some of them in Wales, to be delivered in Liverpool at stipulated prices, covering the whole period of the contract; but that the foreign house of Phelps, Dodge & Co., as those goods were shipped, had adopted and entered in the invoices the market valuation at the time of shipment instead of stating the actual cost, and that the effect of doing so had been, in those instances in which a forfeiture was claimed, that they had stated a valuation less than the actual cost, while in the great bulk of the business of that character the market valuation as invoiced was very considerably more than the actual cost ; so that, in carrying out the principle of valuation they adopted, the result was, taking the whole course of busine.ss into account, that the Government received, on the valuations adopted by them, a far greater amount of duties than it would have received on the actual cost of the goods. Now as I understand the law, they were bound to state in their invoices the actual cost, and they were bound also, if the actual cost did not equal the market value, to add to it so as to make it market value. The Chairman.— -They were to add it in the entry so as to make up the market value ? Mr. Davis.— Yes, they were to do so when they came to make the entry otherwise, if the appraiser found that the price stated in the invoice was 10 per cent, less than the actual value, he would be at liberty to add that 10 per cent., and to add the penalty of 20 per cent, besides. 108 CONGRESS AND PHELPS, DODGE & CO. Mr. Bukchard. —Is not that the extent of the penalty? Mr. Davis.— That is the extent of tlie penalty that the appraiser can add. Mr. BoRCHARn.—If they make no addition to the actual cost, so as to make market value, is there any other penalty? Mr. Davis.— Perhaps that may be said to be so in a case where the law requires the market value to bo stated ; but in cases of goods purchased the law requires the cost to be stated. Now, in these cases they must make market value by making an addition to the cost value ; and they are subject to the penalty of 20 per cent, if they do not do so, and if the appraiser finds that the price stated is 10 per cent, below market value. Now, prac¬ tically, these gentlemen are right in saying that they have paid more than th(‘y would have paid if they had put in their goods always at cost, because the ordinary rule at the appraiser’s office, in the great bulk of cases, is, that the invoice cost is generally taken as the market value ; especially is it so taken unless the advance exceeds 10 per cent. Now, the difficulty in these cases wherein these gentlemen have violated the law occurs right here. A merchant who buys his goods and enters them as his own is bound to state the actual cost upon his invoices ; yet the statute provides that if there is an advance in value that advance must be added to make the basis of duty. The duties in all cases are leviable on the actual market value at the time of shipment, as I understand the law ; and so, where the goods have cost a certain price, if the actual value at the time of the ship¬ ment be a higher price, that higher price is the basis of the duty, and the law enjoins that the invoice shall state the actual cost, and it provides that while the advance shall be added to get at the assessable value, yet in case the goods have depreciated so that the market value is less than cost, the actually stated cost shall be taken as the basis of duties, and the merchant gets no advantage in reduction of duties from the fall of prices. I would now, while I think of it, like to suu'gest to the Committee whether it wo-uld not be just and right that that^iw should be changed. Ihese gentlemen in these different cases have entered their goods, in some instances taking the market value at a little less than the cost, because the market value had dropped. But the law requires them to state the cost, and requires that the duty shall be levied on that cost, although the actual market value is less. And there is precisely the point in which these parties did an act which subjected them to the consequenees of violating the law, because it was a violation of the law to enter goods at a market value which was below the actual cost when the statute required that the cost should be given in the invoice, and that such cost should be the basis of duty. AN EXTRAORDINARY HISTORY. 109 Mr. Burchard. —I understand that they claim that the invoices were the actual cost, and that the memoranda were memoranda of the market price. Mr. Davis. —No, sir; the other way. The invoices stated the actual mar¬ ket value. They conformed to the spirit of the law, which is to give actual market value as the basis. But this statute, which requires the cost to be stated, puts the merchant in this position : For instance, Phelps, Dodge & Co. have contracts for tin made on the 1st of January at a specific price; that tin is deliverable in Liverpool as fast as manufactured; there comes an invoice of it from Wales to Liverpool on the 1st of July at the cost which was agreed to be paid in January; they are bound to enter that cost price in their invoices instead of the market value on the 1st of July. Now, the same tin may have fallen off in value so that a competitor in the same market can buy it on the 1st of July at 50 per cent, less than Phelps, Dodge & Co. have contracted to pay for it. That competitor sends his goods on by the same ship which brings the goods of Phelps, Dodge & Co. The latter are bound by law to enter their goods at the cost price, and are bound to pay duties on that price; while the other merchant, who is bound by the same law to enter his at cost, enters them at a cost of 50 per cent, less than Phelps, Dodge & Co. And thus Phelps, Dodge & Co. are obliged to come into the market and compete with a man who ships his tin at the same time, and pays 50 per cent, less for it, and gets his duties estimated on 50 per cent, less value than Phelps, Dodge & Co. can have theirs. Now, that operates with great hardship at times on mer¬ chants, and it seems to me that that provision of the statute ought to be abrogated. As I understand the statute, it is a mistake to suppose that where the party has stated in his invoice actual cost, he can, at any time afterward, change it. Tlie law says he must do it at the time of the entry. Mr. Sheldon. —What would you make the basis of duties. Mr. Davis. —The only true, sensible basis is market value at the time of shipment when the duties are ad valorem: otherwise the man who buys his goods ten days before another man, yet ships them by the same vessel, may find a competitor when he reaches New York, who, from the market having fallen within those ten days, can undersell him, say 20 per cent., because of the less duty which the latter has to pay. These gentlemen, in my judgment, were led into the error which they committed (and which was a plain, palpable violation of the statute) by the idea which their foreifn correspondent had, which they did not know enough of the law to be able to correct ; and probably also by the suggestion of the consul in Liverpool that if they gave the actual market value they were doing what no CONGRESS AND PHELPS, DODGE & CO. the law required. They were doing wliat justice and equity required but they were plainly violating the statute. Now, a good deal has been’said upon the point that if these gentlemen were not guilty of actual fraud they were not liable to a penalty. It does not follow at all that there must be actual intentional fraud proved under our revenue laws in order to make out a case of forfeiture. It is only required that a man shall knowingly do the forbidden act. If he knows when he does the forbidden act that he is doing that act, the law attaches the penalty. This may be illustrated by the law relating to usury. A man, for instance, comes into our State from Illinois, lends $1,000, and draws a note by which the borrower agrees to pay him 10 per cent.—as he may properly do in Illinois. He has no intention whatever to violate the statutes of New York, yet he docs violate it, and the penalty attaches because he knew when he drew the note, re.serving 10 per cent., that he did that act. Mr. VYooi). — Although he did not know the penalties for usury in New York ? Mr. Davis. — Yes. The law assumes that every man knows the law and tlie penalties it imposes for any act which he knowingly does, whether the man does know it or not. Mr. Niblack. That is the best illustration of the case that we have had. Mr. Davis. In reading Mr. Bliss’s statement, I find that he refers to a case where he says two verdicts had been obtained against a bouse in New Aorkfor $102,000, and that the Secretary of the Treasury remitted the whole sum. Mr. Bliss is mistaken in the facts of the case. That was a case that was disposed of in my term. The case came on for trial before Judge Blatchtord. It was on the calendar and was moved. The defend¬ ants struggled to postpone it, but the Judge, on hearing the argument on both sides (I was not present, but it was tried by my assistant), refused to postpone the case. Thereupon the defendants’ counsel retired and left the case to go by default. The case was tried then in the nature of an inquest, without any opposition from the other side. Judge Blatchford sent it to the jury, there being nobody to say anything for the defendants in the case; but the jury disagreed, and would not give a verdict for the Govera- ment. That case came on trial again two weeks afterward, and then the defendants appeared with very able counsel, and I went in and tried the case myself—the trial occupying about a week. Mr. Dawes.—W as the default taken off? Mr. Davis.— No objection was made to their coming in. We treated it as though the case had never been before a jury at all. We tried the case very thoroughly. It wms contested on the other side by a very able law- yei, much superior to myself, and when the case rested, the jury was AN EXTRAORDINARY HISTORY. Ill ready to beat the Government beyond any doubt; but I moved for a direc¬ tion on the part of the Judge, on the legal proposition that those parties had done the acts knowingly, by means of invoices which were not true, and must take the consequences of violating the law, unless the Secretary of the Treasury saw fit to relieve them. The Judge held that the proposition was sound, and he directed a verdict on my motion, after hearing argument. That was the case which the Secretary remitted, and in which he did entirely right. The remission took place after I left office, but I was entirely satisfied that it was a most proper thing to be done, because, while these gentlemen had rendered themselves obnoxious to the penalties of the statutes, they had never in¬ tended to defraud the Government. That was the case which Mr. Bliss de¬ scribed as a case in which, after two verdicts by a jury, the Secretary re¬ mitted the penalty. There was no verdict of a jui'y, in the sense in which he applied that term, because the verdict was directed by the Judge. Now, on that subject 1 would like to make a suggestion, which is, that in refer¬ ence to that class of cases, if the law is to stand as it now is, or substan¬ tially as it now is, there ought to be a provision of law to this eflect, that in all cases tried before a court and jury, on a question of alleged fraud upon the revenue, it shall be the duty of the court to submit to the jury as a distinct proposition: Were the parties guilty of actual intent to defraud the Government? And if the jury find in such a case that the parties were so guilty, there should be no power of remission whatever; but when it is found that there was actual intent to defraud, the penalty should be en¬ forced by way of example. This rule should apply to all cases where the Judge feels bound to direct a verdict under the law (as in the case which I have just alluded to), where the Judge should say to the jury, when directing the verdict, “ Gentlemen, I am obliged, as a question of law, to say that the statute has been violated, and that there must be a verdict for the Government; yet you are to retire and determine the question of actual fraud.” If the jury in the case I spoke of had been so charged it never would have found the parties guilty. The Chairman.— Would not the insertion after the word “ knowingly,” in the statute, of the words “ with intent to defraud the revenues,” cover the case ? Mr. Davis. —Perhaps it would, but it will be open to question. If, how¬ ever, you provide that on the trial of such cases, the Judge shall submit the question of actual fraud to the jury, even in cases where he is bound to direct a verdict for the Government, you will save the whole thing. Then if the jury find that there was fraud, the Secretary should have no power over the case, because then he would be reviewing the verdict of a jury. 112 CONGRESS AND PHELPS, DODGE & CO. Mr. Beck.— Ill the case to which you have just referred, in wliicli the Judge directed the jury to find a verdict for the United States, did he also direct the jury to pass on the question of actual fraud? Mr. Davis. — No, sir; not at all. 1 said that if the Judge had done so in that case, the verdict would have been different. The courts are bound, in enforcing statutes, to order verdicts in cases where the parties knowingly do the acts which arc a violation of the statute. We have just had a case in our own State of that kind. A poor man who was entirely out of em¬ ployment had a friend who had been appointed inspector of elections. Our statute provides that if any person, not being an inspector of elections, shall put into a ballot box any vote or votes, he shall be guilty of felony. Now the man who was actually appointed inspector thought that he could help his friend by having him do the duty and receive the compensation. He went to a lawyer, who drew a power of attorney providing that, in the name of this first party, the second party should go and act as inspector and perform all the duties of that office. The man went and attended to the duty, acting fairly enough, and no¬ body found any fault with him until about the middle of the afternoon. He had acted so well, it seems, that the chairman of the judges of election, when he went to dinner, appointed him temporaiw chairman. Then some¬ body who came to the polls said he was not the man who was appointed inspector; the police officer immediately arrested him. The man said, "I know that that is not my' real name, but I am acting under a power of at¬ torney.” This man was indicted for felony, and the Judge submitted to the jury simply the question whether he did the act of putting in ballots, and whether he knew he was doing the act. Of course, the jury found that the man was guilty. The case went to the General Term, and the General Term ivas obliged to affirm the decision beloiv. But we all united in asking the Governor to pardon him, which the Governor immediately did. That illustrates the position in which the courts are sometimes put in regard to the enforcement of statutes. For that reason I have made the suggestion, to ameliorate the hardships of the case, that where a Judge is bound to direct a verdict, because the act forbidden has been knowingly done by the party without his knowing or considering the law and its consequences, and is yet a plain violation of a revenue statute, the court shad also sub¬ mit the question of guilty intent to defraud. The Chairman. — Have you concluded your statement ? Mr. Davis. — With this exception: I should like to say, in reference to the Phelps, Dodge & Co. case, that I have never, either directly or indirectly, in any form or manner whatever, received one penny of fee from any human being. I should not have alluded to what the counsel for Phelps, Dodge & AX EXTRAORDIXARY HISTORY. Co. said to me in regard to tlie fee, if I had not seen that Mr. Bliss said that some such suggestion was made to liiin — that a fee should be paid to me in addition to one to him. I liave also this to say, that on two or thi'ee occa¬ sions after that, Mr. Knox, who treated the matter with the utmost fairness and kindness toward me, said to me, without speaking of it directly, “ VVc expect to carry out that suggestion of ours,” or something to that effect. But a few days after I made my statement in the letter which has been published, I met Mr. Dodge on the cars— it was the first time I had met him after the settlement was completed—and I asked him whether any ar¬ rangement of that kind had been made, or whether any money had been paid to his counsel with any such view, and he said “ No.” I then told him that, from what had been said, I had got an impression that possibly something might havQ been paid into the hands of Jiis counsel with .such a view, but I wanted him to understand distinctly that, under no circum- .stances, should I receive anything. 1 desire to say that, because the im¬ pression has been thrown out that I have been animated in what I have done, especially in writing that letter, which seems to have given offence, and in which 1 stated that, in my judgment, Phelps, Dodge & Co. had not been guilty of actual fraud, by the los.s of the fee. On the subsequent dny (March 20th;, in reappearing before the Commit¬ tee to discuss the subject of moieties in general. Judge Davis prefaced his remarks with the following additional statement: I do not know that I said yesterday, l)ut I would like to sa}^ now, that, at the first meeting at Jayne’s office, of which I spoke, Mr. Dodge declared his readiness to pay any duties which the Government had lost by reason of any errors, or mistakes, or oversights of his firm, and also any penalties that might have been incitrred. Ue made that proposition, and it is due to him to say that on that occasion he was under very great agitation and ex¬ citement, this thing coming upon him, as he described it himself, like a thunderbolt. On the completion of his remarks on the subject of moieties Judge Davis was further examined by the Committee in respect to Messrs. Phelps, Dodge & Co.’s matters as follows: Mr. Dawes. —As there is some difference between your statement and that of Mr. Bliss, I desire you to be a little particular in the matter. Can you tell me about the date of your first knowledge of the Phelps, Dodge & Co. case ? Mr. Davis. —I told you yesterday it was eight or ten days before the close of my term. I cannot give the date any more definitely; yet there is one mode of fixing the exact date, and that is the date of the warrant, for mv attention was called to the matter the day before the date of that warrant. 114 CONGRESS AND PHELPS, DODGE & CO. Mr. Dawes, — AVliat day of tlie inontli was it tliat you had the interview with Afr. lDi.ss ? Mr. Davis. —The 31st of Dcccnibor. Mr. D.iwes. —AYliat time of tlic day iiad you tliat interview? Mr. Daves. —Tlie interview, I tliiiik, was from a little past 10 o’clock to a little [)ast 12 o’clock. I am not very definite. Air. Bliss was to be there at 10 o’clock, and he came a little after that time. Air. Dawes. — You have stated that you had not any knowledge at that time that Air. Bliss had (itialified as district attorney? Air. Davis. — I had not the slighti'st. Air. Dawes. — How soon after that did you know’ the fact? Air. Davis —I wuis told of it the next day, which was the 1st of January. Air. Dawes. — At that)>interview in your office wdio wore present? Air. Davis.— Nobody but Air. Bliss and myself. It w’as in the district at¬ torney’s own private room. Air. Dawes. — After having invited Air. Bliss to go down to the Custom House wMth you to see the settlement of the Phelps-Dodge case, and after you offerc'd him one half of what you supposed was your fee, you and he went dow’ii together ? Air. Davis.— No, sir; he did not go. He declined to go, saying that it would be of no use. Air. Dawes. — Repeat, in that connection, what you stated yesterday was his answer to you when you made this proposition to him. Air. Davis— After I made him this proposition Air. Bliss sat a moment looking, as I said yesterday, vei’y much surprised. He looked as though he was hesitating wdiat to .say. He then arose and stepped to the mantel (it is a small room), leaned Ids elbow on the mantel, and turned around tome and said. Now that you have made me that proposition, I feel bound to saj^ to you that this case is not going to be closed to-day. I w'as informed, last night, of what took place at the Astor Bouse, and I was at the Collee- toi s house up to a late hour. Those people, or those persons, have been playing double with you. Somebody, and I will not tell you who, has been carrying water on both shoulders, and I say to you that the case is not going to be settled. It is no use in going down, and I think I will not go. Ihesc are, if not the exact wmrds, as near them as it is practicable for one man to repeat the language of another. They made a very decided impression upon my mind at the moment. Air. Dawes. — You thereupon went down yourself ? Air. Davis.— A little after Air. Bliss went away. Air. Dawes.— When did you go ? AH. Davis. I first went to the door of Air. Jayne’s room, and inquired for AX EXTRAORDINARY HISTORY. 115 Mr. Jayne, and was told that he was with those officers up stairs, in the naval office. I saw there, however, standing in the room, or sitting, I am not sure which, Mr. Knox and Mr. Wakeman, counsel for Phelps, Dodge & Co. A few words passed between them and myself about the case, and I went up* to the naval officer’s room and back through the business room, into what I understood to be the naval officer’s private room—his own office. Mr. Dawes. —Whom did you meet there ? Mr. Dxvis.—I saw Mr. Jayne; the Collector, General Arthur; the Sur¬ veyor, Mr. Cornell; the Naval Officer, Mr. Laflin, and a gentleman whose name you excused me from naming yesterday. ?k[r. Dawes. —I want to know all the persons wdio were there. Mr. Davis. —If the Committee insist upon it, I can say who were there. I may say that I have no knowledge of this person having any connection with these matters. Mr. Dawes. —The inquiry is, if you will be good enough to tell us, whom you met in that room ? Mr. Davis. — This person was Senator Conkling. Mr. Dawes. —State, then, all — put them all together in one list, so that I may not be supposed to be searching for one name. Give the list of those persons whom you found in that room. Mr. Davus. —The Collector, General Arthur; the Surveyor, Mr. Cornell; the Naval Officer, Mr. Laflin; Senator Conkling and Mr. Jayne. I have no re¬ collection of any other person, tliough it is pos.sible that some of the clerks, etc., might have been in the room. Mr. Dawes. —Report as briefly as you can what transpired in that room while you were there. Mr. Davis. —Before doing so I ought to say that in stating what trans¬ pired in the room yesterday I stated it briefly, without stating all that transpired. I stated’substantially what transpired in regard to the subject matter. Mr. Dawes. — That is all 1 desire. Mr. Davis. —There was much more said than I stated yesterday. There was a discussion. Mr. Dawes. —Give us substantially what was said as briefly as you can. Mr. Davis. —The substance, so far as I was connected with it, was this. Mr. Beck. —You had better state it all; it will save time. Mr. Davis. — I went into the room and spoke to these gentlemen and shook hands with Senator Conkling, and, I think, with all these gentlemen. After a moment Mr. Jayne said, he being the first speaker of whom I have any recollection, “Judge, we want to know what have been the decisions 116 AND PHELPS. DODGE 1 w.^ I* __1. ’ . • \ • . . ^ ticed, so plain in every feature that it cannot be misunderstood. The system was shown to be so monstrous hi its ciiaractcr and ex- tent tli.it it extends into Legislative halls, to ' Committee thought it would make then nf and almost to the very feet | tigation rather too pungent. \ir^ T?';i . "^1 ‘®'' 'y ' The argument of Mr. Hyde is described as in imain yowed that his firm had been ] being one of the most powerful and startling before a Committee. He saki; lent in duties ' ’ ‘ - .strangely interested in the case. He would have given the names of the members of Con- :ress had the Committee asked them, buttle time they had paid the Coverii alone $5i>,000,000, and that among other things, that he eould state from they Ijceii cliargod with fraud or had o known to be more than ordinarily prosperous is oulv. he knows to <-.vpose lum to the cupidity of a set of bandits armed with official power. Ho becomes the subject of a " squeeze "—as the process is signiflcaiitly called—of successive ■■squeezes,” so long as it is tlioug-ht that the pressure will ’•leld returns, ft is precisely to a despoti; ia\N. as we tong ago sliowed, was committed ! ^ , by the officers <,f the government upon this I Committee yest m.e house to the amount of a -luarter of elfecdual extinguisher to the word; million of dollars, and that this metl.od of of Jayne. Jt is too late to say i, - j .. word to the .standing of the eminent merchant who has been obliged to defend an old firm against a disreputable spy. The contrast Ijctween the two men is so marked that we are not surprised to learn that the airy super¬ structure which Jayne raised before the Com¬ mittee lias toppled over. The vindication of the firm of Phelps, Dodge, & Co., ample as it is, may be taken as a complete and impreg- naiile argument against the whole detestable moiety system. of this sort that the uclmiihstration of'thc laws of our country has been reduced. Our wiiolc commercial communitv. indeed cverv member of the community who'lias any means lo be taxed for the support of the State is subjected to a despotic terrorism from men in office, against ivhieh tliere is no defence and from which there is no apjieal. It is perfectly safe to say that never before m our history, never under any partv, has there been any such unscrupulous aiid oi> pressive mse of power. Such a statement as that of Mr Dodge cannot be without results it IS made to the vvliole nation, in unquestion¬ able terms, on antlioritv that cannot be '>-iin said; and the question,'we l.elieve, wliich^hc people wdl ask themselves will be; AVlneli IS It that must come to an end. this official de.spotism, or all liope of a just government. [Prowl The New York Times, J/arc/i G, 1874 .] |P/'0 I The New York Evei 1874.J -Mr. Dodge's statement before tJie C sional Investigating Commitiee is a. s forward, manly, and ingenious narrn laets winch will impress the bly, and conlirm the geiun-al i uprightness of o ;; of 0 country fui ■onlidcneo i: aight- tion of greatest mercantile Ao civdized country will tolerate The Committee on AA^ays and Means con¬ tinued ill session many hours to-day, liearing the merchants of Boston and New York in regard to the modilication of the Customs laws. The statement; of Mr. Dodge before the Committee obtains entire credence, and the manner in which the tirm was dealt with has been denounced by members of the com- mittoo in very vigorous terms. So far as this feeling of indignation assumes a personal direction among members it extends towards Cen. Butler (or the part he took in the trans¬ action as Jayne’s coimsel. Butler’s influence with ihe House has been greatly damaged by the statement of his couuoctioii with this affair, and he will scarcely have the hardi¬ hood to atteiiqit to lead the House again till the storm has had time to blow over. One [iliasc of the newspaper discussion of the moiety quo.stion i.s commented on quite exten¬ sively here to-day, and that is the attitude of two daily papers in Now Y"ork, which, in lyder to servo partisan ends, deiioiuiced the lirni of Phelps, Dodge .k Co. as great swind¬ lers of the Government in 1S72', aucl which now, ill order to damage the reputation of the Governmeut officers, restore the firm to their original character of Christian merchants and I gentlemen. AN EXTRAORDINARY HISTORY. 129 I Washington Correspondence. N. Y. Tribune, March 10, 1874.] This has been a bad day for Detective Jayne and liis attorney. VYhile the latter was being- roasted by Mr. Foster in the House, on the Sanborn business, the former was cogitating: on means whereby he might escape some of the disgrace which hung over liiin in the Y^ays and Means Coiumittee. To¬ night’s session of the Committee has done the work for the detective. TJie two ivorthies, the rogue and his counsel, can keep each other company in their ruin, and join their lamentations on the uncertainty of sinful if'there existed in the minds of tlie mem¬ bers of the Meat's and Means Committee any doubt of the copartnership between Jayne and Eutler, it was dispelled to-night by testimony wliich, while not of the best, may neverthe¬ less be taken in this case as whollj^ convin¬ cing. With Butler as the attorney of Sanborn, and also the attorney and adviser of Jayne, .■ind with the trouble that has overtaken the three, the information given to-day by Secre¬ tary Richardson, on the floor of the House, that he has suspended the payment of moie¬ ties to informers in cases under both tlic San¬ born contracts and the Custom House .seizures, will be received b}- the combination of plun¬ derers with feelings not easy to bo described. The attorne)^ may yet show some hesitation to relinquish two clients who promised such heavy tribute to his avarice, but publicity has gone to such an extent that even Butler, with all his audacity and elan, cannot hope to hold , the questionable place he has so long filled in the party and in the House of Representa¬ tives. The developments before the TV ays and ■Means Committee this' evening were simply crushing, and Mr. Jayne was left without a prop to sustain his despicable proceedings and oppressions; and when he finished his (•ross-examination he looked as though he had passed through a most trying and exhaustive ordeal. He came on the stand to-day much chastened in appearance, and not only the New York and Boston gentlemen who were jiresent, but the members of the Committee, remarked that he was greatly altered in his manner, having lost much of his effrontery and impertinence. It will be remembered that when he first appeared here he announced with a great flourfsh that the merchants of New York were a set of thieves, and he would brand them before the Committee; that he would prove it from books, so clear as not to be doubted; and he talked loud and got rod in the face at the very idea that the mer¬ chants would come here to defend them¬ selves. His next step was to play the patriotic and humilit}^ dodge. He told how much he loved his country and how much he had done for her; that he had done no more than the law recognized ; that ho had worked so hard in the service of his country that he had broken down in health; and he even went so far as to allude to his heart broken wife. His last step was to acknowledge his misdeeds and turn State’s evidence. To-day he was heard for some time and set up a general denial on most of the charges. He denied having known that Phelps, Dodge it Co. had ever imported goods at an over valuation, but Mr. Hyde will go on the stand to-morrow and testify that Jayne admitted lo him that he (Jayne) had knowledge of the fact, and Mr. Dodge will show from his books, so long in the possession of Jayne, that there were entries showing it, and that in importations the over valuations were stated in the invoices which passed through the custom houses. TVhile the merchants here were rei^sonubly satisfied that Gen. Butler had been the coun¬ sel of Jayne, and was otherwise mixed up in the Jayne conspiracy, they were nevertheless unwilling to make the charge direct without explicit proof. To-night Jayne admitted tliat he had engaged Butler as his counsel in the Phelps & Dodge case, and that he had con¬ sulted and paid him in several other cases. He did not say that he had paid Butler in any cases wherein no service was rendered. Several merchants have written here to know if the resignation of .Jayne had been accepted, as reported. The Secretary of the Treasury says that it was at once accepted upon receipt, and the fact is certainly entered on the records. It may be stated, however that Frank F. Howe, also a Special Agent of the Jayne description, but less oppressive, is still in office and will probably give the mer¬ chants as much trouble as they can endure unless the law is repealed. Butler’s adher¬ ents give out to-night that he intends to make a fearful onslaught on the. merchants and im¬ porters of New York and Boston, particularly on Phelps, Dodge & Co. His motive for at¬ tacking merchants in both cities is apparent— in Boston they opposed Simmons and in New. York they oppose Jayne, both his favorites. [:F’rom the New York Herald, March 13, 1874.1 In Magna Charta it is provided that “ no freeman shall be fined save in proportion to his fault, nor shall any fine be levied on him to his utter ruiu.” It seems a remarkable 130 CONGRESS AND PHELPS, DODGE & CO. fact that one of the very \vronib- ject of seizures of books and papers. The Committee felt inclined to hear him, but it soon became pretty evident that an ex-parte state¬ ment would be unjust to the absent accused merchants. The hearing was, therefore, postponed to the 3d of March, when the implicated merchants were to be present and face the man whose very name inspired them with terror. It is a remarkable fact, that during the first two hearings of Mr. Jayne, on the 21st and 22d of February, such was the villanous sys¬ tem of fraud and systematic cheating that the Committee inclined to think that it would be even dangerous to change the law of 1863. It need hardly be said that the absent merchants were aroused, and they assembled in force last Tuesday morning, the 3d of March. In the meantime the Committee agreed to one prin¬ cipal procedure, viz., that they wmre not silting as a court to decide the guilt or innocence of in¬ dividual eases, that the sole object of inquiry was to find whether the law of 1863 bore hard on merchants, and whether or not it should be abrogated. But thsy reckoned Avithout their host. It was impossible to conduct an inquiry of this kind without listening to the alleged hardships and outrages suffered bj^ the most influential members of the mercantile communit 3 n ' On Tuesday, March S'Mr. Jayne, in the pres¬ ence of a full Committee and an audience com¬ prising a delegation from the New York, Bos¬ ton, Philadelphia, and Baltimore Chambers of Commerce, headed by Mr. Jackson S. Scliultz and others, also in presence of Mr. William E. Dodge, opened the proceedings. Unfortu¬ nately for the much feared late Special Agent, he was smarting under some severe strictures that appeared in the public press, and he en¬ tirely lost control over himself. He stigma¬ tized the mercantile community as a “set of infernal thieves,” and the audience present as their represent.atiAms. He actually told the Committee, and no doubt believed it, that the merchants, press, and lawyers had combined in a conspiracy against him to blacken his character. In short, he fully proved the truth of the classic adage, “whom the gods wish to destroy they first make blind or mad.” Had Mr. Jayne simply confined himself to a statement of the working of tlie law of 1863; ; had he early and collectedly stated that he felt it his duty to s ow favor to no one under that section; that the essence of the law may , be hard and harsh, but that was not his busi- I 13:{ noss, as he simply carried the law out; had ho refrained from individualizing cases, the odium w’ould naturally have fallen on the law of 1863. But, in defending the provisions of this act, he tried lo c mvince the Committee that the extortion of two, three or four hundred thousand dollars at one fell swoop from a firm, and the subjecting them to all the scandal, bad repute, and villanous slanders that hired spies could inflict, far from being a hardshii), was an operation not only pleasant and be¬ nevolent but a ver}’' meritorious employment, for which he deserved a vote of thanks from Congres-i. Such a course was surely .«ufficieut to weaken even an tz-parie statement. On Wednesday, h.aving cooled off somewhat. Mr. Jayne made a more collected and c.alm state¬ ment to the Committee. On Thursdav Mr, Dodge related in full his case, which had be¬ come a cause celehre all over the world. Mr. Dodge jidmitted unreservedly ihat he and his firm had made incorrect, iiav, false statements over and over again; that tliey had received slips which b\' right ought lo have gone to the Custom House ; but he also full}" convinced the Committee that such breaches of the law could not possibly have been committeil with intent to defraud Government, inasmuch a.s the whole alleged loss to the Treasiiry in five years was only, according to Mr. George Bliss, .Ir.’s, statement, 51,664.12. .\'r. Dodge also frankl}" stated tli.at the mere fact of a Custom House suit against his firm being talked of had damaged their credit both at home and abroad. He might have gone fu ther. I suppose he might have related .specific facts to verify his statement. Thei-e is no dmibt now at all that the true cause of the settlement was not the fear of scandal or even blackmail, but simple the fact that it was cheaper to bleed for 5366,- 000 and have done with it than to ri.sk the stoppage of a business ihat amounts to 58,- 000,600 annually. No doubt the settlement was the cheapest tvay out of tlie difflculU’. Mr. Dodge's statement as to the special agent system of obtaining inforiuatioii was r-eiy damaging. There is something very repulsive to the Anglo-Saxon mind in the idea of the Government spying upon private citizens and hiring clerks hitherto thought fully in the confidence of their employers to act as spies in the counting house and run out round the corner to send information where it would do rn-ist good, or rather most harm. It was on ■ Thursday that the Committee began to feed : somewhat ashamed of the outrageous law that ■ could sustain so infamous a system. The Bos¬ ton and New York lawyers, Mr. Hvdo and Mr. Brainard, followed Mr. Dodg'U Lawjmrs at best will talk like lawyers, and in a case of 134 CONGRESS ANT) PHELPS, DODGE & CO. this kind eloquence i.s thrown awny. It is tlie man wlio lias sulfered disyracefnl outra<;'e,s from a.villanous law who will make the snre- est impression. To-da}' (Satnrd;*}-) the cnl- minatiny point was reached, and it must be c mfessed that Mr. Jackson S Schulty, carried ofE the laurels. As a merchant iie felt i'orhis class, and in nnineasurcd terms lu^ denounced not only the law but the spie.s, detectives, and their lawyer.s. He did not spare ( Icneral Jhit- ler, and at tlie close of a two hours' siiccch he left the inqiression on the Connnittce that Jayne had lold the truth in one thiny at a rate—there were “a lot of ini'ernal thieves and their representatives'’ sonicwlicn [Fimn the Boston Commekcial Bulletin. March 14, 1874. J Some months since, in referring to the case of Ucssrs. Phelps, Dodge k Co., of New York, wo e.xpresscd the decided conviction that-this firm was entirely innocent of any criminal intent, and that theirs was a techni¬ cal error only, compared with which the pen¬ alty paid was a scandal upon the good name of the Government. The week's develop¬ ments have more tlian confirmed our words, for It now appears, by Informer .layno’s own words, that the over valuations in this firm’s invoices exceeded the under valuations,and that they had in reality paid the Government ?;vore than was its due. The country cannot make good the wrotw that has been done in its name, but it cun so revise the statutes that such outrages shall be impossible in the future. K “ an honest confession is good for the soul how excellent for what is spiritual III Inl.irmcr .Jayne must be the disclosures which he has made of late. Having secured for his own use the lion’s share of the nliiii- der, ho now virtually turns State’s evid mce becomes an informer upon his late follow in’ formers, and tells us that he left the service because ho “ could not stay amono- a oack of thieves.” ^ It must bo exceedingly^comforting to the eminent firm, Messrs. Phelps, Dodve & Co , who have been dragged before the pub¬ lic as culprits, to know that this worthv, now that their honor is fully vindicated, asserts that, had he fully understood their case he never would have prosecuted them !— iMd. iFiom the New Okleans Picayune, March 15 1874.] This evidence of Mr. Dodge reveals a fear¬ ful condition of afi'airs under the -xistimv Jiw No mercantile house is safe, from spies and informers. The most innocent error of ap¬ praisement is distorted into systematic roli- liery, and at once, without investigation or trial, the books of the house are seized and the business thrown into confusion, How¬ ever innocent the merchant may be lie pre- fcr.s to pay an enormous sum of money rather than run the ri.y the to.sti- mony of ex-District Attorney Noah Davis, and by tiic negative evidence of .Tiiyne, rvho testi- lles that lie received and put into his own pocket more than the whole salai'v of a whole Presidential term for liis services in scaring Phelps, Dodge & Co. into paying over to the Lovernment the ga’cat sum of money before nientioned as the prices of his forbearance to laish proceedings against them for alleged fi-ands, based upon an error amounting to something less tlian one twmnlieth of his own gains in their case. It no longer admits of a doubt that Phelps, Dodge k Co. wore robbed j (that is the exact English word to describe i the process) of a small fortune by a conspiracy j of petty official rogues with leading Washing¬ ton politicians. Mr. Dodge now admits that i his submission to this rolibery was diseredit- idilo to himself and to his house. No man, wc suppose, can ever look back upon anything i done by him under an Igaioble duress, physical I or moral, with satisfaction. Mr. Dodge is obviously exasperated by the roflootion, w'hioli has come to him rather lato in the day, that ho never ought to have succumbed to the menaces of tliis gang of official blackmailers. 11c gives a great many excuses for his weak¬ ness in the matter. The sum of them all is that he and his partners thought it better to 1)0 robbed at once, and have done with it, of a sum of money, delinite though enormous, Ilian to subject themselves to prosociition before courts in whose justice they distinctly imply that they liad no confidence, and against wit¬ nesses of whose unscrnpulonsness they unfor¬ tunately could have no rational doubt.' Of tlie most extravagance of the terrorism to which these respectable mercliants paid the most monstrous liomago wo may have some notion wdien woHiidGonornl Butle’r, the head and I'rout of the system, openly lauding Ids tool and crea- liiro Jayne, as lie did the other day, fur the “ iiiagnaiiiinity ’’ displayed by him hi a certain case 111 wliieli be “destroyed certain letters" found by biro among the papers of a firm, wliicli letters related to a “ woman scrape." Tlie time lias been in the liistorv of this country wdien a man wdio had so 'miicli as dared to hint at his intention of nsing tlio ' letters of a woman as a means of coercing a ! man into the payment of money wmuld liavc [ been caught by the first dozen male persons he addressed in that fashion and ducked to I death in the nearest horse pond. Nowwc I have the leader of the Republican party in Goiigress, and the master of the Republican President, openly commending a spy for his abstinence from this infamy! Of course there are hundreds of thousands of men calling themselves Republicans ivho will be niuisea- ted by tliis revelation of the moral and social \ rottenness of their chieftains. Of course there I arc hundreds of thousands of men calling I themselves Republicans wdio wall revolt in i honest indignation at the treatment to whicli I Mr. William E. Dodge testifies that he and I hi.s firm were subjected. Of course Mr. ¥il- ^ liam Id. Dodge himself, now' that he has made ’ up his mind at last to reveal the degradation infiicted upon him. w'ill be ready to denoimco General Butler and the other real authors ol' that degradation as sternly as the wretched clerk \vhona they suborned to betray and to calumniate him, and as the vulgar informer w'ho received for himself and for his princi¬ pals the shameful wages w'on through that treason and that calumny. But there are j interests iin'olved in this matter wider, deeper, and more important than the pecuniary and tho personal interests of Mr. Dodge and of Mr. Dodge's partners. The outrages of which Mr. Dodge is now' denouncing the extent and tho intensity, w'ould never for a moment have been possible had not the public sentiment and the legislation of tiiis country first been profoundly debauched. The basis of all these outrages 'was the flagrant violation of the principles of the Constitution by the Repuh- lieau majority in Congress legislating awav tho sacred muniments and safeguards ot American liberty. The rights of persons and tho rights of property were alike violated In tho satolites of General Butler and the Trea- 1 sury ring in tho case of Mr. William K. Dodge. But had not Mr. AVilliam E. Dodge himself in¬ vited these violations in the case not of one bm. of tliousmids of liis fellow citizens dunng tho civil w-ar? Who made General Butler. Who invested this corrupt and uuscrnpulons politician with tho power to suggest, to snp- poi't, to apologize for these violations of the rights of persons and of property'? lien') Ward Boeolier helped make liiin when at the Fiftli Avenue Hotel he nominated Bullov to' the Presidency. Those Republicans made hm' wdio devoted themselves for years to tlio wicked W'ork of praising as patriotism and e.’f- alting as virtue the most law-less, brutal, and dishonest measures of men like General But- AN EXTRAORDINARY HISTORY. 139 ]er. General Butler liimself was hailed by them as a deliverer and a champion of free¬ dom when he came to this very city of New York, in 1863. armed not with leg’al but with ' illeg-al authority, to treat the fellow citizens of Mr. William E. Dodge ns insolently, as brutally, as basely as lilr. William E. Dodge in the fulness of time was destined to be. treated by him. Now that they are protestfng with a tardy courage against the application to themselves of the violence wliich thej' applauded when it was exercised upon others, it will be well for tliese gentlemen, and well, too, for the country at large to remember how eternally true it is that they who “ sow the wind must reap the whirlwind.’' THE TREASURY SPY SYSTEM. 1 From ihe Correspon ace of Ne w Y ork W obld, 3Iarch 23, 1874.] Washington, Saturday, March 21. ‘■The nearer you will get to it the less you will like it.” Such were the prophetic words uttered twenty years ago by Marshal Niel to the com- bined armies of France arid England then laying seige to the Malakoff. It may well be said of the moiety investigation that the nearer we get to the end the less it is liked ! by those whom it concerns. And in these are of course included not only the adnrinis- tration but the very party that made the scandal possible. When, a month ago, the officious Jayne went before the Conrmitten, not only for a certificate of character but for a vote of thanks for the eminent services he had rendered, he little thoirght of his own friends that lived in glass houses; his jaun¬ diced eye only saw his enemies It seems now that he as well as most of Ids intimate friends will como in for the ‘-la'lies,” and with the exception of his enemy. Judge Noah , Davis, all the rest ai'e likcl.v to triumirh. The fact is, Jayne felt very much like a London tpiack doctor, who advertises as the '* silent friend,” and who feels sure ti.at none of his viciims will expose him, as, naturally, they would expose themselves. .layne at first had his full say. He made a clean sweep, and called tlio New York merchants a ‘ot of infer¬ nal thieves, and the deputations of gentlemen from New York, Philadelphia, and Baltimore, with Jack.son Schultz at their head, the repre¬ sentatives of infernal thieves. To his great disgust and astonishment neither the “ infer¬ nal thieves ” nor their “ representatives ” took kindly to Mr. Jayne’s admonition, but actually made certain exposures, which put quite a different complexion on the whole business in hand. First came Mr. Dodge, and told the truth, viz., that he was more or less bewil¬ dered, frightened and coerced into a sqttcezc of $271,000. Thi.s old gentlemen did even complain, to the disgust of Jayne, that his clerks were debauched into spies; that he and his partners were threatened with Ludlow Street Jail because they committed the great crime of burning up old letters at the end of the year without asking 'the special agent’s leave. The Phelps-Dodge crime was further fully proven by this very investigation, and resulted in the followii g succinct restime. First —Subscribing to incorrect or even false oaths by the score. Second —Importing ,$17,000,000 goods. r/nVrf^Paying thereon .$400,000 duties. Fbartt—Undervaluing $6,068. Fifth —Cheating Government out of $1,658 78 duties; and Sio'th —Being obliged to pay $271,000 fine. Thi.s terrible accusation looks more like a whitewash than anything that could possibly have been done for the House by even Noah Davis. Mr. Jayne had no idea that Mr. Dodge would dare to face the music, but he did, which -was no doubt verv unhandsome of him. Next came the Boston people with a long list of complaints and last came the ter¬ rible .Jackson S. Schultz and spoke, not as a man that had been “struck” but os a mer¬ chant and bank director who clearly finds it to his interest and to the interest of the bank¬ ing and financial system of the country in general, and New York in particular, that merchants should no longer be exposed to bo '• struck." M'hat seemed to sink deepest into the minds of the Committee was Mr. Pclniltz’s statement that a firm’s credit, bo it ever so good, wi'uld be immediately tainted if it was noised about that it was '‘struck” liy the Custom House. He did not disguise the fact that bills of such firms current yesterday only ns a greenback, would, if tainted by a Custom House implication, be refused discount accom¬ modation the following day. This simplo statement did more damage to the Jayne system and explained the mysterious settle¬ ments more eftectually than all that was said either before or after his evidence. Mr. Jayne being left iti a damaged condition, somehow became all at once more genial to the mercantile commun ty. True, he by no mealis changed his mind about the “ infcinal thieves” and their representatives, but in his 140 CONGRESS AND [’HELPS, DOnOE 4 CO. cross-examination lie sent a tlmnderbolt into the camp, and told the Committee timt there are otlier “ infernal thieves ” somcivliere else who are in the direct emplo}' of tlie Custom House, and whom he could not get removed, and on whose account he ‘’quit." liy a single sentence lie implicated some tliroo score clerks, against whose names he liad put a red mark. Unconsciously ho liad also to dnig in his great protector, General llutlcr. who was liis counsel, and who got a share of the “ swag.” Jayne's statements left no iiUernative to the (.lominitteo, ;tnd they invited the Collector, Xaviil Officer, and Surveyor of ISTow York to come and .give evidence Tlii.s , invitiition was very much like the farmer's ! wife’s invitation to the ducks: “Ducky,! ducky, come to be killcil.” Tliey wisely re- } fused. (I mean the custom.s rJIicials anil not j the ducks.) Not so did the rodoubpiblc I George Bliss, wlio w:is not invited at all. He I wont before the Committee and dccliircd ho ' knew more about seizures and the law than all of them put together. “ Decoy ” Bliss | had a little account to settle with his prede- I cessor, and he took the opporiuuity to go for him. I need not repeat his evidence, as it is ! by this time too well known. This of cou'Se | brought the said predecessor, now Chief Jus- I tico of the Htate of New York, on the stiuid. j Now, Judge Davis not only wanted to be even with Bliss, Jayne and Company, but he had an account more than a jmar old to settle with Senator Conkliiig, and he did it very neatly indeed. This is in reality the latest sensation. It may be as well to g’ive the precise words of Judge Davis about the Conkling iiccouut. “ He was particularly asked and gave a minute account concerning the interview which took place at the Custom Hou.se between hi-msolf and the officers of the customs in re¬ lation to the compromise of the Phelps, Dodge & Co. case on December .'il. He had giveii a statement of the same interview ycsterdiiy, omitting, however, to mention the muno of one person present at that interview. Ib.' i wa.s requo.sted to give the names of all who were pro.sont, and lie stated them as the Col¬ lector, General Artlmr; ihe Niival Officer, Mr. Laflin; the Surveyor, Mr. Cornell: the Spechil Agent, Mr. Jayne, and Senator Conk- Img. As t) the lattor, lie expressed his belief, as lie had done yesterday, that Mr. Conkling was there, not )jy design, but by aecidenq and that liis presence had no re.fei-oneo to tlio case. On being pre.ssel, however, by the Committee to relate substiintial y what oc¬ curred at that interview, he gave the sub.stanee of the conversation which took place, and I which was in reference to the questions whether the decisions of the courts were, I that in cases of false entries the whole invoice I was forfeited or only the particular items j that were tainted with frnud, and on that I point Judge Davis says that Senator Conklinp; took the statute in his hands, read it, and I gave it as his opinion that it was beyond all I doubt that the wliole invoice was forfeited, [ and recommended that in the Phelp.s, Dodge ! k Co. case a suit for the forfeiture of the entire invoice should be directed. No sooner was this statement of Judfte Diivis known when the strange “coincidence" of the elder Yeller upsetting a coach-load of voters on the precise spot indicated to him tlie day previous was on everybody’s lips who liad ever read “ Pickwick,” Having come down rather heavily on the Senator's “bow windows,'’ Judge Davis in the afternoon and at the close very kindly offered quite gratis the following eye liniment to the Senator whose eyes ho had so hand¬ somely painted blue: At the close of his statement he referred again to the interview at the Custom House, at which Senator Conkling was present, and said that ho had not the slightest idea, and certainly had no knowledge and no reason to sup[)oso, tluit Son:itor Conkling was in any , wav Connected witli the Pliolps, Dodge & Co. I matter. He did not wish to be understood as j conveying in any degree the remotest impu¬ tation of the kind. He wanted to exclmle ' that idea entirely, as he should be very sorry [ to make a suggestion in regard to any member of either liouse that miglit be warped into the idea that ho wished to convey an unfavorable impression. Tlie worst of it is tiuit tlio liniment smarts. Judge Davis dragged in frho following words; He 'siiid ho did "liot mean to imply anything detrimentiil to any members in “ either house” of being in any way connected with tlio Pliolps-Dodgo case. Now, tlie facts were but too well establLslied that General Butler, a member of the House, was rather deeply connectod with tho case, and putting a grat¬ uitous wliitewasli on Butler, he only the more damaged Senator Conkling. In the mean¬ time imagine tho ire, tlie lofty wrath of the great Barbe Rosa. SenatO' . The halls of the Senate will resound in good time with tlie in¬ dignation of tlie Senator. For three hours at least will the otherwise handsome features of tlie Adonis of the Sonato be distorted when the great speech on tho subject now being in¬ vestigated is delivered by liim. Yet the strange coincidence will remain a standing marvel. AIs" EXTRAORDINARY HISTORY. 141 A CUSTOM HOUSE SLANDER DIS- PROYED. [Fi'crni the New York Tribune, March 21,1874.] | Since tlio full and satisfactory explanation of the compromised case of Phelps, Dodge & Co., given before the lYays and Means Cum- inittee by the Hon. W. E. Dodge, there have been charges that Phelps, Dodge & Co. sent their Custom House clerk away, and have kept him out of sight since the beginning of their troubles to prevent damaging disclosures from him. A Tribune reporter j-esterday ob¬ tained the following statement upon this point j from D. W. James, of the firm of Phelps, Dodge & Co. The gentleman referred to, Mr. P. N. kloore, had been the Custom House 1 clerk of the firm for over twenty years. More j than a month before Phelps, Dodge & Co. ' were ■* struck ” by Jayne, Mr. Moore had a , shock of parah'si.s. Marked weakness and serious prostration followed. Mr. Moore was visited by one of the members of the firm, who also conversed with Moore’s physician. The latter said that a voyage to Europe, or some such step, was necessary for the patient, whose life could not be preserved if he should remain here. The long and faithfid service of Mr. Moore was an appeal to the house to aid him, and it was determined to send him to Europe at the expense of the firm. Finally, passage was engaged for himself and wife on a Wednesday steamer of the Williams & Guion line, but on the day when that steamer sailed lie was too sick to be moved, and the time of departure was changed to a Saturday steamer. Before that sailed Jayne had opened tire. In the course of a consulation of the mem¬ bers of the firm, held at the house of Mr. Dodge, the question of sending away the Custom House clerk under these cir¬ cumstances was considered. It was under- .stood that his departure at llmt time would give a pretext for suspicion. But the man’s life was at stake (so said his physi¬ cian), and Mr. Moore went away as had lieon arranged. He returned from Europe last Summer, still too feeble for work, at least in hot weather. Accordingly he spent the heated term at the home of his family in Massachusetts, near Cape Cod. This was the circumstance on which is based the malicious statement that “ on his return he was only ' one day in their office, when he disappeared again.’ He is now at work for the house, but the effects of the paraljAic shock still re¬ main, so that he is unable to perform iinrc- niilting or severe labor. He can be seen at their office almost any day, and, consequent!}', has not “ disappeared.” Anticipating that Jayne and his crew would find a handle for lying innuendoes in the departure of Mr. Moore, Phelps, Dodge & Co. procured and now preserve a certificate from Moore’s phy¬ sician, showing the immediate necessity of his European journey.* Mr. James said that the house did not care to divert attention from the great question of the injustice of the moiety system, and the wrongs which merchants had sufiered under it, by publishing answers to all the mean flings and trifling insinuations which might be made by the enemies of the firm. At the same time he declared that the firm possessed full evidence iu documents and in figures to confirm every least statement which Mr. Dodge had made. TURKEY AND THE UNITED STATED. To Salub, Editor of Tim Capital; As I predicted in my last letter to Tiik Capital, the most interesting topic this week here is the AVays and Means Committee in¬ vestigation on the moiety system and seizure outrages. I naturally refrain to dwell on a subject, I mean the investigation part of it, so much better known in Washington. But prominent in the great sea of trouble the case of Phelps, Dodge & Co. stands out like some gigantic monument of hardship and oppres¬ sion, against which the law of 186S has hurled all its fiery shafts. Whether Mr. Jayne has only carried out a bad law to the letter or not is now by no means the ques¬ tion. Mr. Jayne is not on trial more than the merchants. But it would not at all be inap¬ propriate to use Mr. Jayne’s very emphatic expression on Tuesday last. It is the infer¬ nal thief, the law of 1803, and its represen¬ tative, that is on trial. Now what I am about to relate is not. to use a Byronic ex¬ pression, a poetic fable or Parsee anecdote, but simply the truth, that can be verified. In relating a case of singular oiipression that happened in 1832, I will give names and places, and compare the story, when com¬ plete, with that of Phelps, Dodge & Co. I respectfully invite not only members of Con- Mr. Moore has since died from the effects of this illness. 142 CONGRESS AND PHELPS, DODGE & CO. ”Te 3 S in general, but the members of the Ways and Means Committee in particular to give full attention to ray narrative. ln-18G4 I met Mr. .Joseph Coniandi, the great banker of tlonstantinople, in Paris. I had Imsiness relations with him and became ((uite intimate. Ills father, Israel Coniandi, who was also a rich banker and jeweller to the Sultan, was, in 1 Sh2, stripped of every vestage of property, bastinadoed until he be¬ came a physical wreck', and died in e-vile, a poor, broken down wretch. The history of the elder Comandi’s misfortunes is as fol¬ lows: Israel Coniandi, a ■ wealthy banker and jeweller in Constantinople, had, in 18;51-2, a young man in his employ, born in Greece; both Comandi and his clerk were Jews. The young clerk proved very serviceable and in¬ telligent ; old Comandi, who was a kind sort of a man, made it a rule to invite his clerks who were his co-religionists to his house dur¬ ing the Passover feast and on other holidays. It was on one of these occasions that the young Greek clerk took a liking to Comaiidi’s j third daughter, a girl of about fourteen or lif- teen. and actually asked the old banker to give her in marriage to him. The rich banker only laughed at such a proposal, and told the young man brusquely to atteml to the books and jewels. From that date the rascally ' clerk brooded revenge; and ho soon found an occasion to caary it out. In balancing and arranging Comandi's books ho found that about a year previoits Comandi had furnished the Sultan (who, by the bye, was the father of the present Sultan and of Abdel Medjid) an aigrette made of numerous large brilliants, the cost of which was forty thousand Turkish pounds, or some $200,000. He found that Comandi had ren¬ dered an invoice to the grand vizier and sworn to its correctness, viz.: that the aigrette contained twelve brilliants weighing ten carats each, twenty-four weighing live j carats each, and so on. That Comandi had charged the twelve larger diamonds so ranch a piece on the assumption of being ten carat brilliants. Then this villanous young rascal found that, although the twelve large bril¬ liants weighed in the aggregate more than one hundred and twenty carats, yet there were some among the lot that only weighed nine and a half carats .and two only weighed nine carats each. The truth was Comandi had to match size and color, and did not bother his head whether one or two stones weighed less than exactly ten carats, as long as the whole twelve weighed one hundred and twenty carats. Having these facts before him, the first thing the clerk did was exactly what Harvey did at Phelps. Dodge & Co.’s forty years later—he stole his master’s papers. The next thing ho did was not to go to a special agent, but take the “TurbanJ that is, become a Mohammedan; that was im¬ portant, and gave him protection against a Jew, as in those happy days the oath of a Mohammedan against a Jew was admissible, while the testimony' of a Jew against a Turk was inadmissible. He then went to his highness, the grand vizier, and exposed his master of having cheated the sublime porte. Unfortunately the grand vizier owed Comandi money, and he naturally thought it would be but a fair way to pay his own debt by despoiling Comandi. It was in vain that Comandi pleaded that the brilliants that weighed more than ten carats each overbalanced by far in value the shortcomings of those that only weighed nine and a half or nine carats. It was also vain for poor Comandi to ask that the twelve stones should be weighed altogether; that then more than one hundred and twenty carats would be found. No! The wise grand vizier must have been the venerable inventor of the United States customs law of 1863. He said : " You testitied that your invoice is in every respect true. You stated there were twelve stones weighing ten carats each, and we find three of them weighing, one nine and a half, and two only nine carats each. lYe have nothing to do with those that over¬ weigh : the business is witli those that under¬ weigh.” I To make this true narrative short suffice it [ to say', Israel Comandi was bastinadoed on the ' bare soles of his feet, his whole vast fortune, I houses and all, was confiscated, and the pluii- I der was divided between the Sultan’s treas¬ ury and the informer. The poor family was driven into exile. Old Comandi died soon after from the effects of the bastinado, and it was not until the mild reign of Abdel Medjid began that the Engli.sh and French ambassa¬ dors insisted on justice being done the poor exiled family'. This act of restitution, I be¬ lieve was due to the late Ali Pasha. Enough. The Couiaudis, particidarly Jo¬ seph, tlie eldest sou of the victim of tins aw¬ ful consiiiraey', arc now rich and powerful. This liappeiiod in Turkey' in 1832. Now turn to tiro United ■ States, hi 187 2 tlie house of Phelps, Dodge & Co. was robbed of certain papers by an informer in tlieir employ'. These papers proved that the Government in live years lost $1,664. Forth¬ with books and yDapers were seized, and the mild law of 1863 coiiliscatod $271,0U0 of the linn’s money. In vain did these people AlSr EXTRAORDINAllY HISTORY. plead tliat they overpaid duties. The United States Government, like the griind vizier, only looked at the underpay. True, Mr. William E. Dodge was not basti nadoed on the bare soles of his feet as was Comandi. But all the families of the great house of Phelps, Dodge & Co. have received so many bastinadoes in all manner of shape and ways, except with actual bamboo sticks, that it may well be questioned whether Mr. 143 Comandi’s bastinado was not the more mer¬ ciful. I will pursue the mnik no further. 1 leave it for tlie American people to do, if they can do so without blushing. I remain your sincere friend, Adensey CuRiosiniiOY. Parsee Merchant of Bombay. THE MERCHANTS OE NEW YOEK IN COENCIL. PUBLIC MEETING, MARCH 20th, 1874, OF THE MERCHANTS OF NEW YORK IN PROTEST AGAINST THE PROCEEDINGS OF r. S. REVENGE OFFICIALS. On tlie return from Washington of tlie Special Committee of mercliaiits and citizens, appointed by tlie Now York Cliambcr of Commerce to repre¬ sent it in tlie liearing relative to moieties, seizures and revenue outrages, bi'fore the Committee of Ways and Means of the House of Representatives, a special meeting of merchants was convened at Steinway Hall, March 20th, to hear the report of the said Chamber of Commerce Committee. The floor of the Hall was well tilled, and a very large proportion of the audience consisted of merchants and clerks. Deep interest was manilestecl in the proceedings, and every countenance on the platlorm and on the floor gave evidence that the subject under consideration was one with which all were familiar, and to which they had given much and earnest thought. Among the prominent gentlemen present w'ere: Cyrus W. Field, William M. Vermilye, Leopold Bierwerth, J. A. Stevens, •Ir., .Tames N. Constable, S. B. Ruggles, W. H. Barbour, Daniel C. Robbins, Gustav Schwab, A. A. Low, L. E. Chittenden, Morris K. Jessup, E. 0. Codwin, E. F. Shepard, George TL Lane, S. B. Chittenden, Joseph beliginan, William IT Fogg, .laekson S. Schultz, Ambrose Snow, Samuel Sloan, Joseph Choate, Oliver Hoyt, Jonathan Sturges, Theodore Rosevelt, Jas. S. T. Stranahan, Charh's E. Iteebee, Charles T. Landon, William Whitson, James M. Rosevelt, J. P. Wetherill, Whlliam J. Peake, John 11. Hall, E. Obelcr- nian, E. Greelf, A. Schlesinger, Adolph Ruseh, Henry NVinsor, Joseph Grubb, Charles Mali, Henry Sanger, E. Hartt, IL Luekmever, James S. Harding. Messrs. Henry Winsor, Joseph Grubb, J. P. Wetherill and James S. Harding represented the Philadelphia Board of Trade. The following lurther report of the proceedings of this meeting arc copied from the columns of the New York' Tribune of March 21, 1874: The meeting was called to order at eight W M. by George Opdyke, the First Vice-President of the Chamber of Commerce. He briefly stated the object for which the meeting liad been called, and introduced John Austin AN EXTRAORDINARY HISTORY. 145 Stevens, v;ho read the report of the Special Committee of the Chamber of Commerce, the resolution proposed for the consideration of the meeting, and the amended Revenue Law proposed by the Joint Committees from the New York, Boston and Philadelphia Chambers of Commerce for presentation to Congress. The resolution was unanimously adopted. The Chairman then introduced Joseph H. Choate as an eminent lawyer, who, in his professional practice, had had opportunities of seeing some of the evils of which the merchants complained. His close, incisive arguments were listened to with fixed attention, and the speaker was interrupted with frequent and loud applause. His references to the “ means of extortion which have been placed in the hands of corrupt Custom House ofiicials and more corrupt informers,” and his advice to the merchants to refuse to com¬ promise, and to demand a trial by jury met with a prompt response. He argued strongly against the moiety system, by which the plunder taken from the merchants was divided not only between the Government and the Custom House officers, but so that a part found its way into the pockets of members of Congress, and, hence, shut off redress from the mer¬ chant, who might appeal to the Secretary of the Treasury. He demanded that the law giving the right of search and seizure of private papers be stricken from the Statute Book, and that nothing be put in its place. In England a man’s house, he said, is his castle, into which the king cannot enter. If that was a good law in England before the American Revolution, it is good law for free America. Thomas Barbour, the story of whose wrongs and of whose bold fight against wrongs has been told in The Tribune, was next introduced. Re¬ ferring to that statement, as published, he said that it was true—every word of it—and he could prove it. The Chairman then introduced the Chairman of the Committee on Revenue Reform, “ whose courage and ability had done much to create the feeling which pervaded the community on this subject.” Jackson S. Schultz was received with tremendous applause, and his address was interrupted by frequent tokens of enthusiastic approval. Tne words fell hot from his lips, and the language in which he denounced the “ hounds of the Custom House,” and their confederates in Congress, was not chosen for its inoffen¬ sive character. As he spoke of “Butler, that honest gentleman,” groans and hisses were heard in all parts of the house. He had been attending so much to other people’s business recently, he said, and had been acting the spy himself so much that he was able to tell more about the affairs of some merchants than they knew themselves. His explanation of the reason for Mr. Claflin’s satisfaction with the Custom House management was received with laughter. Mr. Barbour, who had “ more courage and backbone than 10 146 CONGRESS AND PHELPS, DODGE & CO. any other man within his knowledge,” had fought the Custom House and beaten it, and yet advised all merchants so situated to settle. If Mr. Dodge were present he would probably advise 1o fight and not to settle. Which¬ ever course a man takes when he is undergoing “the squeezing process,” he will be so hardly used that he will think any other course would have been better. Mr. Schultz resumed his seat amid stamping of feet and cheers. S. B. Chittenden spoke vigorously for a few moments. The only remedy, he thought, was to divorce revenue appointments from politics. Joseph C. Grubb, of Philadelphia, followed. He considered the moiety system one of unmitigated plunder. John P. Wctherill, of Philadelphia, Mr. Dinsmore, and others made brief addresses. The meeting closed about eleven P.M. COMMENTS OP THE PRESS, {Continued.) PAY BACK THE MONEY. [Chicago Tribctke, March, 1874.] “ Send hack the money," cried William Lloyd Garrison to Daniel O’Connell and Ireland, when he discovered that Maryland slavehold¬ ers had been contributing to the Repeal Fund, with the evident intent of stopping O’Con¬ nell’s mouth from uttering denunciations against their peculiar customs, which he had branded manstealing. “ Send back the money,” he reiterated, untd the Green Isle listened to the demand. If that requisition was well put— and the moral sense of the world commended it when it was a matter simply between man and man, to be gauged by the state of the in¬ dividual conscience—how much more so when it pertains to the honor of a nation and to the requirements of public justice in the treatment of the Government towards its subjects If money be obtained by fraud, by blackmailing, by conspiracy, by one man from another, there is a remedy in the courts. There is no reasonable doubt that if a respect¬ able firm in Chicago had been treated by any ring of unofficial persons as the firm of Phelps, Dodge & Co. have been treated by Govern¬ ment agents, just as surely as justice could be done in the courts of Chicago the perpetrators wouid be doing the State some creditable ser¬ vice in the Penitentiary at Joliet, instead of being examined by a Committee of Ways and Means at Springfield. Paying back the money is the only way the Government of the United States can do justice to a firm that it lias outrageously swindled, and save itself from the just imputation of a partnership with pirates. How this swindling and blackmailing has been done, and what are the links of the partnership, has been often told in The Tribune and many other papers of the land, and is being told day by day to a Committee examining into the operation of the law, and the action of the conspirators work¬ ing under it. Before this Committee finish their work, let them examine ex-Secretary Boutwell, and ascertain what he knew of the transaction at the time the thumb-screw was adjusted to these merchants. Did he, or did he not, know that their offence was merely technical? Was he then construing the law as a just arbiter or as a political ally of Ben¬ jamin Butler? Pay back the money not only to Phelps, Dodge & Co., but to a number of other re¬ spectable firms who have been robbed by the same gang of conspirators. Purge out the blood-money from the Public Treasury, which seems to have become like the House of God in old Jerusalem, a den of thieves Pay back the money 1 Let the public press demand this, and the people echo it, till, as in the sal¬ ary grab. Congress be driven to do this act of simple justice. It may be that, as the politi¬ cal representatives have done every possible dishonorable thing to keej) up the party, they may consent to do an honorable thing to save it. Pay back the money 1 {From the Albany Abgus, March 24, 1874.] The robbery of Phelps, Dodge & Co. derives importance mainly from the illustration it af¬ fords of the manner in which the Federal Government treats honest and honorable citi¬ zens. The case illustrates in striking outline an obnoxious law and its odious enforcement, revealing at once the oppression wdhch the statute permits, and the arbitrary despotism of the Administration, which does not scruple to avail itself of the advantages for extortion af¬ forded by the law. SECRET HISTORY OF THE PHELPS- DODGE CASE. {From the Chicago Tribune, March 27, 1874.] The testimony of Judge Noah Davis before the Ways and Means Committee gives tlio public, for the first time, an insight into the way in which one of our most famous firms, composed of men who • have done more for their country than the whole tribe who black- 148 CONGRESS AND PHELPS, DODGE & CO. mailed tliem, came near being made our most infamous firm. Business men should read, mark, and inwardly digest the remarkable story. They can then decide whether or not they care to run the risk of being treated in the same way themselves. The law recinires that invoices of imported goods shall contain the cost and all tlie ex¬ penses of transportation. The latter pi’oviso includes, of course, tiie expenses from the place where they wore bouglit to the port whence they are shipped. Tlio invoice must be verilied by our (Jonsul in the city where the goods are manufactured. >Some of the in¬ voices of the sheet tin imported by I’iielp.s, Dodge & Co. '.vore verified by our Consul in Liverpool (in violation of law, since no tin is nianuiactured in tliat city), and did not con¬ tain the cost of transportation from the place of manufacture to Liverpool. The error, on some millions of dollars’ worth of imports, in¬ volved a loss to the Government of ,'5f,GUU. It was discovered through a clerk who had been discharged from the firm’s employ. At the re- ijuest of the Custom House autliorities, .Judge i.'avis, wlio was then United States District Attorney of Now York, examined the state¬ ment laid before him by Jayne, and gave his opinion that the case ought to be examined, .layno then took the books and napers of the firm. Dec. Jf), 1872, George Bliss, .Jr,, was se¬ cretly sworn in as Davis’ successor. On the same day Davis, ignorant that ho was really out (A office, was asked to attend a consultation at tlie Astor House between Jayne and the Phelps-Dodge counsel. The latter offered to pay $f5U,UU0 for a settlement in full. This was declined. Jayne then stated that the arti¬ cles actually affected bj- the error in tlie in¬ voices were worth $2110,000. On the evening of Doc. 30, the firm agreed to pay this amount. They had previously appealed to Bout well to save them from being blackmailed, and had re¬ ceived from that sapient statesman the reply that he would uo nothing for them, because lie regarded the interest of the Government and an importer as directly antagonistic, and thought that each ought to try to get all that was pos¬ sible out of the other I An appeal to Grant got uo response. To be sure, it had been urged in favor of his reelection tiiat the linaii- cial interests of the country demanded it, and Phelps, Dodge & Co. had contributed $20,000 to get him reelected, but ho was safe for four years more, and the dupes must take care of themselves. «o they yielded iierforce. Tliey could not light longer. Their name was un¬ der a cloud. Their trade was crippled, liven in far off Singapore the charges against them had gained credence. On the morning of Dec. I 31, Judge Davis, still ignorant that Bliss had stolen into his place, met the latter, told him that he was about to close up the Phelps- Dodge case that morning, and offered him I half tlie fees, inasmuch as his official term would begin the next day. Bliss, moved by ! this generosity, blurted out the information j that Davis had been duped. “ I wastoldlast I night what took place at the Astor House,” I said he, “ and I was at the Collector’s house I till a late hour, and I know it is not to be set- ' tied to-dayu” .So there had been a secret i meering of the rogues to see whether they j could not give the screw another turn and I squeeze more blackmail out of their victims. ’ Davis went to the Custom House and found there the Collector, .Surveyor, Naval Officer, and Jayne. The buzzards had gathered over their prey. They questioned Davis about the law in the case, and he answered them, taking care to state at the outset that he would now accept no fees in the matter in any event. He told them no jury, unless especially advised by a judge, would give them a verdict. He afterwards advised Mr. Dodge to fight the case to the end. The cost of contest was too heavy, however. It was cheaper to submit to being swindled. The firm paid .$271,000 as a pen¬ alty for their English agent’s ignorance of a technicality in our complex revenue law^s— an ignorance that had cost the Government responsible for the complexitj^ about $1,600. A few days ago ISIr. Dodge, when he testified before the Ways and Means Committee, al¬ most lost control of himself when he told how a reputation gained by half a century’s honest work had been dragged through the mire by Jayne and his gang. This spectacle of an old man crying over the irremediable w'rong his Government had done him is not one to be proud of. Nor is the .speetacle of the Treasury dividing the swag with the blackmailers a pleasant one. Phelps, Dodge & Co., are a shrewd firm, but they can scarcely consider their investment of $20,000 in Grant’s re- election, for the sake of protecting the countiy’s commercial interests, a paying speculation. WHY DID THEY COMPROMISE? [From ike New- York Tribune, March 28,1874.] It long ago became evident that the case of Phelps, Dodge & Co. was to go on record as a cause celebre in our mercantile and finan¬ cial history, and y-et, notwithstanding all that has been said and written upon the subject, it is certain that, except for the facts that have been dragged to light within AN EXTRAORDINARY HISTORY. 149 the last few weeks, it would have been very difficult, if not wholly impossible, for the pub¬ lic to form any clear conception of its history and national importance. The circumstance that the great firm compromised and settled has been with many a stumbling block, inas¬ much as it almost necessarily seemed to im¬ ply either a want of pluck on the one band or else a lack of a full consciousness of in¬ nocence or absence of fraudulent intent on the other. It is, therefore, to tins very point, viewed in the light of the new evi¬ dence, that we now propose to ask special attention; and we are very much mistaken if this part of the history, hitherto obscured or concealed, does not, when fully understood, constitute a cause of offence against the Government and all concerned in the prose¬ cution, which the great general public will not be quick either to forget or forgive. It will be remembered that the dishonest clerk, whose sense of patriotic obligation, so highly extolled by Jayne, did not develop except under the prospect of large pecuniary gains, took first his stolen papers to a law firm of this city of considerable repute and standing, but not concerned in Custom House or revenue business. The case as presented to them was not one of a client seeking pro¬ tection of the law against oppression, of wrongs committed, property taken, character assailed or person injured and redress denied ; but a shameless open proffer on the part of a penniless adventurer to share an oppor¬ tunity for enrichment contingent on a vio¬ lated trust, on condition of legal cooperation | and assistance. By this firm the case was worked up at the beginning. The next step was to communicate with B. G. Jayne; and although Mr. Jayne con¬ fessed before the Committee of Ways and Means that hp knew the papers on which the case rested were stolen, yet he knew also that the placer to be worked was rich, the nuggets great in prospective, and this for him was all sufficient. For all ordinary cases, Mr. Jayne has un¬ doubtedly full confidence in his own capaci¬ ties ; but in a case promising such unlimited plunder as this, ordinary instrumentalities could not be relied on. He accordingly looks about for a partner, and from the whole country selects the most crafty, the most un¬ scrupulous, and, from a political point of view, the most influential with the President and the Secretary of tlie Treasury, in the person of General Butler. The ring thus formed is next enlarged by the necessary in¬ clusion, as participants of the spoils, of the Collector, Naval Officer and Surveyor, and later Iw the addition of the new District Attorue}^ George Bliss, whom a vision of two per cent, on one million seven hundred thousand dollars was enough to tempt to tireless exertion. One would think that hero was an array of agencies and instrumentalities, in the form of lawyers, high officials and detectives, amply sufficient to manage any case so mons¬ trous, and 3'Ct so clear and palpaVjle as this of Phelps, Dodge & Co. was claimed to be. But Judge Noah Davis, in his recent testi- mon}', lias lifted a curtain beliind which not a few had previously thought that they saw significant figures dimly walking, and shows us a Senator of the ITnited States, the special representative of the commercial emporium of the country, cheek by jowl at a night session with a detective, statute in hand, de¬ claring that, as it was nominated in the bond, the pound of flesh could be lawfully taken. And if the curtain had been lifted a little higher the figure of another Senator of the United States would also doubtless have appeared, giving judgment to the same effect, and adding his influence to the agencies al¬ ready enlisted to work the ruin and disgrace of one of the foremost mercantile houses of the couutrv ; and all for a motive which in the case of evorv one concerned, except Javne, whose deeds it was to be expected would fully accord with his profession, em¬ bodied the very essence of all that was mean and contemptible. For, turn it and twist it as we may, the offence of Phelps, Dodge A I Co., as the result of examination and re¬ examination, and by the confession and affi¬ davit of the chief Government officials, comes down to an alleged loss to the cus¬ toms of $1,658—the utmost possible gain to the firm being at the same time measured by the relation which this sum in the gross stands to a payment of ten millions in duties, or as a percentage of .advantage over the rest of the trade in a five years’ import of over forty millions. And this fact being known at the time of the night Senatorial conference and before the settlement and compromise fully as well as it is known now, we are of necessity driven to the conclusion that the motive which induced Senators and Representatives of the United States, District Attorneys, independent but influenti.al attor¬ neys and detectives, to manifest such unusual energy, and to act so differently from what they do when Peter Schmidt or John Jones is accused of defrauding the revenue of many times sixteen hundred dollars, was simply and nakedly the desire for plunder. It was nothing to the people who lived in the coun- 150 CONGRESS AND PfIELPS, DODGE & CO. try of Gadareiies that one of their own citi¬ zens had been reclaimed from lunacy and made a healthful member of society, so long as the value of the hogs was imperilled. It was nothing to ItoscoeConkling, Matt Carpenter, B. F. Butler, Geo. Bliss, and the official represent¬ atives of the customs that the fair fame of the great mercantile interest of New York was sought to be struck down and aspersed through their foremost representative for an offence which every other civilized nation would have held trivial, so long as there was a prospect of grahhing and dividing one mil¬ lion seven hundred and iwenig-six thousand dollars. To contend manfully against foes where there is even a small chance of success is to show pluck ; Imt t(j undertake to fight when the odds are entirely adverse is not ])luck, but foolhardiness. And with such motives actuating such elements as were ar¬ rayed against them, Phelps, Dodg;e & Co. may well be pardoned if they hesitated about fighting. It would have seemed the proper and manly part of men worthy to fill the high offices of Secretary of the Treasury, Senator and Re¬ presentative in Congress and District Attor¬ ney, when the triviality of the offence of Phelps, Dod e&Co.—irrespective of the ques¬ tion of motive—was established, to fall back on that old legal but righteous maxim, “ Ne leo: curat minimis," or that clause in the Constitution of the United States which pro¬ vides that “ excessive fines .shall not he im- pused, or cruel and unusual punishments in¬ flicted," and to say, This is too small a “matter for a great Government to make “ much of. If duties in trifling amount have, “under doubtful circumstances, been with- “held, let them be returned, with sufficient “ of addition to servo as a warning' against “future irregularities. In these days of dc- " dining commerce let us deal tenderly with “the reputation of American merchants.” But under the present rule of politicians and small men in high places, such was not, and for the immediate future, we have every reason to believe, such will not be the policy. On the contrary, the word has gone outthatj in the debate contingent on the introduction into Congress of the bill affecting moieties and the Sanborn contracts, certain prominent members are to do their best to make good Jayne’s assertion that “ New York mer¬ chants are a set of infernal thieves," and that special efforts are to be made to disgrace the great firm that has been imprudently restive under the robbery to which they have been subjected. Such an arraignment, how¬ ever, from paid attorneys, will be subjected by the people to a very heavy discount. [From the Baltimore Presbyterian, March 17, 1874.] YTn. E. Dodge, of the firm of Phelps, Dodge & Co., appeared before the Committee of Ways and Means a few days since and gave a history of the case in which they had paid a large sum as a compromise, showing the manner in which the firm had been treated. Ilis statements made a deep impres¬ sion, and there was scarcely any dissent from the opinion that the treatment of the firm had been whollj- unjustifiable. The Committee ■w'as, it is said, thoroughly satisfied that the representations made to tlie Treasury by Jayne and his confederates, and upon which the department acted, were false. The friends of Mr. Dodge, and they are legion, whose faith in his integrity vvas unshaken, even when the testimon}' against him was strongest, will rejoice at his vindication. His firm suf¬ fered to the amount of nearly $300,000, of which $65,000 weni to one person, the chief informer against them. We cannot but be¬ lieve that further investigation will make plain the duty of Congress to vote the firm of Phelps, Dodge k Co., a sum equal to that they have lost. AfflUAL DINNER OF THE NEW YORK CHAMBER OF COMMERCE. [From the N. Y. Tribune, May 8, 1874.] The one hundred and sixth annual banquet of the New York Chamber of Commerce was enjoyed at Delmonico’s, at Fourteenth street and Fifth avenue, last evening. The celebration was befitting the dignity and venerable eminence of this high body. An experience very extended, re¬ sources the most ample, and a character which brings a ready acceptance of invitations to distinguished guests, make the anniversary festivities of the Chamber of Commerce notable in every way. In the number present last evening there was a little falling off from that of some previous years, and several empty seats were noticed at the sumptuous tables. But in the position and good name of the guests and members present there was a brave array. At the centre of the raised table on the upper side of the hall was thevHon. William E. Dodge, the President. Upon his right there were the Hon. Henry Wilson, the Hon. Wm. M. Evarts, Judge Noah Davis, the Rev. Dr. William Adams, Samuel B. Buggies, A. A. Low, David M. Stone, Judge John R. Brady, Jno. B. Bouton, Whitelaw' Reid, the Rev. Dr. A. P. Putnam. On the left w^ere the Hon. William F. Havemeyer, the Rev. Dr. John Hall, Professor Roswell D. Hitchcock, Peter Cooper, the, Rev. Dr. Theo. L. Culyer, the Hon. Fernando Wood, the Hon. James W. Husted, the Hon. Erastus Brooks, the Hon. Henry E. Davies, the Hon. John C. Robinson, the Hon. John A. King, and the Hon. S. S. Cox. The responses to the toasts given were of marked interest, and fixed strict attention, though some of them were of extreme length. The gravity of the staid assembly was changed to enthusiasm by several references to matters of especial interest. Mention of the system of arbitration in com¬ mercial disputes, and of the appointment of Ex-Judge Fancher as arbitrator was cordially applauded. References by Mr, Dodge and Mr. Evarts to the evils of the moiety and seizure system in revenue cases, and to the pros¬ pect of relief with Judge Davis’s emphatic condemnation of the system were heartily approved. 152 CONGKESS AND PHELPS, DODGE & CO. The following is an extract from the speech of Judge Davis, in response to the toast, “ The State of New York You have alluded, Mr. President, to the case of your own house. There is an old saying among lawyers that hard cases make bad laws. That is true of the decisions of courts. But in practical life, hard cases make good laws, for they arouse the attention of the community to evil laws, and compel their abrogation. The blood of the martyr is the seed of the Church ! Not unfortunate will it prove if the seed from which springs re¬ generated laws shall be found to have been poured out in the blood taken •rom your veins. Denounced as 1 have been for having certified, solely through a sense of justice, that w'hile doing acts which were clearly viola¬ tions of the law, and thus subjecting you to heavy penalties, you and your house were free, in my opinion, from all intention of defrauding the Gov¬ ernment. I still hold to that opinion as the exact demand of truth and justice toward yourself. I have never, on any occasion or under any cir¬ cumstances, expressed any contrary opinion. There was no occasion for doing so; for where an act forbidden by the statute is knowingly done, though in ignorance of the law, and even in supposed compliance with it, if a loss of duties is the result, the question of actual intent to defraud is not important, in a legal sense, until the case, after judgment, reaches the Secretary of the Treasury on application for remission —which he is only permitted to grant where “ intentional fraud ” or " wilful negligence” have not occurred. Not to have written you as I did, with the views I had of the law and the facts, would have been unmanly and dishonorable. Pardon this personal digression. The bill reported by the Ways and Means is a long advance toward good legislation, and should meet the encouragement of this Chamber. Whatever aids commerce touches closely the heart of our State and City. Our City is the creature and very child of commerce. Here is tbe gateway through which the wealth and strength of the Old World are marching into the New. Give to its vast and cosmopolitan mercantile interests perfect freedom from the gyves and fetters of nnjust laws, and it will surely attain unbounded prosperity. Mr. Dodge then said : The allusion in the speech of Judge Davis to the case of my house may cause you to pardon a simple remark Avhich other¬ wise might be out of place. You may have noticed in a letter printed in The Evening Post of last evening an insinuation that Judge Davis wrote a certain letter with a view to compensation. It is barely doing him justice to say here that not one cent was offered or paid to Judge Davis, and he would scorn to receive it. COMMENTS OF THE PRESS. A SLANDER CONSIDERED. {Frotn Eakpek’s Weekly, May 9, 1874.] The character of the judges upon the bench is a matter of such vital impprtance to the public welfare that it is an urgent duty of the press to scan it closely, and when it is unjustly assailed, to defend and protect it. It is a kind of treachery to the highest public interest to suffer in silence assaults upon the honor of magistrates; and the public is apt to believe charges which are not plainly re¬ futed. We spoke last week of the manner in which Judge Davis has been attacked. There is doubtless in many minds a regretful feeling that he did in the case of Phelps, Dodge & Co. something w'hich was not quite candid and upright; and w’e propose now to state the simple facts wTiich a careful study of all the testimony in that case reveals, that those who are not resolved to denounce him mav see how honorable and blameless his conduct was. Judge Davis was District Attorney, the legal adviser and counsel of the government in revenue cases. The revenue, law of 1799 makes actual intent to defraud by the entries in an invoice the test of forfeitures ; and the jury must find that the acts were done with intent to evade the payment of duties. The law of 1863 changed this, and required not that the importer should mean to defraud, but only that the irregular entries should have been knowingly made. The method of invoic¬ ing adopted by Phelps, Dodge & Co., in per¬ fect good faith had resulted in their overpay¬ ments of duties being largely in excess of the underpayments. This showed plainly enough that there wms no intent to defraud. But of all this Judge Davis knew nothing. His attention was first called to the subject by the customs authorities, under the wretch¬ ed law which made irregularity in one point, but without the least fraudulent purpose, condemn the whole invoice. He had but three interviews with the cus¬ toms authorities upon the subject. At the first he saw the affidavit alleging the errone¬ ous valuations, but there was nothing to show that the government had been the gainer by the whole transaction. He did, therefore, what under the law was his plain duty; he advised that it was a case for investigation. From that time he had nothing more to do writh the case, Jayne continuing the investi¬ gation, until his advice wms again sought by the government. He then had an interview with Jayne and the counsel for Phelps, Dodge & Co., who had advised a settlement, to which the firm had assented. Judge Davis had neither by w'ord nor deed procured or urged a settlement, and the proof of it is the constant friendly regard of the firm for him. At the interview he w'as consulted as to the best method of settlement, and he advised that which was most usual in this class of cases, a fact which relieves him from the imputation of hurrying a settlement for his own advan¬ tage. The third interview was that at the Custom House, where again, as the legal advi¬ ser of the government, he stated the fact, which he could not deny or conceal, that the courts had general!}’' held that the whole in¬ voice, and not the tainted items only, were for¬ feited. This was undeniable, and Senator Conkling gave the same opinion more forci¬ bly. At this interview, irritated by circum¬ stances that had been brought to his knowl¬ edge, he declined to take any fee, and stated his belief that no jury would ever give a ver¬ dict for the government—that is to say, that there could be no evidences of fraud or actual lo.<=s to the government offered. Judge Davis did nothing but his plain duty during all this time. And now was there anything in his subse¬ quent action inconsistent with this? He be¬ lieved that, under the law, the invoices were liable to forfeiture, and that the proposed set¬ tlement was legal and proper. Intent to de¬ fraud had nothing whatever to do with the forfeiture. The Secretary of the Treasury might, indeed, have remitted the forfeiture, but that would have exposed the firm to a suit and judgment for a vast amount under the law, with serious injury to their credit. They preferred the settlement, with which Judge Davis had nothing whatever to do. When he had left office, and when one of the most honorable houses in the country was held up to public odium as swindlers who had sought 164 CONGRESS AND PHELPS, DODGE & CO. to defraud the government, and when the fact transpired that the overpayments were largely in excess of the underpayments— which was conclusive against fraudulent in¬ tent, and which Judge Davis did not know until he had left office—with the natural instinct of an honest man he wrote to Mr. Dodge that he was satisfied there was no intent to de¬ fraud, but not saying that under the law tlie settlement was wrong or illegal, which would have been a confession that his own conduct had been oppressive. There has, therefore, been no change of position or opinion what¬ ever on the part of Judge Davis, llis con¬ duct has been entirely consistent and honor¬ able. Tlie law undoubtedly allowed him fees in such cases, but the fees did not depend up¬ on fraudulent Intent, and the fact of fees did not release him from his duty to advise the government. As for letters to Jayne, they alluded to cer¬ tain just and lawful dues of his office, which had not yet been paid, and which ho wished Ja3me not to forgot. Judge Davis was then upon the Supreme Bench for fourteen years, and his letters could not mean that he wished business from .Jayne. So in regard to the ex¬ pression that all trouble would have been avoided had the settlement been made as agreed, it refers to the long and angry con¬ troversy in the case of Phelps, Dodge & Co. The evidence in the whole affair shows clear¬ ly to an impart.al mind tlwt Judge Davia’a conduct throughout was that of an honorable lawyer. Nor is there the least support afford¬ ed by it for the bitter calumnies to which he has been subjected. That constant and ma¬ lignant hostility, however, is only one of the penalties which a resolute and incorruptible magistrate must expect to pay who has made himself obnoxious to organized and powerful rascality. It was a striking refutation of the slanders which have been uttered against him that at the late dinner of the Chamber of Commerce Judge Davis should have been called upon by Mr. William E. Dodge in these words, which were received with immense applause : “ We had anticipated the pleasure of having our highly honored Chief Magistrate, Gov. Dix, respond to the next toast, but a telegram has been received expressing his regret that the pres.sure of public duties will not permit him to be present. I shall ask a gentleman to take his place who has honorably filled manj' high positions in our State, and has re¬ cently commended himself to the esteem of our best citizens by his honest and impartial trials and condemnations of the men who had so long plundered our city government, though he has also secured the enmit)' of those who sympathized with their crimes. He has also taken a noble stand in the effort to secure to our merchants a revision of our revenue laws. “ I will oall on the Hon Noah Davis.” liEPORT OF THE COMMlTTIfE OF WAYS AND MEANS, AND ACTION THEREON IN THE HOUSE OF Rl’TRESENTATlYES. The Committee of Ways and Means of tlie House of Representatives, after completing their investigations in respect to the proceedings of Cus¬ tom House officials, under the several Acts of Congress authorizing the dis¬ tribution of moieties, the employment and rewarding of informers and the arbitrary seizures of books and papers, gave judgment on the whole sub¬ ject (and by implication also upon the case of Phelps, Dodge & Co., which, as already shown, was made a “pivotal case” before them), by reporting on the 19th of ^May, 1874, through Hon. Ellis H. Roberts, of New York, a bill, which contained the following, among other provisions: Repealing allprovisiov.^ of law iivder which moieties of amj fines, penalties or forfeitures, or any share therein or commission thereon, are paid to inform¬ ers or officers of customs, or other officers of the United States; and prodding that from and after the dale of the j)assage of the act the jmoceeds of all fines, penalties and forfeitures shall be paid into the Treasury of the United States. Repealing all provisions of law authorizing the arbitrary seizure of hooks and papers, and in lieu thereof providing, that in all suits other than crimi¬ nal, arising under anj’’ of the revenue laws of the United States, the attor¬ ney representing the Government, whenever, in his belief, any business book, invoice or paper, belonging to or under the control of the defendant, will tend to prove any allegation made by the United States, may make a written motion, particularly describing such book, invoice or paper, and setting forth the allegation which he expects to prove; and thereupon the court shall issue a notice to the defendant to produce such book, invoice or paper in court, at a day and hour to be specified in said notice, and if the defendant shall fail to produce such book, invoice or paper in obedience to such notice, the allegations stated in the said motion shall be taken as confessed, unless his failure to produce the same shall be explained to the satisfaction of the court. And the said attorney shall be permitted to make examination of said book, invoice or paper, if produced, and may 156 CONGRESS AND PHELPS, DODGE & CO. ofifer the same in evidence on behalf of the United States. But the owner of said books and papers, his agent or attorney, shall have free access to them at all reasonable times pending their custody by the court. Providing that the Secretary of the Treasury, in lieu of moieties of fines, penalties and forfeitures heretofore given for information concerning frauds upon the revenue, other than direct smuggling, shall make suitable com¬ pensation to persons giving original information to the Government; but that such compensation shall not, in any one case, exceed the sum of five thousand dollars. Other provisions, limited the fine to be inflicted on any importer for fraudulent undervaluations to the sum of five thousand dollars, and forfeiture of such items of merchandise to which the fraud relates; al¬ lowed a jury to pass separately upon the question of fraudulent intent; and forbid the maintenance of any suit or action on the part of the United States for the recovery of any fine, penalty or forfeiture, unless such suit or action shall be commenced within two years after the time when such fine, penalty or forfeiture shall have accrued. Another section also pro¬ vided, that when any goods shall have been once entered at the Custom House, all accruing duties settled and paid, and the goods delivered to the importer, such settlement and deliver\q in the absence of fraud, and in de¬ fault of protest from the importer or his agent, shall be final and conclu¬ sive upon all parties. DEBATE THE HOUSE. SPEECH OF HON. ELLIS H. ROBERTS. In reporting this bill for the action of the House, Mr. Roberts spoke in part, as follows; Mr. Speaker, the measure which is now submitted for action commands attention by its importance. It deals with much of the machinery for the enfoi’coment of our customs revenue laws. It reduces penalties and for¬ feitures in cases designated. It submits the question of fraud to the court or jury as a separate issue. It reduces the period of limitation within which suits maybe commenced. It abolishes the whole system of moieties, while substituting moderate rewards for the detection of crimes against the revenue. It sweeps away the arbitrary processes for the seizure of books and papers. The aim is to do brave work toward the adjustment of AN EXTRAORDINARY HISTORY. 157 customs legislation to the standard of freedom and intelligence attained in our other statutes. This bill is the outgrowth of a careful investigation before the Committee of Ways and Means, which began on the Itth of February and closed on the 28th of April, and which is recorded in a volume of nearly three hun¬ dred pages (Miscellaneous Document, No. 264). Representatives of the merchants of the leading cities have been patiently heard, and the Com¬ mittee have sought information from the most competent experts in the service of the Government. They confidently present the bill as worthy to be enacted into law in the interest of the revenues, of public morality, and of commerce. APPEALS FOR ACTION. Rarely have stronger appeals come to Congress than tliose for the re¬ forms here proposed. The sense of wrong had grown to be profound and general among merchants. It found expression in passionate indignation, in glowing appeals, and in the more eloquent language of personal incident and unquestioned fact. A^our customs laws rankled like fetters. A^ou col¬ lected your revenues without armies, but hate was setting in the hearts of those who saw their neighbors crushed about them. You wrung your for¬ feitures from the careless as well as the criminal, and the enormity of the penalty made the offence appear trivial. Ruin trod in the footsteps of officers. The emoluments of prosecutors and their attorneys exceeded the salary of your President and of all the Justices of the Supreme Court. The informer had but to “ strike,” and strong men grew pale, great houses tot¬ tered, while spoils were gathered in by a charmed circle. OFFENCES HAYE BEEN COMMITTED. Offences have been committed against the revenue. But crime may be cultivated instead of being prevented. Cruel and extreme penalties culti¬ vate it. If it be fraud to misconstrue a statute, crime is inevitable. At the best, attempts will be made to defraud the revenue. They will increase, and the chance of punishment will be diminished, whenever public senti¬ ment pronounces the laws unduly severe, and their application harsh and oppressive. DUTY TO REMOVE JUST GROUND OF COMPLAINT. The first duty of the Government is to remove every just ground of com¬ plaint against the laws and their administration. When that is done, en¬ force them without fear or favor. Our institutions depend on the good will of the citizen. For the collection of the revenue, one of the primary 158 CONGRESS AND PHELPS, DODGE & CO. essentials is the moral support of those who pay. This has been to an alarming degree lost. Sympathy has been aroused for those charged with offences against the customs. Penalties enforced in accordance with the letter of the law have excited odium. The machinery of a past age, the rigors of the war period, the monstrous forfeitures of our system have borne their natural fruit. Violation of the laws has ceased to affix oppro¬ brium. Their enforcement carries a taint as in the case of the old fugitive slave law. DEMORALIZATION OF IMPORTERS. We have heard general denunciations of demoralization among import¬ ers. Commerce is. not a prohibited occupation. Men honorable in every other relation, an entire class, including those who bear the ark of religion and the sacred fires of art, and who sustain the very fabric of society, can¬ not be all knaves in their transactions with the Government. If they be offenders, provide penalties against them which can be enforced by the courts. Let them be certain, and not dependent upon the temper of cus¬ toms officers, nor the discretion of the Secretary of the Treasury. Your fines and forfeitures are now so enormous that suits begin with compromise and often end in remission. ODIUM WITHOUT PROFIT. The Government bears the odium of cruel extortions without their profit. Our statutes array merchantsin hostility withoutadvantage. The honest im¬ porter is annoyed and terrified by the shadow of ruinous penalties never col¬ lected. It will cost nothing to change this situation. Very much can be gained. Those who pay our duties are citizens. They are interested in our insti¬ tutions. Besides their money interest in an equal enforcement of the laws, they are an essential part of the constituency from whicli the Government proceeds and on which it depends. Their aid is better than police. Their support is better than armed men. Against their sense of wrong, against their aroused moral sentiment, laws and officers can do little. Just laws, reasonable penalties, humane enforcement, enlist the conscience, the inter¬ est, the active support of those who are affected. If we retain the pro¬ cesses, the spirit, the harsh severity of barbaric ages in laws and admin¬ istration, we must expect the restiveness, the attempts at fraud, the moral resistance which extreme measures always invite. Mr. Speaker, the purpose of this bill is to protect the liberties of the citi- z;en, to mitigate enormities in the statutes which have interfered with their due enforcement, and to provide sure and certain methods of collecting the customs revenues. The changes are in some respects radical, but they are demanded by the interests of the Government and of morality. Instead of AN EXTRAORDINARY HISTORY. 159 demoralizing emoluments to officers, instead of arbitrary processes and ab. solute confiscation, the bill appeals to the good will of the citizen and to that certainty of enforcement of judicious penalties which are the only trust of a free government. Sir, let Congress abolish moieties ; let it pro¬ tect the secrets of business and friendship from arbitrary invasion; let it free commerce from cruel and unreasonable penalties; let it punish inten¬ tional fraud more than carelessness or honest misconstruction; let it thus enlist the conscience as well as the interest of the merchant in the collec¬ tion of customs, and you mark an epoch in legislation. SPEECH OF HON. JAMES B. BECK. Mr. Roberts was followed by Mr. Beck, another member of the Committee who spoke as follows : Mr. Speaker— No question has engagefl the attention of the Committee on Ways and Means so earnestly since I have been a member of it, as that now submitted to the House for its action. Upon a careful examination of the subject we found a system of laws in force which are in many regards a disgrace to any civilized country, among the most odious of which are those which allow the seizure of the books and papers of merchants by the officers of the Government to be used as evidence against them in suits for penalties and forfeitures. We found that the Government divided the spoils, often obtained by the most corrupt and dishonest means, with the most disreputable men, making the whole people their partners in the most scan¬ dalous combinations against individual citizens. We found excessive fines and forfeitures inflicted and imposed, regardless often of whether guilty in¬ tent existed or not, and men deprived of the right of trial by jury upon that most vital question. In short, we found such a state of things as rendered some such bill as we have presented necessary in the opinion of the Com¬ mittee. We may have gone too far, or we may not have gone far enough in our efforts to reform and remedy these evils; it is for the House to decide. My duty, especially as a member of the sub-committee which drafted it, is to inform the House why I agreed to the leading features of the bill as pre¬ sented. The first section repeals absolutely, and I hope forever, all laws and parts of laws which authorize the Government or any officer of it, on any pretense whatever, to seize the private books and papers of citizens and force them to furnish evidence against themselves in proceedings for penalties and for¬ feitures. The law giving the Government that right was first enacted in 160 CONGRESS AND PHELPS, DODGE & CO. 1863, in the midst of the civil war, when laws were silent, when constitu¬ tional rights and congressional limitations were too often disregarded, when the plea of necessity justified all usurpations, and the complaint of the citi¬ zen was generally disregarded both in and out of Congress by those in au¬ thority. Such a law could nev.'r be enacted in time of peace by the repre¬ sentatives of a free people. Sir, it is impossible to read the testimony taken by the Committee on this subject without feeling not only that a deep and burning wrong is done to the citizen by dragging his most sacred and confidential papers into court to convict him of crimes and misdemeanors which degrade, disgrace and bankrupt him, but that the Government is degraded and disgraced in the eyes of the civilized world by the foul means it resorts to for the purpose of extorting evidence against and money from its citizens. HOW THE CASE OF PHELPS, DODGE & CO. APPEARED TO THE COMMITTER Take the case of Phelps, Dodge & Co. as an illustration. I select that because, in the language of Detective Jayne, of its “having been made a sort of pivotal case,” one (as Mr. Jayne assured Mr. Dodge in the presence ot Judge Davis, and repeated substantially before the committee) of the worst he ever saw, in which he charged that for a series of years deliberate attempts to defraud the revenue had been made by systematic perjury and false invoices and undervaluations. That firm had carried on business in New York for many yoars ; they had imported goods to the value of between three and four hundred million dollars ; they had paid in duties to the Government over $50,000,000 ; their good name and integrity had never been assailed. But they had a thief in their employ, a trusted, confidential clerk, who had access to all their books and papers. Tempted, perhaps by Custom House officials, who would share the spoil and avoid the disgrace, he violated the trust reposed in him, be¬ trayed his benefactors, mutilated the books he was bound by every principle of honor and of honesty to protect and preserve, stole the private papers of his employers, and carried the evidence of his own shame and dishonor to the Custom House detectives and officials, who entered at once into partner¬ ship with him in the nefarious scheme of robbing respectable merchants for private gain, and brought the whole power of the Government to sup¬ port them, under pretence that they were protecting our revenues. Affi¬ davits were made at once, warrants were ordered, the members of the firm were arraigned, denounced, and threatened with ruin, degradation, infamy and imprisonment if they did not consent to place all their books and papers in the possession and at the disposal of the harpies who were determined to prey upon them. Conscious of innocence, while fearful of exposure which AN EXTRAOKDINAIIY HISTORY. 161 would not fail to injure their credit, especially abroad, where people assume that Government will not bring such charges against a citizen unless they are certainly true, they agreed at once that all books and papers desired might be taken, and they were carried to Jayne’s office by the cart load. Once in possession of all the evidences of guilt or innocence, the next step was to proclaim to the world through the press the guilt of the firm, and to so magnify the case as to make the settlement on any terms the only alternative to escape from absolute ruin. Claims, the nature of which were never explained, were asserted, amounting to $1,150,000, and a compromise was finally effected at $271,000. I propose to let Mr. Dodge tell how and why it was settled. Mr. Beck here quoted at length from the speech of Mr. Dodge before the Committee, and continued as follows: It requires no argumentc to prove how utterly helpless these merchants were in the hands of such a power, stimulated by such incentives to fasten guilt upon them. Not one of these men could get a dollar if they did not get it out of their victims; all could reap a rich harvest if they could by any means force them to yield to their demands. The costs in court, though nothing was done, amounted to $8,145 09. The share of the dis¬ trict attorney in the $211,000 was over $5,400; that of the collector, naval officer and surveyor was $21,906 01 each, or $65,118 03 in all. Jayne got $65,718 03, which he was to divide with the thief who stole the papers. General Butler was paid a large fee out of his and the thiePs portion by Jayne. How much Senator Conkling got as adviser of the Custom House officers does not appear. They failed to avail themselves of our invitation or notification that we would gladly hear them if they had anything to say, so that we were unable to prove what their private arrangements with counsel were. With such an array of officials against the merchants, what was an ap¬ peal to the Secretary worth ? Every officer on whom he could rely for infor¬ mation was directly and largely interested in having the highest penalty imposed. The leading administration Senator, and one of the ablest repub¬ lican members of this House, were their advocates and attorneys. What private man stood any chance with the Secretary under such circum¬ stances? What Secretary, under such an administration as this, would dare to oppose such a combination ? Sir, it was apparent from the first that they had to pay whatever sum they were told wmuld satisfy the rapa¬ city of their persecutors, and they paid it. Any of us tvould have done as they did. Mr. Schultz stated the case vigorously and truly Avhen he said; 11 162 CONGRESS AND PHELPS, DODGE & CO. Every official with whom he comes in contact, except the Judge and the Secretary of the Treasury, have a direct pecuniary interest against the merchant. Let the law be so amended that these two functionaries can receive a portion of the moieties, and then so far as human motive can he controlled by sordid influences ‘ a perfect system of confiscation exists. With their books and papers in the hands of tlieir enemies, their credit gone, their business paralyzed, tlieir good name blasted by the action of the Government; charges of fraud and robbery, the nature of tvhich they did not understand, which were, of course, magnified and circulated to all parts of the world where they had business connections by their com¬ petitors in trade, ait the officials knew and intended they should be—these tilings were, as Mr. Dodge truly said, “ the terror held over us, the pistol at our ears. That,” he aded, “ was the reason we were anxious to have it settled even by the paying of $270,000.” With seven eminent lawyers engaged, and constantly contriving how^ to catch them; entrapped for alleged fraud not known to them, and never explained, of $1,600 in five years, though in that time their over valuations, of which the Government got the benefit (all of -wbicli were artfully concealed by those wdio held the books), amounted to hundreds of thousands of dollars, altogether constituted one of the most shameless cases of extortion I ever heard of. And this was the pivotal case. Other cases brought before us were nearly^ as bad. Perhaps that of Mr. Caldwell, of Philadelphia, taken in all its relations, was worse. The extor- tortion of $50,000 from Woodruff & Robinson was not much better. After patient hearing and careful study I became thoronghlj’- satisfied that the safety of the citizens and the good of the Government alike required that all laws authorizing the seizures of books and papers on any pretext what¬ ever, should be at once repealed, and that all moieties to Custom House officials and informers should be abolished, except in cases of smuggling, of which I will speak presently. I would go a step farther, and prohibit by positive law, under the severest penalties, all Government officials and all members of Congress, wlietlier Senators or Eepresentatives, from being employed, either directly or indirectly, as counsel for spies, informers. Custom House or other officials, in any matter relating to the revenues of the Gov- einment. They are now prohibited by law from pi-osecuting claims against the Government, either in the Court of Claims, before the Departments, or the Committees of Congress. They should not be allowed to use the power and influence which official position gives them to make money out of the citizen under the pretences that they are serving the Government, in any court or before any tribunal. Representative men, wliciher of States or people, ought, so long as that AJSr EXTRAORDINARY HISTORY. 163 relation exists, to be prohibited from taking part in or making money out of controversies between the Government and its citizens on eitlier side. I shall try to so amend this bill as to attain that end. Now, members of Congress are sought for and emplo 3 red by spies and officials, not as other men are, because of their ability as lawyers, but because of the influence, political or otherwise, they are supposed or known to exert over the Secre¬ tary of the Treasury and his subordinates. I repeat, and his subordinates; because the proof in the Sanborn contracts shows conclusively that nearly, if not quite all, of the decisions of the Secretary are in fact the decisions of mere subordinates, his name and apparent authority being only official routine. Let it be remembered that these subordinates are not put or kept in their positions by the Secretary; they may be, and often are there against his will, placed and kept there by the influence and authority of the Senators and Representatives whose fees depend upon their de¬ cisions. The spies and other interested officials soon learn what member of Con¬ gress can best control official action in the Treasury Department, and that member becomes their hired attorney. If the officer who has the case sub¬ mitted to him was ever so honest, it is unreasonable to expect that he will dare to disobey, and he will not be inclined to disoblige the man who put him where he is, and who can have him removed and a more pliant tool put in his place it he fails to decide as he is ordered or expected. As con¬ ducted now, such proceedings are a mockery and a farce. Does any man here believe, for example, that an)" subordinate, or even the present Secre¬ tary, would dare to disobey the known wishes of Senator Conkling and General Butler—both of whom, as Mr. Dodge, Judge Davis and Mr. Jayne show, were acting as counsel for the officials or informers in the Dodge case ? Both, of course, were selected because of their well known political power and influence in high places, and both were prominently exhibited to the merchants as a standing menace to enforce settlements on the terms demanded. Mr, Kasson,— I hope the gentleman will say that there was not a particle of evidence indicating that Senator Conkling received anything. Mr. Beck. —There was evidence that he was the counsel and adviser of these men. The gentleman will And it in the evidence of Judge Davis, Mr. Dodge, and others; and the men who employed him, and whose counsel he was, refused to come before the committee on a p>olite invitation, and there¬ fore we could not develop what the facts were. Mr. Kasson, —In the interest of justice I suppose the gentleman will allow it to be stated in this connection that the evidence was simply that the Senator was in the room on one occasion reading the United States statute as a citizen simply, I wish the gentleman to do justice in the matter. 164 CONGKESS AND PHELPS, DODGE & CO. Mr. Beck.— Well, Mr. Dodge, in liis pworn testimony, says that Senator Conkling was in New York iii consultation Avitli these officers at a time when for two days the question was wliether the amount paid should be $500,000 or $2U,000. There is evidence that he was there acting practi¬ cally as counsel, and his clients should have come before the Committee and told them what they paid him, if they paid him anything, or if they did not pay him anything. Mr. Hale, of New York.—Will the genth man permit me a moment in this connection ? I think he is doing injustice to a gentleman, which I am sure lie wmuld not intend to do. Mr. Beck.— I have not time to yield for interruptions. I have done Senator Conkling no injustice. I have made no charge against Senator Conkling. I say that the testimony shows that he was there as counsel for these men. Mr. Hale, of New York.—The gentleman is certainly in error in that regard, Mr. Beck.— He was counsel and advised with them, and Mr. Dodge swore that he believed that be helped to bring dowm the amount from $500,000 to $271,000. What 1 call attention to is this point: What chance had the merchants in that state of the case ? wTiat chance wms there that justice rvould be done to them, when the surveyor, the collector, the naval officer, the district attorney, the special agent, the informer—all the officials to whom he could look—were interested, and bad been paid bribes, if you please, to decide against the merchants, and a leading Senator of the Ad¬ ministration party was their adviser, and one of the ablest republican mem¬ bers of the House was counsel for the informer? Under circumstances like these wms it not evident that this firm of merchants had to pay what¬ ever was demanded ? Would not you have done it ? Would not any of of us have done it ? I would, I repeat, by laws which could not be evaded, make such things impossible, lill it is done appeals to the Secretary are a delusion and a snare. I hope the House will hereatter prohibit Kepresentatives tiom interfering in an}' way between the Government and the citizen. Congress should be the highest court in the land, and its members should all be free to listen without partiality or prejudice, certainly w'ithout personal or pecuniary interest, to all the appeals of the people. Mr. Ellis H. Roberts, —I would ask the gentleman from Kentucky if he has any reason to mention the name of the Senator here ? He knows very ivell that Mr. Dodge expressly testified that the Senator he names he sup¬ posed was there not as counsel. AN BXTRAORDINAKY HISTORY. 1G5 Mr. Beck. —Who said so ? Mr. Ellis H. Roberts. —Mr. Dodge. Mr. Beck. —Mr. Dodge did not say so. Mr. Kasson. —If the gentleman will allow the language referred to to be read, it will satisfy him ; if not, I will read it myself when 1 get the floor. Mr. Beck. —Senator Conkling was there reading the law and c.xpounding its bearings as the friend and adviser of the Custom House officials—a thing which he should not be allowed to do, that no Senator or Representative ought to be allowed to do, and if my amendment prevails, they will never do it in the future. Mr. Ellis H. Roberts. —I would ask the gentleman from Kentucky whether, as a lawyer, he thinks that it is a just thing to say that a man is guilty of receiving pay because no evidence was submitted that he did not receive pay ? Mr. Beck. —This Senator had a right to be there under the law. Mr. Ellis H. Roberts. —Very well. Mr. Beck. —I am not complaining about that; but I deny that such a law should exist. I deny that a man who is a leading Administration Senator should have a right to go and advise the Custom House officers against a citizen and to give the weight of his influence, his name, and his authority against the citizen. Mr. Ellis H. Roberts.— The gentleman from Kentucky says that the Senator to whom he refers had a right to be there. Mr. Beck.— He did. Mr. Ellis H. Roberts. —Did not Mr. Dodge also expressly disclaim any belief that he was there other than as a citizen ? iMr. Beck.— I will read for the third time the testimony of Mr. Dodge upon that point : Mr. Foster.— I think you stated wlien you -were hero the other day, Mr. Dodge, that there were lawyers, members of Cengre.ss, who were acting as counsel for these parties. Was not that a plain question ? Mr. Dodge.—I did say so. Mr. PO.STER.—Well, I find that this Committee and myself have been subjected to criti¬ cism because we brought out the name of only one such member, while there were others Mr. Dodge.— I only intended to speak of two. I have no hesitation in stating who they were after all that has b jen said before this C unmittee. I have purposely avoided naming them heretofore, but if the Committee wish I have no objection. The CHAiRiiAN.—You may answer the question. Mr. Dodge. —I suppose there is no doubt in the Committee’s mind on the subject uow, as 166 COKGRESS AND PHELPS, DODGE & CO. it was admitted last night bj' the special agent that he did employ, in one case especi¬ ally, General Butler as counsel. T will add that Senator Conkling was in New York and in consultation with these gentlemen at the time when for two days the question hung whether this thing should be settled or not, and hung simply on the fact that Mr. L.aflin said the crime was so enormous that, so far as he was concerned, he never would con¬ sent to settle it short of the payment of $500,000 by Phelps. Dodge & Co. I think Senator Conkling advised him to do better. I only wish he had stuck to it one day longer. ^Ir. Hfxk.— The naval officer, Mr. Laflin, is well known to have been appointed by the Senator ; and the Custom rinpr, if you force me to go into politics, is supported by this Administration, of which that Senator is a leading friend, for the purpose of raising money this way, and by the use of the money thus acquired, thus stolen from the merchants, to carry out the party machiner 3 \ I might go a good deal further in that direction, but I will not, for my time is running fast. I might go on and show that when these parties see where they can make money out of the citizen, they do not wait to prove what he was. Mr. Dodge was loyal enough. I am told he gave $25,000 to help elect your present President. But these men were after the life blood of this firm, and they came very near getting it. But, Mr. Speaker, I must hasten to notice other important changes in the law proposed by the bill now before us. Moieties and seizures are twin abominations. They ought to die together and be consigned to the same ignominious grave. Without the moiety S 3 ’stem seizures would never liavc been resorted to. The enormous rewards offered and the temptations placed before bad or even weak men are too great to be resisted. Under them private virtue and honor as well os official integrity give Avay, and a S 3 'stem of corrupt espionage and robbery has grown up which, if not ci nshed out by vigorous laws, will destroy what little of honesty is left in the public service, together with all that makes the business relations of men either respectable or safe. Worse, if possible, even than that, the money extorted by robbery and fraud is so distributed among the officials that those who act as judges and arrange the terms of settlement, the men on whose statement of fact the becrctary of the Treasury has to rel 3 ' for the truth, are all paid to decide against the citizen. Take the Dodge case again as an illustration. The Surveyor, Naval Officer and Collector were each bribed to the extent of $21,900 to decide against the merchant whose books and papers they held and used, though obtained from a known and acknowledged thief. Jayne and bis accomplices got over $65,000, while the United States Attorney, clerks and marshals pocketed $8,145 as their share of the spoils—every dol¬ lar of these immense sums being dependent on their success in coercing a AN EXTRAORDINARY HISTORY. 167 compromise or securing a conviction. AVlicrein does all this differ from the bribery of a judge or jury ? The very fountains of justice arc corrupted, and all that emanates from such polluted sources is of cour.se impure. More degrading than all, more humiliating to us as Representatives, and to the proud and honest people we represent, is the fact that the Government is by legislation made the partner of thieves. Think of the American people, under the folds of the Star Spangled Banner, boasting of the ir advanced civilization and pretend¬ ing to look with scorn and contempt on all other nations because of our superiority in protecting the rights of our citizens with Magna Gharta, the Bill of Rights, habeas corpus, and all the bulwarks of liberty crystalized in our own great charter, sneaking into a den in the Custom House and pay¬ ing over to their detective, Jayne, $1)5,118 out of $271,000, which they had c-vtorted from citizens against whom tliey could only make up a claim for $1,600, even after they had searched their books and papers for five years, concealing overpayments twenty-fold in excess of the claim, and whisper¬ ing in his ear to pay $40,000 as his share of the profits of the speculation to the thief who had stolen the papers of his employers, who by all laws human and divine should have been spurned as an outcast and doomed to a felon’s cell, only requiring him to be sure and keep the facts concealed. The system is a disgrace to our civilization, a reproach and a scandal in the eyes of all nations ; one which has been condemned by our Secretaries and committees, and is only maintained by the influence which political organizations and party leaders exert to uphold it, because the Custom House officials out of their extortions can be made to furnish the money in New York, Boston and elsewhere, to control primary elections, pack con¬ ventions, stuff ballot boxes, and do the other dirty work for their political patrons. JAYNE’S CHARACTER. I propose to say a few words as to the men who are employed to do this dirty work, and the means they employ to accomplish it. Mr. -Jayne is a type of the men who become informers under the moiety system. I select him because he is one of the best of his class —intelligent, vigilant, well informed, and, so far as I know, conforming strictly to the laws which con¬ ferred authority upon him. His underlings and retainers are in all the prominent mercantile houses of Now Yoi'k, ready to ruin the men whose devoted friends they profess to be—perhaps making false entries for years, so they can, when the penalty becomes an object, charge their own frauds upon their victims; noting and concealing every irregularity, so as to pre¬ vent its correction, until the proper time arrives to lodge their information. His operations will illustrate the system. He spoke at great length before 168 CONGRESS AND PHELPS, DODGE & CO. tltc Committee of Ways and Mean?, and he was examined some years a|ro before a committee of the Senate. Perhaps it would be best to first notice specimens of his testimony before the Senate Committee as to the means resorted to in order to procure evidence or confessions from his victims. ( Mr. Beck here quoted from the mivvies of Jayne’s investigation, already given in the speech of Mr Brainard before the Ways and Means Committee, and continued:) This picture needs no fillinjr up; it stands out on the canvas. The de¬ tective toying with the handcuffs, putting them on his own wrists to let the doomed man see how they worked; telling his victim what a wicked fellow he had been; holding up to him the terrors of the law; changing his tactics according to the subject he had to deal with ; urging frank confes.sion as the safest and best course, furnishes such a portrait of the prostitution of every principle of justice and law that it disgusts a man to think of the scene. Mr. Dodge thus describes the ordeal he had to pass through when his books and pajiers were taken from him. (TIfr. Beck then quoted from the description of his first interview given by Mr. Dodge, in his speech before the Committee, and the surrender to Jayne for unrestricted examination of the books of the firm, and continued :) Of course (on getting the books) he got all he wanted, and so used them as to secure for himself and his partners $135,000, the Government getting the other half for protecting them from responsibility for the extortion. It seems to me that no argument is needed to prove that such a system should no longer be tolerated; the repetition of such wrongs ought to be rendered impossible. The effect of it is terribly demoralizing on our own officials. Lured from the performance of duty by hope of rich rewards, they see,' it may be, day by day irregularities or technical violations of law which they know are unknown to the merchant; their plain duty is to inform him at once and prevent a repetition of them; their interest is to watch and wait so as to allows them to accumulate for months, it may be for years, and when the aggregate will secure penalties and forfeitures sufficient to gratify their avarice, make the seizure and demand the reward. These things, as the proof before us showed, ai’o of constant occurrence, and will continue till we remove the motive for their continuance. Mr. Deck concluded as follows; iffr. Speaker, please hold your gavel one moment. I have sought to avoid politics in this discussion, and think I have done so wonderfully well, considering the temptation; we avoid them in the Committee of Ways and !Means, as the bill we have reported shows. But in closing I will show that the testimony laid by us before the House, which ought to be in the hands of every citizen, proves, and proves conclusively, that the Custom Houses AN EXTRAORDINARY HISTORY. 169 as now managed are sinks of iniquity, political dens supported by fraud, corruption and extortion upon the commerce of the country. Think of it, sir; $211,000 taken from one firm when the debt was only $1,600. The report of the Secretary (Executive Document No. 124) shows that during this administration there has been paid at the port of New York: To informers. To the Collector.... To the Naval Officer To the Surveyor. .. . $491,342 26 114,137 57 162,286 62 159,476 04 And at the port of Boston during the same period: To informers. To the Collector. To the Naval OfBcer. To the Surveyor... .. $152,798 18 50.816 40 50.817 74 50,817 60 While the collectors were receiving as salaries $6,000 a year, the naval officers $5,000, and the surveyors $4,500 each besides. Sir, these things ought not to be. No country can prosper while they are possible; no administration can be successful when the country is sat¬ isfied that it sustains, endorses and approves them. It is a system which converts our Custom House officials into mere political tools and tricksters, whose usefulness is measured not by their faithfulness in the collection of the revenues but in the power they can bring to bear to control primary elections, pack conventions, stuff ballot boxes and subvert the fundamental principles of republican government in the interest of the political tricksters to whom they look for support, and on whose influence they can rely to sustain them against all efforts at exposure. Here the hammer fell. JAYNE’S PICTURE, AS DRAWN BY MR. D.4WES. Mr. Dawes, Chairman of the Committee of Ways and Means, followed Mr. Beck in the debate, and in the course of his remarks expressed his opinion of Jayne and his associates as follows: Sir, who is the informer? He is to have half of the whole. The offi¬ cials take the other half and divide it into three parts. His is the lion’s share. Sir, the informer in every position of society, in every place, and in every calling, is an odious and despised being. Everybody shrinks from him, no matter what be his position or his calling. He that goes about making a business of informing against his neighbor, so-shocks the com¬ mon sense of justice, decency and honor in alt mankind, that he is univers* 170 CONGRESS AND PHELPS, DODGE & CO. ally despised. But let liini do it for pay; let it be understood that he goes lip and down the earth paid to inform against his fellow men, and the intensity of the feeling of hatred with which he is regarded and the feeling that he ought to be hunted around the earth is increased tenfold. Add to that that he is to have half of what may be made out of his informing. He is bad enough when he volunteers without compensation from any motives of malice or otherwise to inform against his neighbor; he has no place whatever in decent society. But when he does it for pay, much more when he is to have half of the proceeds of his cursed employment, the door of decent society ought to be and will be shut against him. The leper may be tolerated among men, for his leprosy is his misfortune. The man that carries about him a loathsome disease, that is not his fault but his misfortune, engages the charity of the world to build a hospital for him and to care for him with pity and compassion. But the vile, festering, putrescent informer, who goes about the earth assured of one half of what he can make by his informing, finds no place as yet where decent men will harboi-, or countenance, or associate with him. Shall the Government of the United Spates take the wages of his sin and his inicpiity and divide it with him ? It is he who is the last refuge of this system. One after another they let go, or give up and throw overboard, and say we will not defend them. We will not defend an ofiScial, ap¬ pointed by the Government perhaps, for his good character and under the control of the Government in his actions, subject to removal if he abuses his trust; no, we are willing to say that he shall not have this; but the man who is under no control, the volunteer who cuts himself loose thereby from society, without either calling or position, forfeiting by the very will¬ ingness to take this every other position of trust and confidence—it seems it is thought best that we should save him, it seems best that we should save and guard him by new legislation, that he may have one half or one quarter, it may be, of all fees and penalties and forfeitures. We gtiardthis man, roving around among the merchants of the cities of New York, Boston and Philadelphia, with money enough, the fruits and promises of his suc¬ cess, to enable him to furnish the mean's that will invade the confidential relations that exist between the merchant and his clerks, tainting the most ' sacred trusts, lying in wait for the unwary, as it was shown before the Committee of Ways and Means at the desk of the Custom House, and see¬ ing the merchant unwittingly put in his foot, by omitting, it may be by accident or by ignorance, or by any of a thousand ways consistent with his honesty, to conform to the most complicated system of revenue laws that exist in the world—standing, I say, at the desk, and seeing the merchant from day to day openly and unconscious of anything wrong, making AN EXTEAORDJNART HISTORY. 171 mistakes in his invoices, with a law behind him which says that a mistake in one item forfeits the Avhole invoice, and then when they are piled up by the dozen upon the desk of the Custom House, going and informing against him and getting one quarter of the forfeitures! And if the mer¬ chant appeals under that law to the Collector of the Port, the law makes that Collector the appellate court. If he decides that-this man has inno¬ cently, without intention, been simply guilty of a technical neglect, he lets him go, and he does not himself get anything But if he decides that the merchant is guilty, he gets one quarter. The court that this law has pro¬ vided for the merchant to appeal to, to decide whether or not he has con¬ formed to the law, has one half of all the penalties if he decides that the man violated the law, and if he decides that he has not so done, he does not have anything. The district attorney, who is put there as the officer of the Government in a serni-judicial character to see that justice is done be¬ tween the Government and the accused, gets two per cent, of all, and the informer gets what I have told you. Through the portals of the ports of New York and of Boston enters seven eighths of the commerce of the country, and, consequently, seven eighths of all the wealth that comes to our shores in the vessels that plough the deep and whiten every ocean with their sails. Some of the men who manage this commerce are styled contemptuously “merchant princes.” Some of them have become such by industry, frugality, and fidelity to busi¬ ness relations with everybody else certainly but the Government. Some of them are young and enterprising men, beginning without capital and growing by devotion to an honorable calling, most honorable in all nations and all ages of the world, up to a competenc}^ and an independence, and to command the respect of mankind w'herever they are known. What in their characters, what in their lives, what in their dealings with their fel¬ low men that should lead us to infer that in their dealings with the Gov-- ernment of the United States there is any such mysterious and malign spell upon them that we cannot fix our laws so plainly and the machinery for their execution so simple that they, as others, can walk into our courts and feel that whether the judgment be for or against them that judgment is a righteous and a just one, commanding their respect as well as their obedience? On the other hand, this very system itself has just precisely the opposite effect. It teaches merchants to devise means of evading the law and the administration of it. The result is to drive high minded and high toned merchants out of business, and their places are taken by that class who take their chance in the world even by a violation of the law for the profit which in the long run they think it will yield, or it drives the importing business of this country into the hands of foreigners, who from 172 CONGRESS AND PHELPS, DODGE & CO. the other side of the water send their goods here to irresponsible con¬ signees, who have nothing to lose and therefore nothing to fear. Such is the result fast coming to be the common law in the mercantile community of this country under the system this bill hopes to remedy. The wise, pru¬ dent man is seeking some other calling or absolute retirement rather than submit himself to the chances of accident and mistake that are inseparable from a complicated system, administered by men whose interest it is to let them pass into the grasp of the law, into the mistakes and pitfalls the law itself has dug for them, in order that the fruits thereof may come into their own coffers. It is a source of revenue that debauches the whole customs service of the country. Men abandon lioncst callings that bring them a moderate compensation, and seek an employment that brings them these large returns. A man who, in the short time we have been here, has gathered as his share of the moieties somewhere in the neighborhood of $400,000, was tempted from a quiet village, not many hundred miles from New York, where he was pur¬ suing an humble calling which yielded him a moderate compensation, to tender his patriotic services to the Government of the United States in the capacity of a Treasur}^ agent, in which he could act as informer. He now goes back to his native village, builds houses and stores, and steeples rise up there on which is written “ The wages of an informer.” Men leave the revenue service of the country, and when we ask them why they do it, they say they could not afford to stay there at that com¬ pensation. When we ask them what they do now, they say that they have gone into the business of collecting the revenues of the country at the halves. Everything now is being taken at the halves; fifty per cent, is the common compensation when ymu deal with the Government. There are men who have gone into a systematized, organiztM association, who go around this country and inform honest bondholders that there is interest due them here at the Treasury Department, that it is pretty difficult to col¬ lect it, and they will collect it for them at fifty cents on the dollar. Hun¬ dreds of thousands of dollars of interest money has been taken every year out of the Treasury of the United States by these men, who have turned their backs on honest callings and devote themselves to this fifty per cent, business. The official service of the United States is being sapped and mined, and no such thing as a healthy, honest public service for fair and reasonable compensation in the revenue service of the country can long be maintained unless reform something like this radical change in the administration of the Government shall be adopted. It does not stop with Jayne, nor with Sanborn, nor with men of that AN EXTRAORDINARY HISTORY. 173 class. It spreads like a contagious disease, and every official who comes in contact with these men, or with this service, becomes uneasy in his call¬ ing, unwilling to toil as he has done, and therefore he turns his back upon an honest and honorable position the moment he can find an opportunity to fill his pockets under this system of revenue service, which has existed now for the last ten or fifteen years, growing every year in the enormities of the amounts gathered in by these men, like a ball of snow rolled up little by little, until it becomes the great and overshadowing complaint that is now presented by this report of your Committee. VERDICT OF THE HOUSE OP REPRESENTATIVES. At the conclusion of the debate, which was participated in by ^Messrs. Wood, of New York; Burchard, of Illinois ; Niblack, of Indiana, and Kasson of Iowa (all members of the AYays and Aleans, and all speaking in suppoit of the action and report of the Committee), the bill was amended by striking out that portion Avhich gave the district attorney power to com¬ pel the production of books and papers, and in one or two unimportant particulars. And then the House of Representatives gave its verdict on the chafacter of the transactions reviewed; the action of Jayne and his associates ; and the treatment of the firm of Phelps, Hodge & Co. and other merchants by the Government, by passing the bill without one dissenting voice or vote; a result almost unprecedented in the annals of American Congressional Legis¬ lation. THE MOIETY SYSTEM. ' PASSAGE OP MR. ROBERTS’ BILL BT THE HOUSE OP REPRESENTATIVES—A TRIUMPH OP THE MERCHANTS — ARRAIGNMENT OP CUSTOM HOUSE OPPICIALS AND INPORMEHS. [N. Y. Tribune, May 20, la74.] The prompt passage by the House of the Roberts moiety bill to-day, without any show of opposition, is an evidence of the sensitive¬ ness of members to public opinion, as well as a complete endorsement of the action of the Ways and Means Committee, in exposing the odious and oppressive operations of the horde of spies and informers who have made the New York Custom House appear like a den of robbers to the merchants of that city. Al¬ though the whole day was occupied by debate upon the bill, there was not a single speech made against it; even Gen. Butler held his peace, seeing how useless it would be to try to stem the current. Mr. Roberts’ speech was an admirably clear statement of the evils of the moiety system, and of the effect of the re¬ form proposed by the pending bill. Summari¬ zing its provisions, he said that the bill swept away arbitrary processes for the seizure of books and papers, abolished tlie moiety sys¬ tem, and substituted for it moderate rewards, provided, instead of a forfeiture of the entire invoice in the case of under valuation, a for¬ feiture only of the article under valued, and a fine of not exceeding $5,000, and, in case of the omission of any charges going to make up the value of an article, a penalty of double the value of the article. 'The object of the meas¬ ure in brief was, he said, to make all penalties so moderate as to be certain, and to make their collection the result of law, and not de¬ pendent upon the favor or vengeance of any officer. Mr. Beck, speaking as a democrat, was nat¬ urally more severe than Mr. Roberts upon Jayne and his tribe. With the materials fur- 174 CONGRESS AND PPIELPS, DODGE & CO. iiished by the testimony taken by the commit¬ tee he drew a striking sketch oJ: Jayne sitting in his dismal little den, where the gas light burned all day, setting forth the terrors of the law while dangling a pair of handcuffs before the victim who had fallen into his clutches, and occasionally trying them upon his wrists to increase the terror of the iioor merchant, until he had frightened him into complying with his demands. Another sketch was equally graphic and effective; he pictured Mr. Wra. 111. Dodge appearing before Jayne and the Custom llouse chiefs, all assembled, with Butler as their counsel and Senator Conkiing seated at Laflin’s elbow, expounding the stat¬ utes and declaring that tlie whole invoice was forfeited, but advising his friends to take less than the penalty of $500,000, upon which they were insisting. Messrs. E,oberts and Kasson declared that the testimony of Mr. Dodge did not warrant tlie statement that Conkiing was acting as counsel of the Cus¬ tom House officials; but Mr. Beck had a part of the testimony read wlierc Mr. Dodge ap¬ plied the term counsel very explicitly to the Senator. Jn reply, Mr. Kasson produced Mr. Dodge’s last testimony, in which the witness stated his belief that Mr. Conkiing was pres¬ ent by accident, and had no pecuniary inter¬ est in the case. Finally, Mr. Dawes came up, apparently as a reinforcement to the Senator’s defenders, with an extract from Judge Davis’ testimony, wdiich, when read, proved to be more damaging than helpful to their cause, for it showed that Mr. Conkling’s interpreta¬ tion of the law was all against Phelps, Dodge & Co., and in favor of Jayne. Speeches followed byMessrs. Kasson, Wood, Niblack aiul Bnrchard, and at the close of the debate Mr. Dawes took the floor and created something of a sensation by attacking the corruptions of the Custom House, and giving the Administration a few of his dexterous and peculiar back handed slaps. The passage of this bill, especially with the omission of the third section, is a great triumph for the importing merchants of the Atlantic seaboard. ACTION OF THE SENATE. The bill as passed the House came before the Senate for consideration on the 9tli of June, when a strenuous effort was made by the representa¬ tives of the Custom House interest to modify its essential features by amendments, which, if adopted, would practically have rendered the bill of but little value as a measure of relief and reform. All efforts in opposition to the tide of public opinion, however, proved futile, and the Senate after three days’ discussion, and rejecting every amendment essentially hostile to the objects sought for by the mercantile community, passed the bill on the llth of June, with only three votes recorded in the negative—Howe, of Wisconsin; Flanagan, of Texas; and Pease of Mississippi. The bill was subsequently signed by the President and became a law. The following article, entitled “ The Senate and the Moieties Bill,” appeared in the New York World immediately after the passage of, the bill (as amended) by the Senate; " The 'World’s special despatch on the Moiety Bill, printed Thursday, told the story of a victory won for the merchants in tlie United States by democratic aid and perse¬ verance. This victory is at present of the greatest significance. We have time and again exposed the out¬ rages worked by the revenue acts of 1863 and 1867. It was not the moiety clause alone that was involved, for that abuse was the oSspring of our tariff laws generations before. The Acts of 1863 and 1867 intro¬ duced espionage into the Republic. They were acts that the best lawyers held uncon¬ stitutional, because they allowed the seizure of books and papers for the purpose of mak¬ ing a merchant criminate himself. All that was requisite to perfect the sys¬ tem was to get the instruments to carry it out. These were found. Men, fearless and unscrupulous, were appointed to carry out a hateful law. The consequences are too fresh in people’s minds to need recitation. For nearly ten years a hateful system of espion¬ age was carried out in the United States. No trader could be sure that his counting house or his store did not contain a spy hired by the Government special agent to betray the trust of his employer. No reputation was too high, no fortune too colossal for .Jayne and his emissaries to attack. We need not stop to condemn Jayne. He was but the fitting tool employed under a law for which the party in power is alone responsi¬ ble, that affected the business of the whole country. Well may a whole country be trou¬ bled when its commerce, embracing some thirteen hundred millions annually, is handed over to the inspection of official s/ies. We are bound to admit tliat the evils of smuggling and undervaluations are more com¬ mon in the United States than in any other country on the globe. These evils are insep¬ arable from the high duties we exact. They are evils growing out of evils. When foreign silks were entirely prohibited in Eng¬ land the enlightened Mr. Huskisson pointed out in the House of Commons that three fourths of its members wore some article of foreign silks on their persons. It is in hu¬ man nature that the greater the gain the greater risk will people run in obtaining the reward. Macaulay well pointed out that the most stringent laws against clipping the 176 CONGRESS AND PHELPS, DODGE & CO. coin of England only increased the evil. So we have seen that no terror of the revenue law, no couliscation, stopped smuggling or under valuations in the United States. We also submit tliat i.i the eleven years during wliich this Jjateiul lu.w has been on the statute books hardly any cullu.sions with cus¬ toms otheiaiS have been punished. As Jayne couiplaiiied before the Goiigressional Uoiiiimt- tee, the thieves are left in office, and he (even Mr. J ay lie, observe,) was forced to quit it. The fact IS, detectives uid not search lor evidence of guilt ill the places wliere it could easily be louiiU. it was not the appraiser's olnces wliicli V ere put under surveillance. \\ hat appraiser, what subordinate officer during tlie last eleven years has been sent to the otate prison for collusion in defrauding the Treas¬ ury ? The.se men w'erc rewarued for their i own thefts, and shared in many cases the iuronner’s moiety. W^eighers suspected by Jayne were put on the watch and gave up their principals, the merchants. Ja^'ue be¬ came the iiiiormer, made the merchants pay, and not only let -the dishonest weigiiers escape but rewarded them besides. Again, the nil'anious spy system in the stores of mer- cliaiits tlireatened to become seated, because lawyers of repute and national legislators took the spies under their protection. When the thief who stole a liriu’s letters and papers, and iiiforiiied against it, was rew'aided with $65,01)0, he found imitators by the score, and the proudest and most straightforward mer¬ chants trembled before their own servants. Systematic under valuation and smuggling nourished under Mr. Jayne’s nose. Jayne himself admitted ilie fact. The many niil- lioiis squeezed from merchants did not come out of me pockets of those who had cheated tire Treasury out of hutidreds of thousands of dollars. INo. They came from mercantile houses which wmre in default, one, two, or three thousand dollais. Naylor & Co. have now a suit pending in which the under valua¬ tion is $lGu, and the suit calls lor a quarter of a million, we believe. The laws ot ’65 and ’67 were a trap for merchants. Under these laws the juries were invariably charged by the judges that the inttut to defraud was not for iliem to decide; all they had to say was wliotlier a vmlation of the law had taken place (as tech¬ nically it always had); that the intent must be lett to the decision of tire ttecretaijy of the Treasury, who vmuld perhaps graciously re¬ mit the hue. The result has shown that the prudent merchants slirnnk from Custom House lawsuits, and preferred to pay htin- dreds of thousands in tines. Rumor,s of these tyrannical abuses were rife in 1871-72, A benate Committee to investigate them was sent to New York, and sat in Washington. Alessrs. Buckingham, Eratt, Howe and btew- art declared that all the reports were e.vag- gerated; that trivial abuses were iuseparabie irom the stringeut execution of.the revenue laws. In fact, they plied the whitewash brush with great vigor. Tw'o democrats on that committee, Messrs. Bayard and Casscrly, in a minority report pointed out the abuses of tile law, the tyranny and robbery that were carried on under the flag of the United States. 'We printed last luesday a portion of Mr. Bayard’s examination of Jayne and the remarks of the c.juimittee. Testimony in 1872—which has been loiind but too true in 187T—told how ifie spy system tiouri.slied m tne laud. But, as the Presidential election was at hand, the Sciiultzcs and Bodges had time to consider or ponder over the minority report of Bayard ana Casserly. The ttiielps. Bodge & Co. outrage, soon loilowed by me case of Messrs. Woodrufli & Bobiuson, roused the hitherto secure luerciiauts, and a burst of in¬ dignation which w'as almost universal was the result. W'e need not follow the vicissitudes of the Moiety Bill, it is well known that Messrs. Beck, Wood and Nibiack were the fiercest denouncers of the national scandal, both in the Ways and Means Committee and in the House. The bill, however, had a multitude of friends in the House. In that assembly it was a question of Butler and tj'raiiny, or jus- tico to commerce, and so high did tne iudig- iiatioii run that even Butler had nothing to say ill favor of retaining the spy system. IN ot so in the Senate. Mr. Conkling has with CJiristian resignation swallowed some humiliating remarks made by Mr. Beck, not to his advantage, and he may hear even more hereafter. Mr. Conkling did his utmost to defeat me bill. He was sec¬ onded by Howe, Pratt, Chandler, Sargent, Stewart, Buckingham, Hamlin, and a few more of that class. Senator Sherman, w'ho had the bill in charge, was but a lukewarm friend to it. And the bill would have failed ill the Senate, as three measures of relief had done before, had not oue man used his indom¬ itable energy, perseverance and tact to carry the measure. To Senator Bayard chiefly the merchants are indebted for the success of the bill. DEBATE IN THE SENATE. REMARKS OP SENATOR SCOTT. In the course of the debate, on propositions to restore to the officials of the Government the power to seize and examine a merchant’s books and papers and otherwise amend, Mr. Scott, Senator from Pennsylvania, said : Mr. President, as the chairman of the Committee has already stated, this section received as much, if not more consideration in Committee than any other section of the bill ; and I desire to say a few words both upon the section itself and upon the general subject which has given rise to it. I think, as the Senator from Iowa has said, we are perhaps in danger of going to extremes upon both sides of this question in consequence of recent events. Public feeling has been very much excited over the allega¬ tion that books and papers have been arbitrarily seized with bad motives in many cases, and, on the other hand, complaint is made that dishonest persons have violated the revenue laws, against whom no penalties can be enforced unless there can be just such an arbitrary seizure as is complained of. I think there have been many violations of the revenue laws which have never been detected or punished ; but I do not agree that it is neces¬ sary, in order to reach them, that arbitrary seizures should be resorted to. The principal case out of which this feeling has arisen has been gener¬ ally denounced as an arbitrary seizure of books and papers. I refer to the case in which the books of Phelps, Dodge & Co. were inspected in New York; and for the purpose of ascertaining the true position both of the man who has been denounced for that seizure and of the firm which is alleged to have been wronged by it, 1 have looked into the testimony re¬ lating to the production of those books ; and I deem it my dut}^ here to do justice to both parties involved in that transaction, and in the light of its facts make the effort to determine what legislation is required by true public policy. No man in this country enjoys a higher reputation than William E. Dodge, and I hold that it is hardly worth while for a man to make a good reputation through a long life, unless he is to get the benefit of it both in 12 178 CONGRESS AND PHELPS. DODGE & CO. liis private affairs and when arraigned as a wrong-doer before the public. It would take a very strong statement from any quarter, sustained by the most undoubted evidence, before I would be willing to impute for a mo¬ ment any actual or intended violation or evasion of the laws of his country by a man wdio has sustained, and who, as I believe, has deserved the repu¬ tation which Mr. Dodge enjoys. But, Mr. President, upon looking at the transaction by which it is alleged a great wrong upon him was perpetrated, I find that his books wore not seized, in the ordinary sense of that word, at all ; but the special agent, Jayne, whose acts have been the cause of so much public comment, looking back for five years over the invoices furnished to him by a dis¬ honest clerk in the house of Wdliam E. Dodge & Co., found a large number of under valuations upon these invoices, as was alleged—under valuations Avhicli no man who examines the wdiole case will suppose were made for the purpose of defrauding the revenue. The same books from which those under valuations were taken -would have shown invoices upon which over valuations were made to an amount as large as the under valuations, and the firm of Phelps, Dodge & Co. there is no doubt paid to the Government as much revenue upon the over valuations in their invoices as the Govern¬ ment was deprived of by those \vhich had under valuations in them. But this clerk, let his motive be what it might, furnished to Jayne, the special agent, the invoices which showed the under valuations, withholding those which showed the over valuations, and upon the face of them Jayne found that the firm of Phelps, Dodge & Co. would be liable, upon a strict con¬ struction of the revenue laws, to penalties which would amount to about )pl,750,000, being a forfeiture of the whole valuation of all the invoices in which the under valuations of a few articles had occurred. Finding this to be the case a suit was instituted, and notice sent to Mr. Dodge of what this agent had found. It came upon him, as he says, like a thunderbolt; and no man can wonder that it did. No man holding the position which he did in societ}^ could be otherwise than alarmed and astounded at being charged with a fraud upon his Government of this extent. He went into the presence of this special agent, in a place which he describes as a dark hole in the Custoni House, lighted up by gas, and there, with the district attorney present, he was informed of what was charged against liis firm—that they had imported goods with invoices in which under valuations occurred that would make them subject to these penalties. Mr. Dodge is an honorable man. lie averred that he was guiltless of any intention to defraud the Government; but upon this state¬ ment being made to him that their books and papers would show this under valuation, and a charge being made, according to his statement, in AN EXTRAOEDINAEY IIISTOEY. 179 language and spirit certainly discreditable to this man Jayne, and under circumstances calculated to inspire terror, he, as an honorable merchant, instead of awaiting the process of liaving his books ordered into court, proffered to waive all tlie formalities the law required and place his books at the disposition of Mr. Jayne and of the district attorney. They were then carted away from his store without any judicial order, but upon his own agreement that they should be taken. Unwilling to go into court where, upon the technical letter of the law, without any dishonest intention, his firm might be subjected to a penalty of over $1,000,000, smarting under the allegation of fraud which was made public and sent abroad to Europe, under which his firm there was suffering, under which one of the members was sulfering in reputation and mentally — such suffering as can be appreciated only b}" a high toned, honorable man, who has had his character blasted before the public—with all the considerations pressing upon him, rather than go into court and incur the risk of paying a penalty of $1,700,000 for a tech¬ nical violation of law where no fraud was intended, he paid a penally equal to the actual valuation of the goods upon which the under valuation took place. The actual valuation of the goods, remember; not simply the duties upon them. The duties, if I recollect aright, and I will not be responsible for exact figures, upon the whole under valuation would only have amounted to $1,600. The items of actual under valuation amounted, in a business of five years, covering between three* and four hundred mil¬ lions of dollars, to only about $6,000, upon goods which, in the aggregate, amounted to $271,000, and the case was compromised by paying that amount Mr. President, it was a gross wrong; but the wrong was in the law. We are seeking to remedy it. Mr. President, I am not here to apologize for this man Jayne; I am not here to become the advocate of an}''party in this transaction; but lam here to do justice to both these parties, and to see what provision we ought to insert in the public law for the purpose at the same time of protecting the honest merchant, of punishing the dishonest, of collecting the reve¬ nues, and imposing and enforcing the penalties and forfeitures that are incurred by actual intentional fraud. REMARKS OF SENATOR BOUT WELL. Mr. President, upon the general question of abolishing moieties, I ex¬ pressed an official opinion more than four years ago, in my Annual Report as Secretary of the Treasury to Congress in the year 1869. I thought then 180 CONGRESS AND PHELPS, DODGE & CO, that I foresaw some of the evils that have since been complained of. On the 25th of May, 1870, I submitted to Congress a bill for the abolition of the moiety system, coupled with a bill to establish the salaries of the Cus¬ tom House officers; and again in 1870 I urged the abolition of the moiety system; and I think that experience bas shown that either of those years would liave been a more fortunate time for the consideration of the subject than the present. While I have seen many things and experienced a good deal whicli would lead me to change my opinion, nevertheless, I adhere to it that the moiety system is a bad system and ought to be abolished. Nor is that opinion elerived altogether or even cliiefly from what are alleged to be the evils under which the commercial community suffers; but rather on account of the evils that it brings upon the administration of the law, and the difficulties and dangers to which those who are called to administer the law are exposed. I have been reluctant even to say one word before the public touching any matter concerning which I have been officially concerned, and I do not know that I shovdd have risen to say a word this morning, except for the remarks made by the Senator from Pennsylvania. I have no judg¬ ment to express as to the character and conduct of the firm whose name he has mentioned in the presence of the Senate; but I wish to lay before the Senate certain facts, which 1 think relieve not partially but altogether, which justify not only with cjualification and apology, but without qualifi¬ cation or apology, what was done in reference to the claim that was made upon that firm. Personally, 1 have nothing of which 1 can complain. I believe that the senior member of that firm, in whatever he has said, either in private or in public, has been altogether favorable to the part I had in the transaction to which public attention has been directed. Hut I think that the vindication ol the course of administration is of more consequence than the vindication of any private person. Now, what were the facts ? Un the 27th day of December, 1872, or per¬ haps a few days prior to that date, a person who had been in the employ of this house, having first been to an attorney in the city of New York not in any way connected with the Government or representing it, came to the special agent and laid before him w'hat he called evidence of the under valuation of goods imported by this house. He not only made statements, but lie presented documents which went to show the truth of his state¬ ments, and when these documents were compared with the books of this house, when they had been surrendered for the purpose of examination, the evidence was conclusive that those papers had not been tampered with in any way; that they were originals; that they were genuine; that they had been taken Irom the books of this firm by this man; and whatever may AN EXTRAOKDINARY HISTORY. 181 have been liis motive, or whatever the character you may attribute to liini, it has never been proved—I think not even suggested, but if suggested never sustained by any proof—tliat the agent of the Treasury Department had any knowledge of the relations of this unfaithful clerk to his hous(‘ until he appeared before him with these papers, after having consulted with counsel, whom he had privately employed, and who was in no way connected with the Government. What was this special agent to do ? I have before me a statement whicli contains a minute of thirty-six shipments of goods—tin plates—commencing early in January, 1871, ending in March, 1872; thirty-six shipments upon different vessels, or perhaps, in some instances, shipments upon the same vessels on different voyages. Each one of tliose shipments shows a difference between the Custom House invoice, on which duties were paid, and the private invoice, in the same handwriting with the regular in¬ voice presented by this unfaithful clerk to the special agent, and when compared with the stubs from which they were torn, matched exactly with the books then in possession of the firm; and when these books were given up on the 27th day of December, L872, by consent, what was the special agent to do? Attribute to him any character you please; he had his statement before him of thirty-six shipments of tin, with a public invoice, found at the Custom House with a private invoice in the same handwriting, obtained confessedly from the books of this establishment. What was he to do ? Can anybody say that he was to do anything except to proceed in the regular way? If he had done otherwise he would have been con¬ demned by the whole country. The matter was laid before the district attorney, and the district attorney, acting upon his authority, not as an offi¬ cer of the Treasury Department, but as an officer of the Department of Justice, instituted regular proceedings for the recovery of what was alleged to be due under the law upon a computation, not at the will of any officer, but taking the facts as they appeared, they proceeded to compute and establish and ascertain the legal liability of the defendants. Mr. Camero.v. —Will the Senator from Massachusetts allow me to ask him a question ? I desire to know if that agent of the Treasury Department is the same officer who has recently resigned his place. Mr. Boutwell. —Certainly; Mr. Jayne—the same person. I do not speak of Mr. Jayne one way or the other, either in defence or condemnation. 1 only state the facts. Legal proceedings were instituted for $271,000. About this time—I cannot say what the precise date was—Mr. Dodge called upon me in Washington at my boarding house, out of office hours, and stated in general the difficulty in which he was involved, alleging his innocence, of which Iliad no doubt, excited ray unreserved sympithy upon 182 CONGRESS AND PHELPS, DODGE & CO. pel the rcpvescntation he made of the difficulty in which Ids house was involved, and desired to pay the $271,000 at once and have the whole matter disposed of tlien and there. I said to him: “ This is an impossible thing; an impro- ery unwise thing for you to think of.” Upon his assertion of his nocence^ I gave him what I thought was legal advice, and good advice, so far as I could give advice as a public officer. I said to him: “ If your statements be true, as I have no doubt, you are in no danger either as to money or reputation. Go into court where the testimony can be taken under oath and according to the forms of law. The Secretary of the Treas¬ ury has no power; he cannot take testimony; he cannot form a legal judg¬ ment, This case can only be disposed of properly in the judicial tribunals of the country, and if it .shall turn out, as I have no doubt it will, that these are technical departures from the law, and do not involve any criminal intent, the court will so certify; and the Secretary of the Treasury, under the statute, then lias power to remit the penalty in whole or in part, and such things arc frequently done.” Mr. Dodge has said since that I gave him srond advice. I gave him such advice as I thought a man in his situ- atioirshould take. He came a .second time and I repeated the advice to him, but declined to have anything to do with the adjustment of the matter, as it was in the courts and must bo there disposed of. Mr. Scott.— Will the Senator from Massachusetts permit me? I would be glad at this point if he would permit me to read Mr. Dodge’s statement on this subject and giving his reason wdiy the advice given him ivas not followed. .Mr. Boutwell.— I have no objection to that although I suppose I know the I'eason. Mr. Scott.— I have no doubt the Senator from Massachusetts will be glad to have this read. IMr. Dodge states : And now, before I forget it, I w.ant to do justice to a Government ofScer wlio, I think, is entitled to have justice done him in this case. I have regretted very much that from time to time, over since the settlement, there have appeared in the papers certain hints which would seem to indicate that the Secretary of the Treasuty, Mr. Boutwell, did not treat ns fairly in the matter. If wo had followed Mr. Boutwell’s advice, we probably never should have paid tliis 1271,000. I came on to see Mr. Bontwell. He was Sick at his house, and was kind enough to receive me iti his room. I stated the whole case to him as well as I could ill a very short time, aud I told Mr. Boutwell that we had looked this matter over with great care; that if it was a matter between ourselves aud the Government, or if it was simply a matter between the courts of tlie United States and ourselves, and if it were not for the ari-ay of power aud influence which was behind to make tlie better appear the worse, we would not hesitate to go into court; but for us to go into court and have a judgment itgainst us for ,$1,750,000 and have it telegraplied all over tlie world that the Government of the Uuited States had sued Phelps, Dodge & Co. for fraud, and had obtained a judgment for that amount, whatever might be the result afterward, the injury to us as merchants would AN EXTRAORDINAllY HISTORY. 18 : have bcea irreparable. Because, however swift the fact ma}' go by telegraph, the result of an after investigation would be very slow to follow. Mr. Bontwcll said to me, “ Mr. Dodge, I think you had better go before the court, and I will as.suro you that if it comes back to me, as it will come, whatever may he the decision of the court, I will give the matter personal and careful consideration.” I thanked him for it He knew then probably what T did not know, but which if I had known I never would have paid the money. I had no knowledge that there was only $1,600 involved in the whole case, running over five years, and covering importations to the amount of $50,000,000. Mr. Boutwell. — F did not know anytliing about liow niucli was involved. I had received no official report of tlie case at tliat time. I liad only heard a rumor that there wa.s such a case. Following these interviews there was a corro.spondence' between Mr, Dodge’s counsel, Mr. Wakeman, of New York, who was an eminent revenue lawyer, who had been I think four or live years Surveyor of the Port, and who had frequently appeared before the Department in revenue cases, and the Treasury Department in relation to the adjustment of this case. The first proposition made was dated on the 2d of January, 187.S, and the two subsequent propositions bore date of'2d January, 1873, but they were not made until some time afterward. They seem to have been dated back to correspond with the first proposition. Tliis first proposition was a propo¬ sition to pay $271,000, and was coupled witli a protestation of innocence, and we said in reply tliat it was impossible for tlie Department to take money for an alleged violation of the revenue laws when those who were cliarged with having violated them, and who proposed to pay money upon .such charges, themselves protested their innocence, that the Govern¬ ment could not take money from hands that were innocent of any intention to defraud the Government, and, therefore, that proposition wa.s declined. A second proposition came in whicli the protestation of innocence was omitted, no admission of guilt inserted—but the protestation of innocence was omitted ; and while tliat proposition was under consideration it was withdrawn before the Department had acted upon it or come to any con¬ clusion as to what should be done. After its wiilidrawal a letter was addressed by Mr. Dodge himself to the Secretary of the Treasury saying that he had been informed that the Secretary had already reached the con¬ clusion to accept the proposition, and inasmuch as they had made the proposition and the Department had concluded to accept it, he, upon the whole, had concluded to stand by it. I wrote him a letter, which 1 dictated personally, saying to him that the Department liad come to no such con¬ clusion, that indeed the facts necessary to an opinion were not before the Department, and that his withdrawal of his proposition was entirely con- 184 CONGRESS AND PHELPS, DODGE & CO. sistent with any situation of the question as far as the Department was concerned. But following that at an interval came a third proposition renewing the offer of $271,000, supported as all the others were by the recommendation of the district attornej' of the Southern District of New York in favor of accepting the proposition. This proposition either contained the sugges¬ tion or condition, or was accompanied or was soon followed by a letter containing the condition that the receipt should be a bar to all claims of the Government against this firm. That of course was inadmissible. We said that the Department could only accept this money as a bar in any civil suit to those cases which had been examined and reported upon; and that proposition was finally accepted in the amended form, as I understand, although I have no official information on that point. The suit was for $271,000 and something over, and they consented to pay exactly what the Government asked. This was not a sudden thing. The proceedings were instituted on the 27th of December, 1872—or earlier than the 27rh of December, for the books were delivered on the 27th of December. The final proceedings took place the very last of the month of February, 1873. Something like two months or more elapsed while the subject was under consideration. There was no pressure from the Treasury Department upon this house. We delayed, we resisted, we refused propositions, we post¬ poned ; they had time for consideration, they had eminent counsel, they acted upon their own judgment- Mr. Hoave.— AYho represented them ? Mr. Boutwell.— Mr. Wakeman for one. I understood other counsel were cmplo)^cd. Mr. Wakeman was an eminent revenue officer, and, by his let¬ ters and appearance at the Department, by his intervieAvs Avith the officers of the Department, he manifested an interest in the affair equal to any Avhich an attorney is expected to exhibit. I have nothing to say about Phelps, Dodge & Co. Avith reference to this matter. I can understand and I believe Mr. Dodge himself is entirely free from any personal responsibility in this matter. I cannot doubt it. But there is a mystery connected with these transactions. Through a period of more than a year there were under valuations, invoices given at the Custom House on Avhich duties w^ere paid Avhich did not correspond Avith piiAate invoices in the books of this firm. Therefore, while I do not judge them, I cannot offer anything in their defence: but I do say that the Treas- uiy Department exhibited moderation and consistency. It extended to them not only the leniency which a merciful administration of the laAV would alloAV, but the Treasury Department did, from the beginning to the end of the transaction, delay and postpone the payment of this money, for I AN EXTRAORDINARY HISTORY. 185 can assure the Senate and the country that for myself I was unwilling that a house having the reputation which this liouse had should pay into the Treasury of the United States $211,000. But what was to be done? Alter tliey had had two months for consideration, after we had made sug¬ gestions of ways in which this subject could be judicially investigated, when we three times offered to do what the officers of the law said the law required should be done, what was an executive officer with the law to do? Was he to say, “ This money shall not be paid; you do not know your own business; you do not know your own condition ?” After two months’ delay, after they had the benefit of eminent counsel, after they had had suggestions as to a different method of proceeding, and after they had not only been invited but compelled to go into the courts bv the officers of the law and a way pointed out to them by the Secretary of the Treasury how they would escape from every penalty if the Judge, upon the hearing, should say there was no criminal intent but only a technical violation of the law, what was the Treasury Department to do ? Mr. President, in this statement I have done more than I designed to do. I should probably have said nothing except for the remarks made by the Senator from Pennsylvania; but I believe that if the law was ever lionestly administered, was ever mercifully administered, ever administered with reference to the rights of the defendants, if ever defendants were cautioned and put upon their guard, this was the case and these defendants were the parties. REMARKS OF SENATOR EDMUNDS. If the Senator will allow me, in the direction of which he has just been speaking about the adequacy of the punishment for under valuations, etc., and in connection with the case of Phelps, Dodge & Co., which is the cap¬ ital on which the enterprise of this bill proceeds in the business of legisla¬ tion, I should like to have the Secretary read from the official copies from the books of Phelps, Dodge & Go., voluntarily surrendered, as it is here stated, for examination on the 27th of December, 1872, the record which no doubt illustrates the strength of this bill in protecting the innocent virtue of these people against the cruel tyranny of the officials of the United States better than any amount of rhetoric, even from the mouths of the distin¬ guished orators who support this bill, can do. The headings are—and then I will ask the Secretary to read the rest- Mr. Sherman. —I think to have a long document read and interposed in a debate like this is rather outside of the question. I want to reaffirm what I said, and to prove that in the very cases cited, taking each offence, the twelfth section of this bill provides a superior penalty. That is the question between us. It is a question now of the correctness of figures. 186 CONGRESS AND PHELPS, DODGE & CO. Mr. Edmunds. —The Senator undoubtedly will have time for that, and in order to aid him (because I must do good to him even against his will, if I have the right to do tliat) in coming to this question of accuracy, I will give him the exact entries in the books of these innocent people, whom our agents have so cruelly wronged, and which has brought forty millions of people to blush with shame, I believe somebody said, in order that he may see precisely how the thing occurred. If it is not precisely in point, as it appears to me, it will at least be—and the Senator will agree with me so far—useful in another way. The learned Mr. Saunders, who always hated the civil law, as the Senator well knows, and who was a great common law lawyer, in arguing a great case one day before the court of king’s bench, found it greatly to his advantage to cite an authority from the civil law; but inasmuch as he was a known opponent of the civil law, and insisted that it ought never to be introduced in principle or practice into the juris¬ prudence of Great Britain, he found it difficult to preserve his consistency in referring to the authority; but ho got round it, as the Senator from Ohio would on a similar occasion, alter he had produced his Justinian, or his institute, or his digest, or whatever it was. by saying, “ If it please your honors, I bring this to 3 mur honors’ notice, not as an authority in our law, but as an ornament to discourse.” [Laughter.1 Now, if this inventory is not precisely in ])oint to the view of my lionorable friend from Ohio, cer¬ tainly it will be a flourishing ornament to the discourse that he is about to make about the virtue of Phelps, Dodge & Co. Mr. Sherman. —That is very well put. Mr. Edmunds.— I have put it just as the invoice does; it has two faces. [Laughter.] This invoice, T say, is the real genuine thing, as it appears from the Treas¬ ury Department—a statement of the contents of the books of Phelps, Dodge & Co., surrendered by them voluntarily in the exuberance of their estab¬ lished virtue for examination, between the 25th of December, 1872, and the 1st of January, 1878, that holy Christmas time when all the world is glad that honor, virtue and prosperity are spreading themselves all over the world. It is headed first “ date.” It is put in a tabulated form, which, to be sure, interferes with the rhythmical unity which thetr ansaction itself so really deserves to be put in; but it is put in tabulated form and I must take it, as I am not a minnesinger, as it is. The Senator from Ohio, no doubt, can put it into measure, which will make it much more agreeable reading than it is now. Here it is. First is the column of the date of the entries in their books. Second is the name of the vessel in which the importation was made. Ihirdisthe mark which each package had" put upon it for identification. Fourth is the description of the contents of each package of AN EXTRAORDINARY HISTORY. 187 goods. Fifth is the Custom Flonse invoice, a Hand and delicious name, implying of course that everything is public and fair, that the open door of the public buildings of the Government where the appointed officer.s sit at the customs arc to be emblazoned by this statement put up by Phelps, Dodge & Co. as the real cost of their property which they had bi'ought into the country. Then next comes what the Senator from Ohio may think is a peculiarity, the private invoice. Next comes the difference in value between the two, and then the total amount of the invoice. I will not, of course, take up the time of the Senate in reading it clear through, but I will take one or two specimens just to illustrate how it runs. On the 28th of January, 1811, by the City of London, came a pack¬ age marked S in diamond, and carrying an Asiatic name, I suppose. I believe the island of Banca furnishes some tin; if I am wrong about that my honorable friends of the Finance Committee can correct me; I do not profess to be wise in tin, either in the metaphorical sense of dollars, or in the commercial sense of the article these gentlemen dealt in; but the woi’d is Pontymister, and I suppose it to be a manufactory in the island of Banca. A^cry likely I am wrong, but if so, I can be corrected. Then come the goods, “111 boxes tin plates 2 b B. T.” How thick that is the Sena¬ tor from Ohio can infoiun us. Then comes the Custom House invoice, and the entry in pounds, shillings and pence is £531 15.s-. M. Then comes the “private invoice, £548 13s. OcZ.; difference in value, £11 2.s‘.” Here, then, you have a firm of people whose wrongs are to be redre.ssed by this bill, who have been made the innocent victims of a cruel and ille¬ gal tyranny, who hold out to the United States and swear to it one paper, which afBrms that the cost of that article of tin was £531 11s., while they receive and post in the same book of invoices, so that the two are brought side by side, another invoice, which is the true one, stating that the cost of that article was £548 13s. In one hundred and seventy-one boxes of tin the cause of virtue, and good morals, and public revenue, and the progress of society require the virtuous citizen to declare, for the purpose of taxation, that the cost is one sum, and for the purpose of his private gain, to liave the truth, that the cost is a greater sum by £11, and to swear to the false invoice as the true one. That is what the honorable Senator from Ohio evidently considers to be a virtuous example for a good citizen, who intends to promote the welfare of trade and honesty toward his brother importers and good morals in society everywhere, to set. Mr. President, I did not rise to comment upon this sort of thing. I am only stating the case, word for word and letter for letter, according to the examination of these books, the authenticity of which was not questioned, surrendered by this firm itself, where the members of the firm swear to the 188 CONGRESS AND PHELPS, DODGE & CO. Custom House officer that the cost was one sum, when by their own invoice and in their own books, side by side with it, is the true invoice, which confessedly was the true sum, a great deal larger. Mr. Sherman.— I am not the defender of Phelps, Dodge & Co. They are not my constituents, nor have I anything to do with them. A question arose between the Senator from New York and myself, and I say now the penalty recommended by Mr. Stewart is exceeded in amount in tliis partic¬ ular case, taking this particular case that is used by the Senator from New York as an illustration ; that in each case the penalty provided in this bill exceeds that proposed by Mr. Stewart. That is the point I want to get at. Take each of these offences of which Phelps, Dodge & Co. are said to be guilty; 1 know nothing about them; and I say the penalty under this bill exceeds that suggested by Mr. Stewart. Mr. Edmunds. —The Senator says he is not the defender of Phelps, Dodge & Co. I beg to know if I am mistaken in the supposition that I have enter¬ tained that this bill was being pushed here on account of the wrongs that had been committed by the Government of the United States or its agents against this very firm, in respect of these transactions among others ? Will anybody say that it has not been ? I should not have dragged the name of any private citizen into this discussion, however guilty he might be. The tribunals of his country, if he had found it convenient to submit himself to them, would have been able to ascertain whether he was guilty or not, and I should have been the last man, 1 hope, or among the last, who would ever have referred to the guilt or innocence of anybody who might be sus¬ pected or charged with crime in a place where he could not have the oppor¬ tunity to answer or be tried. But these parties not being in court, having got out of court in a way that we alt understand, right or wrong, when it is said they are virtuous, and that the law as it stands has been made an instru¬ ment of tyranny and oppression in defrauding innocent citizens of their just, and constitutional, and business rights, then I am forced to see what the truth really is. It does not do, therefore, for the Senator to say that the matter of Phelps, Dodge & Co. has nothing to do with this business, and he is not their defender. He is promoting this bill upon the ground that the law as it stands has been made the instrument of tyi’anny against these men—that it has been the engine of oppression—not because the law as it stands was right, and had been violated by the acts of Jayne, and the Secretary of the Ireasury, and the District Attoi'ney. Nobody contends that they went one step beyond the law; but he says that the law has undertaken to interfere with the business of innocent a,nd virtuous citizens, who have not been guilty of any violation of it, unless it may be a technical one, which is AN EXTRAORDINARY HISTORY. 189 pressed to their disadvantage. Therefore, I say I am forced to point to tlie moral of what was so well said by tiie Senator from New York, and to ask your attention to the undisputed fact, sad as it is, that in the books of this company, side by side, systematically placed there, are found invoices of this great article of trade, the difference of a shade in the price of which enables a great house to command the trade of the country and destroy that of their competitors; not one instance, not ten, not twenty, but a hun¬ dred, where there is this continuous falsehood from day to day deliberately entered, the truth upon one side and the falsehood upon the other; the false invoice every time presented and sworn to at the Department, and the true one every time placed by the copy of the false one in the books of this firm, in order that their private transactions might be guided by it. If this is the virtue that the Senator defends it is not mine. If that is the public prosperity which he wishes to promote, it is not a pro.sperity in which I wish to share. I know it is not that in which the Senator wishes to share; but he has been carried away, as we are all sometimes carried away on the wind of a clamor, and in order to overcome clamor he destroys the fundamental foundations upon which Alexander Hamilton and the fathers of the Republic placed the law in order to protect innocence and to punish vice. COMMENTS OF THE PRESS ON THE SPEECH OF SENATOR EDMUNDS. As pertinent to the subject, attention is here asked to the following review of the above remarks of Senator Edmunds, which appeared in the columns of the New York Evening Post, June 15, 1874: ‘■The Times tins morning prints nearly a column of the speech which Mr. Edmunds, of Vermont, made in the Senate on the 10th in¬ stant, during the debate on the Moiety Bill. The essential part of his remarks, however, is not given by the Times. Senator Edmunds took the ground that Messrs. Phelps, Dodge & Co. had defrauded the Government in the amount of tax paid by them on importations of tin. He was provided with a list of what he called the ‘invoices,’ under which the requirements of the Custom House had been violated, and from this list he selected the following as a specimen of the nature and amount of Messrs, Phelps, Dodge & Co.’s alleged fraud¬ ulent transactions; ‘I will not, of course, take up the time of the Senate in reading it clear through, but I will take one or two specimens just to illus¬ trate how it runs. On the 28th of January, 1871, by the City of Loudon, came a package marked S in diamond, and carrying an Asiatic name, I suppose. I believe the island of Banca furnishes some tin; if I am wrong about that my honorable friends of the Finance Committee can correct me; I do not profess to be wise in tin, either in the meta¬ phorical sense of dollars or in the commercial sense of the article these gentlemen dealt in ; but the word is Poritymister, and I suppose it to be a manufactory in the island of Banca. Very likely I am wrong, but if so I can be corrected. Then come the goods, ‘ 171 boxes tin plates 2 b B. T.’ How thick that is the Senator from Ohio can inform us. Then comes the Custom House invoice, and the entry in pounds, shillings and pence is £531 190 CONGRESS AND PHELPS, DODGE & CO. Us. Od. Then comes the ‘private invoice, £548 ]3s. Od.; difference in value, £17 2s.’" Senator Edmunds assures us that ho knows nothing about tin, but he undoubtedly fell conlideiit—a feeling for which he had abund¬ ant reason—that no such assurance was ne¬ cessary in respect to Ins accpiaintance with geography. To transfer roiitymister’’ from Wales to the Island of Banca is a feat which might well cause an elevation of the eyebrows on the part oven of a board of Civil Service examiners. The inexactness which appears to be the leading characteristics of Senator Edinuuds’s geographical knowledge is equally apparent when he speaks of the documents in which he tinds such conclusive evidence against the business integrity of the honso of Phelps, D idge & Company. lie describes these doc¬ uments as “ invoices,” whereas they never have been, and never can be properly re¬ garded as “ invoices.’’ They arc simply mem- orauda of fag ends of contracts which were made months, and some of them a fu 1 year before the documents weie written. But we imagine that Senator Edmunds endeavored to deliver himself Irom all such criticisms by the general confession of ignorance which he art¬ fully put into the body of the speech, as fol¬ lows: “Very likely I am wrong; but, if so, I can be corrected’’ True; but when a Sen¬ ator of the United States undertakes to ex¬ amine a specilic case of fraud, affecting the bu-iiness credit and personal reputation of the firm accused of having committed it, it does not seem to be unreasonable to require him to speak with a moderate degree of accu¬ racy. But we will adjust our language to Senator Edmnnds’s knowledge, and consider his facts. He says that here is one “ invoice ’’ in which the amount is given at £531 11s. and another in which the amount is given at £548 13s., the difference between the two amounts being £17 2s, The first ft sent to the Oustom House and the other is not seen outside of the And on the 6th of July following, tor Edmunds having been again broi Butler, the Eoening Post again resu: ject as follows : “ In a former article, in discussing this case of Phelps, Dodge & Co., we cited an illustra¬ tion of the iniquity of the moiety system. Four shipments of that firm, wherein, upon a discovered loss to the revenue of $01.44, they were mulcted to the amount of $5,5:50.33, and were liable to a seizure of $107,749.42, for firm’s counting room. That is to say, in an invoice ’’ of £548 13s. or $2,743, the differ¬ ence between the contract price and the ac¬ tual market value amounted exactly to £17 2s.. or $85.50. This sum of $85.60 repre¬ sents the amount of the under valuation, on which a duty of twenty-five per centum ought to have been paid. Twenty-five jjer centum of $85.50 amounts to S21.37|, and that is the enormous sum which Messrs. Phelps, Dodge k Company made out of this transac¬ tion. On an “ invoice ’’ of goods valued at $2,743 a mercantile house of fifty years’ standing, which transacts business annually to the amount of twelve millions of dollars, saves what is almost exactly three quarters of one per centum. One requires the brain and the conscience of a Jayne to see in this transaction, viewed merely as a matter of business, any fraud. There was an error, wo admit, but there was no intention of cheating the Government. The facts, as cited by Senator Edmunds, show that there was no motive for fraud. Whether considered as money kept out of the United States Treasury or as an advantage to be gained by Pheips, Dodge & Co. over their fel¬ low merchants, the sum of $21 371 is too small to affbrd the shadow of a suspicion of an intentional violation of the law. These minute errors, covering ;i period of five years, altogether amounted to less than two thousand dollars. During the period the firm trans¬ acted business to the amount of, sa}^ fift}’’ millions of dollars. As two thousand dollars, therefore, is to fiftj* millions of dollars, so is the chance that Phelps, Dodge & Company in¬ tended to cheat the Government. But as two liundred and seventy-one thou¬ sand dollars is to nothing, so is the desire of certain Senators foi- the “sinews of war’’ hitherto provided by the Custom House for carrying the elections. Senator Edraunds’s remarks, as published in the Times, simply show how valuable two hundred and seventy- one thousand dollars are for such purposes.’’ the statements and exhibit of Sena- ght forward in the House by Gen. nod the discussion of the same sub- wdiich Avhole amount Senator Conkling ad¬ vised that suit should be brought against them. As additional food for reflection, in refer¬ ence to a system, the reestablishment of which will be attempted whenever the mer¬ chants relax their vigilance, we append a table AN EXTRAORDINARY HISTORY. 191 of eiglit additional shipments ol the same firm, as exhibited in the Senate during tlie debate of June 10, in which Senator Edmunds made liis chief argument: Table of eight shipments by Phelps, Dodge & Com¬ pany showing the amount of loss to the Govern¬ ment in revenue, amount of the invoices eonfls- cated, and the grand total amount liable to i 1 s to the r dollars. .c2.S i $ mount ol conflscati .mount c valuation li otal am 01 voice li conflscat dollars. R n <; [ ^ 1871. Nem’sis 85 SI,424 50 $47 31 $11 82 $17,316 68 1 C Vasil. 169 1,926 68 102 06 t 25 51H ) Do. 101 53 56 ; 13 39 V 20,498 75 Do. 382 50 13 25 3 31 June 14. C.Bklyn 3,889 75 174 25 43 56'4 14,625 06 June 19. Calabria 108 850 00 27 00 6 75 j- 20,171 12 Do. 62 539 50 15 50 3 87>^ 28tb. China.. 217 1,644 68 50 81 12 70 ‘4 11,400 12 30th. Parthia. July 10. 35 1,029 27 31 77 7 9154 22,318 81 Algeria 32 1,111 62 36 50 9 12K 26,020 36 Aug. 14. Algeria. 7 107 18 2 18 54>4 1 2 28 12 1 12 28 1 Do. 145 36 25 9 0(3.14 y 16,185 28 1 Do. 56 557 08 2 58 6414 ■ Do. 172 1,527 12 54 88 13 72 J Total.. $17,234 81 $162 23 $167,536 18 By this table it will be manifest that, upon a total shipment of $167,536.18, there was a loss of revenue to the Government of $162.23, a confiscation therefor of $17,234.81, and a liability to confiscation of nearly ton times that sum. This loss of $162.23 is about the amount of a month’s wages which the firm would have paid to a head porter or to an nn- der clerk. The mistalco of $162.23 gave them an advantage of less than ten cents on every one hundred dollars of the whole amount of the shipment. Yet it was gravely argued by oenator Edmunds, and passionately declaimed hy Mr. Butler, that this was conclusive of fraudulent intent on the part of the firm; that is to say, that, for a gain of less than ten cents on a hundred dollars (which was much more than offset hy similar mistakes made against themselves and in favor of tlie Gov¬ ernment), a firm of the standing of Phelps, Dodge & Company would wilfully e.xpose themselves to public disgrace and to the for¬ feiture of $167,536.18. We do not expect Mr. Butler to reconsider his accusations, for he made them as the agent of Jayne, and from personal spite; nor do we ask Senator Conkling to do so, for he was of opinion that it was not enough to mulct tlie firm ill the sum of $17,234,81 for tlio mistake of $162.23, and that the whole amount of $167,536.18 should have been sued for. But we do appeal to Senator Edmunds, good law¬ yer and legislator as he generally is, to consider whether he has not something to retract, in duty to his own intelligence and conscience. Is it possible, for instance, that Senator Ed¬ munds does still conscientiously believe that on the 30th of Maj', 1871, tlie firm of Phelps, Dodge & Company did wilfully intend to cheat the Government out of |1 l.S2| on their ship¬ ment of $17,316.68 by the Nemesis? Does Senator Edmunds, after a month’s interval for reflection, feel no qualm of regret when lie remembers that he, himself, exhibited these figures in the Senate, and argued that they showed deliberate fraud upon the part of the firm ? Does Senator Edmunds not feel ashamed of the laws of his country, and of his own attempt to resist tlieir appeal, when he remembers tliat, for this mistake of $11.82^ in an invoice, the sum of ,$1,424.50 wns ex¬ torted from the firm, and half of it was divided up in .spoils to a man like Jayne, and in per¬ quisites to the Collector, Naval Officer, and Sur¬ veyor of the Port of New York, and that a fellow Senator recommended that steps should be taken toswellthe $1,424.50 to $17,316.68 ? Has Senator Edmunds nothing to take back when he remembers that Jayne, after search¬ ing with the scent of a terrier and the hunger of a panther through the papers representing importations of $50,000,000, could find errors (like this of tlie shi|)ment by the Nemesis) to the amount in all of only $1,600 in favor of the firm and against the Government, which were counterbalanced, as stated by them, by errors fifty times larger, made by the firm in favor of the Government and against them¬ selves ?” FURTHER PROCEEDINGS IN THE HOUSE. From the very commencement of this investigation in respect to moieties and seizures before tlie Committee of Ways and Mean.it was generally anticipated, as well as currently reported, that Gen. Jiutler, who it was admitted had acted as counsel for Jayne in his arraignment of Phelps, Dodge & Co., and as such had directly or indirectly shared in Jayne’s p'under of the lirm, would take an active part in the proceedings. In this anticipation, however, the public were temporarily disappointed. Gen. Butler, although the opportunity was offered him, did not appear before the Committee. He also remained silent when the bill repealing the laws under which his client Jayne had acted was reported to and acted 'upon by the House ; and subsequently, when another bill repealing the laws under which another client and pro/e^e—Sanborn—had drawn large sums from the Treasury, for nominal and unnecessary services, he absented liimsclf altogether from the House, under the plea of sickness. How this conduct on the part of Gen. Butler was regarded by the press is illus¬ trated by the following extract from the Washington correspondence of the New York World, under date of June 20, 1874 : “ This versatile actor was originally cast two months ago lor the more serious dramas known respectively as the Moiety Investiga¬ tion and the Sanborn Swindle ; but the actor had grave misgivings lest he would cut a sorry ligure in these weighty pieces, and adroitly pleaded sickne.^s, the common excuse of the profession, I'rom the ]}rima donna down to the jack-a-pudding. General Butler fully succeeded in deluding his expected audience for full two months. It was gravely given out that the Essex statesman was passing- gall stones through his body for a divcrsioM; and to keep up the joke he actually sent a doleful and rather pious letter to the Chair- uian of the Ways and Means Committee, pleading in most saintly language that life and health are in the hands of Providence alone. The letter smacked very much of a desire to be at peace and good-will with his fellow men of all stripes and breeds. But no sooner was the moiety bill passed through the House, and the Sanborn bill disposed of, when General Butler came into the House like a playful kitten. Not only was he sprightly in his wit, but his physical bearing never showed greater sprightliness. Not a day had passed since the Sanborn bill was disposed of, and General Butler showed his miraculous cure by crack¬ ing his terribly sharp wit over two or three members at a sitting.” The anticipations of what Gen. Butler would do, based on his private conversation and threats against the firm of Phelps, Dodge & Co., were also set forth about the same time in the following humorous editorial, by the New York Evening Post: AN EXTRAORDINARY HISTORY. 193 A NEW FASHIONED CATAPULT. It is reported from Washington that at a very early date there will be erected in the House of Representatives a novel battery, intended to throw mud to a great distance with immense effect, and it is said that a cele¬ brated Major General is the sole inventor, as he will be the sole engineer of this tremend¬ ous machine. The fortress to be demolished and captured by the new engine is the one which is garrisoned by the well known tirm of Phelps, Dodge & Co. It will be remembered that this same fort was captured by strategy and treachery a year ago, some subordinate officers betraying the stronghold. At that time the citadel had to be ransomed for the amount of SSILOOd. Since then the garrison have thrown up strong entrenchments; and they now stoutly maintain that, like the defenders of Metz, they never would have surrendered except for treason. It is mainly for this boast, and for the reason of their not acquiescing in the consequences of their former betrayal, that the great military chieftain is determined to reduce the stronghold once more, and tliis time by the effectual process of his patent mud battery. He has laid in an immense' supply of mud for ammunition, which is sup¬ posed to have been dug out of the celebrated Dutch Gap Canal. The guns have been fur¬ nished by the well known Custom House firms in this city, which are so celebrated for all kinds of brass castings. The chieftain confidently believes that with bis mud battcrj^ he can not only damage the fort itself, but that if judiciously discharged, and not exploded like a powder boat, it will spoil and bespatter the dresses and even the faces of the household of the garrison, inclu¬ ding women and children, and not even sparing the family vaults of the dead. Some scientific men have suggested that there is great danger of such a mud battery’s burst¬ ing and doing more damage to the engiiieer- in-chief tliaii to the besieged. But this engineer, with great contempt, points to his own mud-proof condition, and has not the slightest fear for his own safety. Great curiosity is evinced to witness the attack, as there is much scepticism on the point wliether this novel operation in warfare is really becoming a decent Christian and honorable legislative body. During the very last week of the session, however, the “ Jfoiefi/’’and tlie “ Nemti'e” as well as the so-called “ (Sanhoni ” bills having passed the House, Gen. Butler on Wednesday, June lltli, asked of the House that the evening of Friday, Juno 19th, might be assigned for general debate, with the understanding tliat lie himself would occupy the floor. As no business was assigned for that evening, “ the granting of the Hall to Butler,” says the correspondent of the N. Y. World, from whom we again quote (under date of June 20th), “was pretty much the same thing as granting it to a company of negro minstrels or to a band of Japs who advertise to swallow knives and spoons. The desire to hear Butler was irresistible, but be by no means got the two thirds assent without trying twice for it. Having failed in his first trial, he cajoled the more fun loving Democrats, and assured them that, whatever happened, it would not be a Democratic funeral, but that, contrariwise, they would be called on to participate in a very jolly wake ; and accordingly General Butler got the floor for Friday. Since the famous Credit Mobilier report there has not been such a full House assembled at the capitol.” As was to have been expected, the speecli of General Butler, made under tile circumstances and at the time above noted, w'as a rearraignment of ^nd an attack on the merchants of New York, and the firm of Phelps, Dodge & Co. in particular, as undoubtedly in his opinion the best method 13 194 CONGRESS AND PHELPS, DODGE & CO. of vindicating himself and tlie clientage of spies, informers and fraudulent revenue contractors whom he had, for pay, counseled and protected ; and for scurrility, mendacity and butfoonery was without parallel in the annals of our national Legislature. The following comprises all that part of it which especially relates to the subject matter of this service : SPEECH OF GENERAL BUTLER. Mr. Speaker, failing health and the imperative direction of my medical adviser of the danger of taking part in a debate which might call for a draught upon physical strength, kept me silent upon the debate on the bills repealing the several moiety laws by means of which the collection of taxes had been assured in all civilized nations. The personal enmities and feelings which egged on the prosecution of the investigations of the Com¬ mittee on Ways and Means have subsided or failed in their specific objects ; personal ambition and hate, which were its impelling motives, have either been satiated or failed in their purposes ; and the bill proposed by the Committee having passed the House without a division, what I may now bring to the attention of the House will not have its weight diminished by the allegation of a desire to defeat an alleged measure of reform for per¬ sonal or private reasons. I assume the experiment of abolishing moieties is to be tried. I only de¬ sire, therefore, now to raise a warning voice against this experiment as one in the interest of the dishonest and unscrupulous importer and tax evader, against the interest of the people as well as the honest and con¬ scientious merchant. What, then, is the moiety system ? It is giving certain large rewards to officials or other persons who will take upon themselves the unpleasant task —which is the duty of every citizen, but wholly neglected—of exposing frauds upon the Government and evasions of its taxes by those by whom the law requires they shall be paid. This system has been the machinery for preventing frauds in the collection of taxes in all civilized countries from time immemorial. We derive our laws in this regard, as indeed in all others, directly from England. It was declared in the House, as an argu¬ ment against it, that the moiety system had been abolished in England, lhat is true ; but the other truth which caused its abolition was not stated in the same connection—and that is. Great Britain has abolished duties upon all articles of importation save seven only, and upon these her tax is substantially a specific and not an ad valorem duty, and she has thrown around those seven articles such safeguards as to compel the honest pay¬ ment of the imports upon them, while we have imposed duties, generally AN EXTEAORDINARY HISTORY. 195 ad valorem, on three thousand tico hundred and eleven articles of importa¬ tion, of every possible description, and in the value of each of which every custom officer would be required to be skilled and expert in addition to his assured honest}^ in order to an accurate collection of the imposed duties ; and, in addition, experience shows that he would have to be still more expert as a detective in discovering and thwarting the many devices by which the just dues of the country are evaded and the revenues defrauded by the skilled, expert, and unscrupulous importer. It has been said and I'eiterated, “Why cannot the revenue officers col¬ lect all the revenues ? If they are honest and do their duty, what neces¬ sity to have informers and detectives?” The answer is a plain one : The more honest the officer the more unsuspecting of fraud, and the more easih^ deceived; and you cannot get men for $1,500 a year who are learned in the whole circle of human knowledge as applied to the many thousand articles of use, necessity and luxury which are imported and taxed by a nation, comprising every variety of climate and every grade of necessity and lux¬ ury in its inhabitants, surrounded by a customs line of more than twelve thousand miles, to say nothing of Alaska, over which importations may be made without the payment of duties unless prevented by the customs officers. Does not this simple statement show the entire impossibility of collect¬ ing the just taxes upon this number of articles by the knowledge of the customs officers, to be imported under an ad valorem duty founded upon their valuations, or to protect from smuggling so extended a customs line by any practical number of officials ? How, then, can smuggling and the much more extended and injurious crime, the importation of goods by false values, and false weight and measurement, be prevented? Only by the imposition of penalties so severe that they will make the hazard of the business more than commensurate with the profits. The smuggler must hide in nooks and inlets, and bring in his goods by stealth under the cover of darkness. Of necessity they are few and of little cost. The fraudulent importer by a false valuation brings in his goods by the cargo, in three thousand ton steamers plying weekly between New York and Liv erpool, and passes them through by a bribed officer at under valuation on a perjured invoice of a confederate partner house in Europe, cheats the people of the United ’States out of millions, thereby becomes a “merchant prince,” and covers his sins perhaps by building churches or other ostentatious acts of advertising benevolence which bring trade to his house; at the same time he lulls the suspicions and blinds the vigilance of the honest customs officer ; for how can he believe that such a benevolent, rich and praying merchant can be getting the means for his charities by 196 CONGEESS AND PHELPS, DODGE & CO. defrauding the revenue, cheating tlio people out of a million dollars, and giving a thousand in charity that he may not be suspected of the fraud? I hope to convince the House before I get through that this is no fancy picture. General Butler then entered into a statement touching the exportation of tea in bond free of duty, from Boston to the British Provinces bordering on the coast of Maine, for the purpose rf being subsequently reimported to the United States without payment of duty (the total quantity so exported for all purposes from Boston in 1867 having been 338,808 lbs.), and con¬ tinued: But this exporting in bond of a few hundred thousand pounds of tea to half civilized islands, as I have said before, is but a bagatelle in com¬ parison with the amount of frauds committed upon the revenue by false and fraiubilent invoices of high cost merchandise. I have, therefore, been at some pains to get for the use of the House some accurate data founded upon statistics, which may be verified by anybody who will take the same pains that I have done, and which cannot be successfully contra¬ dicted. Upon these I make this startling announcement to the House and the country: That the United States does not receive more than Iwo thirds of her revenue upon all articles on which ad valorem duties are imposed in whole or in jyart, so that to-day no more than 67 per cent, of our revenues are collected, owing to this class of frauds added to the others of which I have been speaking; or, in other words, if we could collect our revenues according to the present rate of taxation, we could pay off yearly more than one hundred millions of the national debt, imposing no greater bur¬ dens on the people than now, because all of these revenues of which the country is defrauded are charged to the consumer as if paid by the mer¬ chant; so that by these enormous frauds the country is doubly the loser, first in its revenue, and secondly by the consumer paying it to the fraud¬ ulent merchant, generally an importer who has a branch of his mercantile house in this country and in the country from which his goods come. I would not dare, sir, to make this very startling, nay, wonderful and almost incredible statement as to these frauds of under valuation and false invoices, were I not fortified by proof which I bring to the attention of the House, premising only that great as are the frauds, with all possible penalties, seizure of books and moieties to informers, and all the safeguards that the experience of the Custom House officers of England and this country has enabled us to throw around the revenues of the United States, these safe¬ guards, and penalties, and hindrances to fraud have, by the bill of the Com¬ mittee on Ways and Means, almost every one of them been removed. AN EXTRAORDINARY HISTORY. 197 Now to the proof. Let us take a manufacture which has but just begun in this country. Worsted Stuffs —^Fraudulent under valuations in worsted stuffs of all kinds sent from England to the Uniied States are simply enormous, as the subjoined examples will demonstrate ; Combed,' not milled worsted stuffs, exported from Great Britain in one year, total number of yards, 154,206,478. Of these there were sent to the United States 48,542,218 yards; to other countries, 105,664,260 yards. Total value, as declared in the invoices to the United States, $10,324,742.24; toother countries, $33,331,100.44 Average invoice value per yard to the United States, 21 cents; to other countries where there is no tariff of duties, 39,7 cents. Difference, or undervaluation, 47 per cent. Estimated annual loss on duties on this single class of goods, $3,007,190.40. Other Worsted Stuffs. —Total exported in five months, 85,299,174 yard.'^; to the United States, 28,442,728 yards; to other countries, 56,856,449 yards. Total declared value to the United States, $5,073,975,28; to other countries,$18,038,050.80. Average per yard to the United States, 18 cents; to other countries, 31^ cents. Difference, or under valuation, 45 per cent. The whole needle trade of Redditch and vicinity is carried on on a similar basis. It is like other branches of our foreign trade—entirely in the hands of the foreign manufacturer and his resident agent or partner here, thus defying detection and exposure except by the greatest skill stimu¬ lated by the highest rewards. Certain it is that all articles of foreign manufacture and importation shipped to the United States are in quality and cost far better than the average shipped to other countries, and, there¬ fore, the average rate of invoicing should be much higher for the United States, whereas, as we have seen, it is vastly lower. This fact, therefore, clearly demonstrates such under valuation is done for the sole purpose, of defrauding our revenues. To show the accuracy of the conclusion it is only necessary to turn to articles which pay purely specific duties. By their under valuation nothing is to be gained.* Take for example— Cotton Goods. —Total of heavy printed cotton exported in the same year * If Gen. Butler had, as he pretended, been animated, in making this speech, by a desire to do justice and discuss the whole subject of arbitrar}” Custom House proceedings fairly, lie would not have omitted to call tlie attention of the House and the public to the fact that the firm of Phelps, Dodge & Co., as far back as the year 1868 (three years before any charge of under valuations were pre'erred against them), repeatedly applied to the Treasury Department, and used all their influence with Congressional Committees., to have the duties on tin and tin plates (the articles in respect to which under valuations were sub¬ sequently alleged to have occured) changed from ad valorem to corresponding specific duties, and were not able to effect it. 198 CONGRESS ANl) PHELPS, DODGE & CO. above from Great Britain, 715,559,642 yards ; to the United States, Vi 384 430 yards ; other countries, 688,175,212 yards. Total declared value tVthe United States, $3,258,229.92; to other countries, $72,224,682.20. Average per yard to the United States, Ilf cents; to other countries, 10.^ cents. Light Printed CoTTONS.-Total exported same ,year, 141,604,328 yards ; to tlie United States, 9,324,688 yards ; other countries, 132,279,640 yards. Total declared value to the United States, $1,151,591 88 ; other countries, $13,985,843.07. Average per yard to the United States, 12 cents ; to other countries, 10 cents. Here it will be seen that as soon as we approach goods paying exclu¬ sively a specific duty the average rate of invoicing is higher to the United States than to other countries, proving that a better class of goods gener¬ ally is sent here than to other countries, and leading to the inevitable con- chision tliat the same difference of higher rates of invoicing would prevail in worsteds, linens, carpets, &c., if they also paid a specific instead of an ad valorem or mixed duty. The same facts are true regarding imports from other countries. Linens. —Exports in one year to the United States, 70,234,347 yards* Total declared value, $10,507,790.04. Average invoice value, 14.9 cents per vard. Exports same year to France, Prussia and Spain, 7,404,154 yaids. Total declared value, $1,046,214.72. Average invoice value, 24.8 cents per yard. Difference, or under valuation in linens sent to the United States, 43 per cent. Linen Damask and Diaper.— Exported to all countries in one year, 1,397,- 077 yards; to the United States, 1,267,390 yards; other countries, 129,687 yards. Total declared value to the United States, $413,311.80; to other countries, $56,081.08. Average per yard to the United States, 32 cents; to other countries, 43 cents. Under valuation, 26 per cent. The under valuation in the exports of carpets from the looms of Kidder¬ minster, Halifax, etc., is enormous. In bags, leather, gloves, percussion caps, etc., the same ratio of under valuation is shown to exist, as in fact it does with all articles paying an ad valorem duty. Note. The true character of these statements by Gen. Butler, and that their main object was deception, were thoroughly exposed at the time by the N. Y. World and other leading journals. The following are illustrations of such exposures : Let us examine Mr. Butler’s figures. If I teresting to know by which process of aritlime- 105 , 664,260 yards of stuffs sent by England tic he makes the average 39.7 cents per yard, to other countries besides the United States Eor if anybody will take the trouble to multi- were valued at $ 33 , 331 , 100 . 44 , it would be in-1 ply 105 . 664,260 yards by 39.7 cents the re- AN EXTRAORDINARY HISTORY. 199 suit of the operation will be $41,948,711.22 or over $8,600,000 more than Mr. Bmlcr gives as the English return. Instead of be¬ ing 39.7 cents the true average per yard is barely 31.64. Butler goes on to say that the under valua¬ tion is 47 per cent., and that owing to this under valuation on this particidar article the Treasury loses annually $3,007,290.40. But if all the stuff goods sent to the United States had been invoiced at the true average price of stuff goods sent elsewhere from Eng¬ land, that is, at 31.64 cents per 3 'ard, the total value of these goods would have bt en $15,358,758.07, instead of $10,324,741 24, as stated by Butler, making an under valuation of $5,034,016.83. And as wonsted s uff goods are subject to a specific duty of so much per pound, and in addition to an ad valorem duty Discussing the same subject the Bo All will agree that the laws for the collec¬ tion of customs should be simple and calcu¬ lated to discourage fraud. But all good au¬ thorities declare that our laws are compli¬ cated, difScult to interpret or to applj', and directly calculated to invite fraud. Free Traders and Protectionists unite in preferring specific to ad valorem duties, because speci¬ fic duties furnish no chance for the most dangerous of all frauds — that of under vahia tion. The necessity for any ad valorem du¬ ties is a misforiune, and they should be re¬ duced at once to the lowest possible number. But there is a class of duties imposed by our customs laws neither specific nor ad va¬ lorem —duties dependent upon value, but in¬ creasing at a jump, when a certain limit of value is reached. These are the duties that chiefly tempt importers to fraud, and that often make it impossible for merchants to cal¬ culate what duties they should pay, or to fore¬ see whether an importation would be profit¬ able or ruinous. As an example the duty on ‘-wools of the third class ” is three cents per pound when the value is twelve cents or less, and the duty mounts to six cents when the value exceeds twelve cents Thus it depends upon the fraction of a mill whether the importer shall pay three cents or six upon his wool; and this may make all the difference between gain and loss. In one heavy importation at this port the value of Coadova wool was found to be 11 cents. If it had been worth three tenths of a mill more the duty would have been increased three cents per pound, making a difference on this invoice of twelve thousand dollars in gold. We need not point of 35 per cent., the loss to the Treasury on tlic $5,034,016 at 35 per cent, is only $1,761,- 905.60, instead of $3,007,190.40, as esti¬ mated by Butler. It is hardly necessary to remind intelligent people that American im¬ porters arc not necessarily guilty of fraud upon the revenue because the woollen stuffs which we purchase from England are cheaper than those inirchascd by other countries. For tlie fact that they- are imported under a lower valuation than those sent to other countries, however, wo have only Butler’s statement, and this may be accepted as about as accurate as is his calculation that an im¬ portation of 10.'),664,260 yards of stuff, cost¬ ing in the aggregate $33,331,100.44, costs 39.7 cents per yard.— Review of Butler's S})eech, Xew York World. don Journal also spoke as follows : out the great temptation to under value such an invoice. This is not a solittiry case, but one of a hundred, and in many cases, while Cordova wool was imported in hide packages, the rate of duty depended upon the question whether the weight of the package should be Considered in estimating the value by the pound. In the case of dry- goods the complications are greater. For example, on women's and children’s dress goods and on Italian cloths of wool, etc., worth twenty cents per square yard, the duty is six cents per square yard and thirty-five percent, ad valorem; valued above twenty cents eight cents per square yard, and forty per cent, ad valorem, with a duty of fifty cents and thirty--five per cent, ad valorem on goods weighing four ounces and over per square yard, with ten per cent, of duty off by- the last tariff. In this class of cases the merchant fre¬ quently cannot tell what the duty will be when he orders the goods, nor when he re¬ ceives them, nor when ho enters them. Let us suppose that he has ordered an invoice of cloths, worth just twenty cents per yard— that is, just as good as can be imported under the low rate. A clianve in the atmosphere, shrinking the width of his cloths, while it does not affect their value as a whole, does affect their value per square yard, and trans¬ fers them from the '* six thirty-five ” schedule to the ‘ eight forty schedule. Again, an importer orders goods weighing a fraction less than four ounces—that is, just as substantial as they can be made without coming under the fifty cent, duty—but it is hard to shave so close, and a little additional wool woven 200 CONGEESS AND PHELPS, DODGE & CO. into liis cloth, without adding appreciably to its value, changes the rate from ^eight cents per yard and forty per cent, ad valorem to fifty cents per pound and thirty-five per cent. ad valorem. Here, again, the duty may depend upon the state of the atmosphere, and a lew days of moist weather may ruinously afi'ect the amount And subfoquenth' the New 'iorh Butler’s statements, further exposed partisan conduct, as follows : General Butler, in his post-prandial speech in the. House of Representatives, on the evening of June 19, after exhausting his care¬ fully collected “facts,” proceeded to make the following curt and unsupported charge against the importers of carpets; “ The iiiiclei- valuation in the exports of carpets from the looms of Kidderminster, Halifax, etc., is enoimous.” This is equivalent to specifically charging with the practice of under valuation the great firms of A. T. Stewart .t Co., Arnold & Con¬ stable, Chittenden, H. B. ('lafin &Co., and two or three others who import ninety per cent, of all the foreign made carpets used in the United States. And even if Butler's speech had not already been shewn to be as full of inaccuracies as post-prandial specclies are generally apt to be, most people would pre¬ fer to trust the lionesty of these firms sooner than they would trust the veracity of Butler when the two were brought into conflict. But an iiispecrion of the tariff on carpets, and of the Custom House records of carpets im¬ ported during the 3’ear 1873, will morall_y re¬ fute Butler’s charge without further words. The duty on carpets is as follows: “On Aubusson and Axminster carpets, .50 per cent, arl valurem; on Brussels carpets wrought by the Jaquard machine, 44c. per square yard, and 35 per cent, ad valorem ; on Brussels carpets printed on the warp, 50c. per square yard; on Brussels tap¬ estry, 28c. per square yard and 35 per cent, ad valorem." Such is the complicated duty on carpets, in¬ vented bjr the pious Bigelow, the reputed in¬ ventor of the Jaquard machine. Tiie average value of the several grades of carpets imported, and the valuation on which they actually paid duty for the year 1873, is as follows; “ 220.012 yards Aubusson and Axminster carpets, average cost $1.90 3-5 per yard; 392,700 yards Brus- sel.s caipets, wrought by the Jaquard machine, $1.48 3-5 per yard; 789 yai'da Brussels carpets, printed on the warp, $1.58, peryard; 2,598,480yaids Brussels tapestry, 90 cents per jard.” With these statistical facts before them, of duties to be paid. These are not imagin¬ ary cases, but are of frequent occurrence un¬ der our tariff. They do not lead to forfeit¬ ures, nor expose importers to penalties, hnt they may make profits uncertain, and add fearfully to Ihe risks of busines.?. And we have only begun to state the perils that en¬ compass the importer of dry goods. World, returning to the subject of his seemingiy fair but really most persons tolerably familiar with the carpet trade will be able to determine whether But¬ ler’s allegation of enormous under valuations on importations of carpets has any foundation in fact. G eneral Butler goes on to say : “In bags, leather, gloves, percussion caps, etc., the same ratio of undervaluation is shown to exist, as in fact it does with all articles pa3iiig an ad va¬ lorem duty.’’ In regard to one of the articles above enumerated by General Butler, viz., gloves, he scorns to forget that he himself sliowed Ills clients Messrs. Goodsell, Baudilion & Co., of Boston, how to whip the under valuation devil around the Custom House stump. We gave eighteen months ago the history of these glove importations, but we feel called upon to repeat it for the especial benefit of Butler. The house of Goodsell, Baudilion & Co., in Boston, has a resident partner in Naples who manufactures tlie Joseph glove. These gloves are ptrotected in the United States by a trade mark, and no other house except Goodsell, Baudilion & Co., of Boston, are allowed to import them. The Boston house has for years invoiced the .Toscpli glove at 15 lire for the one button and 19 lire for tlie two but¬ ton gloves; while similar gloves, not as good, and not having the name of Joseph stamped in them, could not be bought in Naples for less than 19 to 20 lire for the one button, and 24: lire for the two button gloves. The Boston house soon gained the monopoly of common gloves in the American market, and kept it until they were brought up by the Boston appraiser, incited to the act, no doubt, by all other importers of gloves, who cliarged that Goodsell, Baudilion & Co, grossly under valued the Joseph glove. The accused firm shrewdly employed Butler himself to defend them, and Butler did it in a way that proved ills cunning. He advised his clients to estab¬ lish a market value for the Joseph glove in Naples, by duly advertising and lioldmg a public sale. This the Naples house did in the following manner; They advertised a AN EXTRAORDINARY HISTORY. 201 large sale of the Joseph glove in the usual, regular way—hut they added one proviso, which contained the sting of the transaction. It was “ that these gloves can be shipped to and sold in every market in the world except in the United States of America where they are protected by the trade mark.” This was almost equivalent to offering a lot of Ameri¬ can flags for sale, with the proviso that they can he used in any country and on any vessel except in the United States, or on an Ameri¬ can vessel. The consequence was that the gloves were sold in Naples at the exact price at which the Boston house invoiced them, viz., 15 and 19 lire, respectively. And the merchants’ appraisement in Boston up to 1872-73 gave it in favor of Butler’s client. The WorW early in 1873 exposed this impu¬ dent piece of business, and called the atten¬ tion of the two Boston Secretaries of the Treasury to it. Mr. Kerr, of Indiana, called for the papers, and the consequence w^as a new stoppage of invoices, a fresh merchants’ appraisement, and a condemnation of Good- sell, Baudillon & Co. for under vahiations. In this pickle the House is now soaking, nor is it likely that with Mr. Bristow at the head of the Treasury even Butler will be able to extricate them. Thus it appears that this virtuous up¬ holder of the most stringent Custom House laws can find loopholes for under valuers if professionally employed by the right parties, and advise the most approved method for effecting successful under valuation. Verily Butler’s record proves him as trustworthy w'hen he pretends to watch the Custom House as did the nanny goat when set to watch a cabbage garden. — N. K. Wo7-ld. CONTINUATION OF GENERAL BUTLER’s REMARKS. The Comraittee on Ways and Means may reply to this—which would be the fact—that they have not had tliese statistics before them. Certainly not. If they have, their report does not show it. They have examined only cases of individual merchants to find out if the laws have worked sup¬ posed hardships, and not the case of the people, to see how they are defrauded. The Committee put forward most prominently of all, as exam¬ ple of the hardship of the law upon honest men, the case of Phelps, Dodge &Co., making the case of that firm the groundwork for all their recommended legislation ; and in their report, and in the debate which followed, and which for days members of the Committee had substantially to themselves, no one has uttered a word of animadversion upon Phelps, Dodge & Co. No harsh language is used—all that is reserved for the officer who brought their pleaded guilt to light. In the course of the evidence, as taken before the Committee, there seems to be a studied and careful attempt that that firm shall appear to the country as honest and injured merchants, who had, by the de¬ vices of the officers of the Government, been robbed of a very large sum of money. All the lawyers and chairmen ofboards of trade, and there were many, made it the groundwork of their attacks upon the revenue laws. It went forth as the cheval de balaille of those who desired to take off all effective penalties to prevent frauds in the collection of the revenue. The facts of this case, as stated by Mr. Dodge, the senior partner, whose testimony as a witness occupied longer time than any other witness save one, and to make room for whom the representatives of the National Board of Trade gave way, are these: (Let us premise by saying, however, that none of the active junior partners of the house who swore to the invoices, and were charged with committing the frauds, were sent for by the Com- 202 CONGRESS AND PHELPS, DODGE & CO. mittee.) Phelps, Dodge & Co., a firm of many years’ standing, who had imported between “three and four hundred million dollars’worth of goods, and had paid the United States Government more than fifty millions of duties” very honest—giving the very language of Mr. Dodge—“I will say it with perfect confidence, that our good name and our integrity were never assailed in these many years ui til it was assailed by the Government —meaning the charge, mads by a special agent of the Treasury, of false valuation in December, 1872. Mr. Dodge again reiterates that statement: “ The first knowledge or hint, in forty odd years of business that I have had with the Government, that I was accused of any dereliction of duty, was when sitting at the board of one of our large institutions I received a note from my partner, asking me to come to the Custom House (in December, 1872); that thereupon he went, and found his firm accused of having many invoices for five years—which was as far as the Government could go back on account of the statute of limitations—sworn to at a false valuation, for the purpose of defrauding the revenue; and that the books and papers of the firm touching those importations would be seized if not voluntarily pro¬ duced to the officers. Thereupon, yielding to the necessity, his books and papers were produced, and from those books and papers the special agent of the Treasury made up an account, first of $260,000, but afterwards com¬ ing up to the enormous sum of $271,000, the amount of articles in the invoices in which “simple mistakes” only, as Mr. Dodge now declares, had been made in stating their value, by which the Government had lost duties to the amount of some sixteen hundred dollars only. But Phelps, Dodge & Co., fearing that these “simple mistakes” would hold them guilty in a court, and being “ subject to a system of terrorism ” which they could not withstand, in order to save themselves from the oppressions of the Govern¬ ment officials, in entire consciousness of integrity and innocence of all intended or actual wrong, after they had taken counsel of four most eminent lawyers, and after reflecting upon the subject for more than six weeks, made an offer of compromise of penalties for the crime of importation by false invoices, which they confessed in writing they had done, and paid this very great sum of money into the Treasurv as penalty. this is the statement, in brief, as Mr. Dodge puts it forward in connection with the record. He admits that the house of Phelps, Dodge & Co. has had, for many years, a branch house in Liverpool—Phelps, James & Co.—which was substantially the same in interestas the house in New York—composed of the same Phelps and the same James as the house in New York. To ex¬ clude all conclusion that this Mr. James of this firm in Liverpool did any wrong, Mr. Dodge tells us that Mr. James joined the firm and removed to Liverpool— AN EXTRAORDINARY" HISTORY. 203 "Where, for over forty years, he has been the resident partner, sustaining the character of a high-minded, respected and honorable merchant, and for a number of years past the oldest American merchant in England; his name is a S3'nonym of honesty and uprightness, and shedding a lustre on his own country and American merchants ; gratified by the honors con¬ ferred abroad, but ever looking with pride, as an American citizen, for protection to his own country. In all this time not a question had ever arisen as to the vast shipments made to the house in New York. On entering his office one day in December, 1872, he found the fol¬ lowing despatch, in leaded lines, in the newspapers; ‘Phelps, Dodge & Co., New York. —This great firm have had their books and papers seized by the United States for alleged frauds on the revenue to the amount of $1,750,000." I will not attempt to describe the feelings of such a man. I will simplj^ say the shock came well nigh killing him ; nor has he ever entirely recovered. He felt that a llfo-long repu¬ tation, dearer to him than aught else, had been struck down in a moment by his own Grov- ernment, on which he had depended for protection. He had passed his three-score and ten until then with an unblemished character, and felt that, at least, he had a right to demand that the should be ‘ considered innocent till proved guiltj'.’ Can a law liable to produce such results be just?" If this account of Mr Dodge is in the main true; nay, if it is found to be true in any substantial portion; if his firm had maintained always a name for integrity and honesty of dealing with the Liovernment; if his statement about Mr. James be true, that “ in all this lime not a question had ever arisen as to the vast shipments made to the house in New York,” then I agree “that a law liable to produce such results not only i.s unjust ” and should be repealed, but that it is the duty of the United States Gov- enunent to condignly punish the officers who have done so gross a wrong to such honorable men, and not only to repay them the money that has been extorted from them, but to give them a very large sum assomeslight reparation for the unqualified wrong and unheard-of injury without just cause committed upon them. But if all these are not true, in substance or in fact; if the whole story in all its essential parts is as false as the per¬ jured invoices under which Phelps, Dodge & Co. pleaded guilty that they passed their goods without tax into the country, then the law that catches perjured scoundrels and smuggling villains and punishes them, however severely, ought to be sustained and made more stringent, not less. The first statement of Mr. Dodge which challenges attention is whether the house in New York and Liverpool has, until the latter part of Decem¬ ber, 1872, always borne this unblemished reputation without fault or blot, which he states; and have the dealings of that house with the Government been always just and true, as Christian “ merchant princes ’ ought to have dealt with the Government ? Because, if that be so, it can hardly be be¬ lieved that for a comparatively small sum of money a house of such wealth and good repute has suddenl)" become so vile and so criminal as they con¬ fessed themselves to be in their letter to the Secretary of the Ireasury 204 CONGRESS AND PHELPS, DODGE & CO. when the}^ desired to “settle” with the Government for their crimes. If, on the other hand, it is found that this firm have been cheating this Gov¬ ernment for long years, .then we shall conclude that they have only been caught at their old tricks. Now, Mr. Speaker, it is a notorious fact to everybody having to do with importations in New York officially for many years past, that the house of Phelps, Dodge-& Co. have been confessed to be guilty of the most petty and outrageous smuggling, taking advantage of all technical points to get their goods in without paying duties that could be most ingeniously con ceived. A harsh accusation this, you say. Yes, and one that ought not to be made unless it can be made good. Well, then, sir, many years ago, since the forty years that Mr. James has been resident partner of the house in Liverpool and interested in the house in New York, during which Dodge says not a que.stion has been raised as to the vast shipments of this house, and since Phelps, Dodge & Go. have been one of the largest importers in the country of lead, tin and other metals, the Congress of the United States passed a law to encourage American art, a law which in various phases you will find on your statute books as the tariff was revised from time to time, which was in effect that statuary of American artists should come in free. Whereupon this firm, of which Mr. James, this “honest, honored merchant,” was resident partner and consignor, had hundreds and thou.-^and.s of tons of lead and block tin and copper cast into statuettes of the Goddess of Liberty, and Washington, and Jefferson, and imported them into this country as works of American art, thereby escaping the duty. But when here they were taken from the hold of the vessel to the ware¬ house, and from the warehouse went to the melting pot, being sold to their customers for pig lead and tin.* Now, right here, I challenge any honest, just minded man to look me iu the face and say that an “ honest merchant ” or a “Christian gentleman” ever did such a thing to cheat his Government, whether a Janies of Liver¬ pool or a Dodge of New York. And yet this Dodge tells us that the “first knowdedge or hint, in forty odd years of business that I have had with the Government, that I was accused of any dereliction of duty ” was in Decem¬ ber, 1812, Was that true? So far from its being true, Mr. Speaker, Con¬ gress had to change this very law about American statuary on account of these fraudulent importations and cheating of the revenue of which I have spoken by this very firm; and this firm was accused of this fraud upon the revenue on the 1st day of March, 1865, on this very floor. I send to the * For demonstration of the malignity and entire falsity of this and subsequent charges preferred ih this speech of Gen. Butler, against the firm of Phelps, Dodge & Co., attention is here asked to the card of the firm and other full and comprenensive statements presented hereafter in these pages. AN EXTRAORDINARY HISTORY. 205 Clerk to be read an extract from tbc Congressional Globe of that date, part two second session Thirty-eighth Congress, page 1255. The fifth section of the tariff bill was under discussion, and was as follows; And be it further enacted, That the term statuary, as used in the laws now in force impos¬ ing duties on foreign importations, shall be understood to include professional productions of a statuary or a sculptor only. Mr. Keenan. —I desire some explanation of this section. I should like to know what this unprofessional statuary is. Has this provision reference to those people who import leaden statues of Liberty, etc. ? Mr. Moeeill. —I may state, in brief, that it has been found that parties have in many cases evaded the payment of duties by importing articles in form of statuary when they' could not legitimately rank as such. In some instances lead has been thus imported to a large extent. We had a law by which statuary w'as admitted free; and statues of the “ Father of his Country” and of the “Author of the Declaration of Independence” were brought over in that way. I believe that the gentleman is answered. Mr. Eldeedge. —I would like to know from the gentleman from Vermont whether this does not refer to one particular firm. I w'ant to know whether tliis does not refer to Phelps, Dodge & Co., and that firm alone? Mr. Stevens. —When statuary was admitted free we had statues of Webster and Clay and others in copper and lead imported, and as soon as they were landed and taken out of the Custom House they were melted down. It was a fraud upon the revenue. Mr. Eldeedge. —What firm did that ? Mr. Stevens. —Phelps, Dodge & Co. Now, as Mr. Dodge himself came into Congress as a member of this House at the very next session, one would have supposed that he would have arisen to explain if this very grave charge upon the President of the Young Men’s Christian Association was not true. So far the record. I am told, and I believe that there are men in this House who know the fact that Mr. Dodge himself admitted before the Committee on Ways and Means of a former House, when questioned, that these importations were made ; the fact has never been denied, and can be easily substantiated. Imagine the fine feelings of this old Mr. James, the “honored mer¬ chant” of Liverpool, when he was loading up this fraudulent statuary to cheat the revenue of his country! I have no doubt that it was quite true, as Dodge states, that when James heard that Phelps, Dodge & Co.’s books had been seized in New York in 1813, he nearly fell dead, or it almost killed him, for he knew how fraudu¬ lent their acts were and always had been, and feared the consequences. There was a merchant of high standing in Boston not many years ago who. when charged with frauds upon the revenue, made confession by commit¬ ting suicide. Importing of lead, and tin, and copper in the form of statuary was by no means the most serious attack of this firm upon the revenues of the Gov¬ ernment for their own benefit. Cast your mind back, Mr. Speaker, to April, 206 CONGEESS AND PHELPS, DODGE & CO. 1864, the very darkest hours of the war, when Grant was reorganizing the Army of the Potomac for his march on Richmond; when every patriotic man waspreparing himself for the final great struggle; when the nation needed every dollar tliat it could command, and when it became necessary to add one half to our revenues by taxation to sustain our falling credit, with gold at 180. What shall we say of a firm which, in that trying hour of the nation’s peril, exercised its infernal ingenuity in devising ways and means to defraud our impoverished Treasury of millions, and succeeded in so doing ? To meet the exigency we are obliged to pass a joint resolution providing that until the end of sixty days 50 per cent, of the rates of duties imposed by law should be added to the then present duties and imposts on all goods, wares and merchandise, so that we might have that time in which to adjust the tariffs; and then, just sixty days from that time, to wit, on the 30th of June, we passed an “An act to increase the duties on imports.” It covered nearly all importations, and, among other things, it provided— On tin plates, and iron galvanized or coated witli any metal by electric batteries or other¬ wise, 2| cents a pound. At this time, if ever, Mr. Speaker, it became all patriotic men, all lovers of the country, to do everything that possibly could be done to aid the rev¬ enues of the country, to sustain its credit and enable the soldiers to receive their pay, and to support the armies in the field. Let us see, then, what the course of this firm of Christian merchants, Phelps, Dodge & Co , was in that crisis of their country’s need. They were the largest importers of tin plates in the country, and that article is one of the largest of their import¬ ations. As we shall see in a moment, it ought to yield a large revenue. The duty upon it at that time was 25 per cent, ad valorem, which would be about IJ cents per pound. It was the intention of Congress to increase it; therefore they enacted that “on tin plates, and iron galvanized or coated,” etc., there should be a duty of 2^ cents a pound. But Mr. William E. Dodge went to the Treasury Department of the United States in his own person, as I have the means of showing, and there advocated a reading of that law which was sanctioned neither by the letter, text, spirit nor mean¬ ing, nor by the true and just thought of any patriot. He procured an opinion from the Treasury Department by which the comma was construed to be removed after the word “plates ” and inserted after the word “iron,” so as to make it read: On tin plates and iron, galvanized or coated with any metal by electric batteries or other¬ wise, 2^ cents a pound. So that, with that construction, the duty had not been raised on tin AN EXTRAORDINARY HISTORY. 207 plates at all, but only on “ galvanized ” tin plates. Who ever heard of a galvanized tin plate ? None was ever imported, I venture to say, or ever will be. The consequence was, that all the tin plates imported into the United States, of which Phelps, Dodge & Co. were by far the largest importers, came in at 25 per cent, ad valorem instead of 2^ cents a pound, which was a very large increase of duty. I send a table to the Clerk to show how this would operate in favor of Phelps, Dodge & Co. I have not been able to obtain the statistics of their importations in I864-’65, but Ihavo their importations for IStO-’Il, in which, taking the average both of weight and value, the following result is shown. The Clerk read as foliow's; Imports of Tin Plates hy Phelps, Dodge cfc Co. for the year ISIO-’tl. 1870, (boxes). $585,378 1871, (boxes). 734,112 Total, (boxes). 1, 319, 490 Average weight, (pounds), say. 125 Total weight, (pounds). 164, 936, 250 Duty, (cents). 2i Total duty. $4,123, 406 25 Total number of boxes, 1,319,490, at an average value of 22 shillings sterling per box, making £1,551,439; equal in United States gold to .$7,024,965; duty at 25 per cent., $1,756,241, KECAPITULATION. Amount of duty at specific rate of 2 ^ cents per pound. $4,123,406 Amount of duty at ad valorem rate of 25 per cent. 1,756,241 Difference in favor of importer . $2,367,165 Mr. Butler, of Massachusetts.—Showing, it seems to me clearly, even admitting that my average may be considerably out of the way, a difference of at least 100 per cent, in favor of the ad valorem rate. Whether that average value is precisely correct or not is of no conse¬ quence, because it would not substantially vary the figures, and that shows that in 1870-’71, and every other year from 1864 until the change of the tariff on June 6, 1812, would make a difference in favor of Phelps, Dodge & Co. and against the United States, by this change of the law at the personal solicitation of William E. Dodge with the Treasury officers of the United States, of $2,367,000, and over four millions annually, taking the whole importation of the United States during that eight years. VVe have heard, in the matter of the duty on fruits, the earnest denunci- o.tion of the Committee on Ways and Means of the Treasury Department 208 CONGRESS AND PHELPS, DODGE & CO. for not paying attention to the position of a comma, by wnich $300,000 Avere refunded; but the Committee on Ways and Means have told the House nothing of the effect in favor of Phelps, Dodge & Co., not solely of looking out for a comma, but the deliberate taking of a comma from one part of a law, where it had been placed by Congress, and putting it in another place where there was none, by which quite four millions of reve¬ nue were lost to the Government annually during a period of eight years, and that in favor of the fraudulent importer. In verification of this, I send to the clerk a letter ol the Secretary of the Treasury of July 22, 1864, and 1 beg him to read the portion between the brackets. The Clerk read as follows; Sir: Your letter of the 12th instant is received, requesting to be instructed in writing in relation to the jDroper construction of the language of the second paragraph on the ninth page of the printed tariff of June 30, 1864, viz: “On tin plates, and iron galvanized or coated with any metal by electric batteries, or otherwise, 23^ cents per pouud.’’ It would appear that an error of iDunctuation has been made by some one; most probably by the clerk who engrossed that part of the act. If the comma which is inserted after the word “ plates " be omitted, and a comma placed after the word “ iron,” the true sense will be had, which unquestionably is that the tin plates, as well as the iron, must be galvanized or coated Avith any metal by electric batteries, or otherwise, in order to bring them within the provision. Mr. Bai’LER, of lilassacliusetts.—And that constructiou remains even unto this day; for we find in the authorized tariff of the Treasury Depart¬ ment, published after the act of June G, I87;i, which took off 10 per cent. from the duties, the following remarkable announcement: Tin plates, galvanized or coated with any metal otherwise than by electric batteries, 2^ cents per pound. Ordinary tin plates, or tins other than tlie above, 15 per cent, ad valorem. And yet, with this vast fraud upon the revenue by this firm staring them in the face, if they had chosen to examine it, the Committee on Ways and Means have recommended the diminution of duty on tin plates, upon the petition of Phelps, Dodge & Co., to one cent per pound, and passed the bill through under suspension of the rules. Mr. Dawes.— No, sir; one cent and a quarter, against their protest. Mr. Butler, of Massachusetts.—-Ah! One cent and a quarter. Which was against their protest, the one cent or the quarter cent ? Mr. Dawes. —I gave you fair answer, sir. Mr. Butler, of Massachusetts.—Certainly, sir. I suppose you would not give any other. What made you think you would ? Mr. Dawes.— You did not treat it fairly. Ordinarily such an answer would be fairly treated. Mr. Butler, of Massachusetts. Wait a moment. 1 will read the memo¬ rial sent to Congress on this subject: AN EXTRAORDINARY HISTORY. 209 To the honorable Finance Committee of the Senate and Home of Representatives of the United States. Tour memorialists—merchants, importers, dealers and workers of tinplates—respectfully request that you will consider the expediency and recommend to Congress the conversion of its present ad valorem duty on the import of tin plates into a corresponding and equivalent specific duty, as a measure calculated to simplify and increase the collection of customs revenue. ,(.*** * * * The importations of tin plates during the last two fiscal years were in value as follows: 1872. —Amount in value imported. $12,312,428 1873. —Amount in value imported... 14,993,650 Total value... $27,306,078 That with an ad valorem duty of 15 per cent, the accruing revenue would have amounted on this importation to $4,095,761.70. But the actual weight imported during the above two years was: Pounds. 1872. —G-ross weight, including boxes. 209,671,640 1873. —Gross weight, including boxes... 214,069,374 Total pounds. 423,741,014 which import, at a specific duty of one cent per pound, gross weight (or including the weight of the packages), would have yielded a revenue of $4,237,410.14. The difference in two years’ revenue receipts, therefore, between the present ad valorem and the recommended specific rate of duty, would have been only $141,648.44, or about $70,000 per annum, and that $70,000 in favor of the revenue. Who do you suppose signed this memorial ? The first signature is that of Phelps, Dodge & Co., of New York. Mr. Dawes —But you said that we passed through here a bill making the duty one cent a pound, on their petition. Now look at tlie bill, and it will show that the duty, as fixed by this House, was one cent and a quarter per pound, which is an increase over the present tariff; and that is their com¬ plaint, which they have carried to the other end of the Capitol. Mr. Butler, of Massachusetts.—And have got it down there, I believe, to one and one tenth of a cent. Mr. Dawes.— No matter what they have got it down to there. Your charge was against the present Committee on Ways and Means. Mr. Butler, of Massachusetts.—They came here and asked for a duty of one cent per pound; and you put it upon tin plates, wooden boxes, iron packages, and all at one and a quarter. Is not that so ? Mr. Dawes. —.And does not that make more for them to pay ? Mr. Butler, of Massachusetts.—Does it ? Mr. Dawes.— Does it not make more to put the duty on the boxes as well as the tin ? 14 210 CONGRESS AND PHELPS, DODGE & CO. Mr. Bdtlek, of Massachusetts.—No, sir. There is a specific dutj now on the packages, which is not to be collected when you put on the duty by the pound. But, however that may be, one cent and a quarter per pound is not two c< nts and a half. Mr. Dawes.— Your charge Avas against the Committee on Ways and Means. Will you please stick to, that ? Mr. Butler, of Massachusetts.—No, sir; I have got through with them for the present. Mr. Dawes. —Because you are answered. Mr. Butler, of Massachusetts.—The facts before us are all before the country. Mr. Dawes —You ought to leave your statements as they are then. Mr. Butler, of Massachusetts.—Now, having disposed of that difference of a quarter of a cent a pound bet-ween me and the learned Chairman of the Committee on Ways and ]\feans (Mr. Dances), I find I must hasten on. statements of general butler refuted. The utter and entire falsity of the above statements of Gen. Butler was, almost immediately after the publication of his speech, taken up and ex¬ posed by the N. Y. World in the following article, entitled BUTLER’S ATTACK ON SECRETARY FESSENDEN. The Congressional Record lias reached us containing a verhatim report of General But¬ ler’s speech, although most of the members upon whom his la.sh fell, Roberts, Tremain and Poster, withold their remarks for revision, doubtless in order to season them with esjorii d'escalier, a sauce which Butler never serves himself up in. There are several blunders in the speech which disgrace General Butler and discredit the House of Representatives, which among its 300 members supplied not one political economist capable of correcting him on the spot. One blunder was in stating the history of Lead Statuary, which he made a chief item in his indictment of Mr. James, of Liverpool, and Mr. William E. Dodge, of New York. The whole story of Lead Statuary, one of the most amusing chapters in economic history, was recited a few weeks ago for the readers of the World by David A. Wells, one of our fore¬ most writers on this class of subjects. It confutes Butler at every point. The General IS a subscriber to the World and ought to have neglected no such means of grace and light. Says Mr. Wells, in our issue of May 11: “The firm of Phelps, Dodge & Co. was not at the time of the occurrence of these events in ex¬ istence ; and the old firm that preceded them, namely that of Phelps & Peck, although large im¬ porters of metals, were not concerned in this matter of the leaden images.” The General might hvae been just as amus¬ ing over the stripped roofs of Old England, the musket bullets, the leaden weights, the deep sea sounding leads, and the clock weights, as he was over the bunged eye of the leaden goddess of liberty and the broken nose of General George Washington in Mr. Duncan’s back yard, but he was “cursed with the curse of inaccuracy.” Another charge show.? General Butler’s gross ignorance of our tariff legislation, in a House of Representatives which contained not one member to correct him. It relates to the same firm, which is his heie noir, but bears hardest upon the late Secretary Fes¬ senden, who is accused of a department de¬ cision which defrauded the country of more than $32,000,000 duties. The charge we quote; AN EXTRAORDINARY HISTORY. 211 cents per pound. It was the intention of Congress to increase it; therefore they enacted that ‘ on tin plates and iron galvanized or coated,’ &c., there should he a duty of 3‘4 cents a pound. But Mr. William E. Dodge went to the Treasury Depart¬ ment of the United States, in his own person, as I have the means of showing, and there advocated a reading of that law which was sanctioned neither by the letter, text, spirit, nor meaning, nor by the true and just thought of any patriot. He procured an opinion from the Treasury Department by which the comma was construed to be removed after the word ‘plates’ and inserted after the word ‘iron,’ so as to make it read ; ■On tin plates and iron, galvanized or coated with any metal by electric batteries or otherwise, 2>4 cents a pound.’ So that, with that construction, the duty had not been raised on tin plates at all, but only on ‘ galvanized ’ tin plates. Who ever heard of a gal¬ vanized tin plate ? None was ever imported, I venture to say, or ever will be. The consequence was that all the tin plates imported into the United States, of which Phelps, Dodge & Co. were by far the largest importers, came in at 25 per cent. ad valorem instead of 2,^i cents a pound, which was a very large increase of duty. Whether that average value is precisely correct or not is of no consequence, because it would not substantially vary the figures, and that shows that in 1870-71, and every other year from 1864 until the change of the tariff on June 6, 1872, would make a difference in favor of Phelps, Dodge & Co. and against the United State^^, by this change of the law at the personal solicitation of William E. Dodge with the Treasury officers of the United States, of 12,367,000, and over §4,000,000 annually, taking the whole importation of the United States during that eight years.” General Butler’s ignorance is monstrotts and inexcusable. He is wrong at every point, yet might have corrected himself by looking in the Congressional Globe. Itven if he knew nothing of the history of tariffs, he should have read the liistory of the act vviiicli he accuses Secretary Fessenden of miscon¬ struing, and that would have opened his eyes. So small a precaution agiiinst in¬ accuracy this foremost Republican leauer did not take. In the first place his argument implies that on tin plates it was the purpose of Congress to more than double the duty by tire Act of June 30, 1864. There is not the sliglitest foundation for such an assumption in tlie de¬ bates of the House or the Senate, and no such charge could have been dreamed of and proposed by the Ways and Means or Finance Committee without sharp debate in both houses. Was there nobody to tell Mr. Butler that, and to show him that twenty-two sliil- lihgs for a box of 125 lbs. tin is a fraction over 4|-cents per pound first cost'for tin plates, and that 2^ cents per lb. duty levied thereon, “ in lieu of the duties heretofore im¬ posed by law,” if applied to tin plates, whicli, in fact, arc not mentioned in the Act, would therefore have lieqti an increase from twenty- live per cent, duty to fifty-nine per cent, duty'? But tlie al)surdity of Congress increasing the duty on tin plates more than 100 per cent, at a sitting does not dawn on General Butler. Ill the second place, whether tin plates are taxed twenty-live per cent, or fift3--nine per cent., or whetlicr bunting i,s taxed thirty per cent, or one hundred and eight per cent., the consumer equally has to pay the duties. Of course less is consumed at a higher than a lower duty, and in this way does tlie importer find liis account in the lower duty. In this very case liad tlie duty on tin plates been raised suddeDty from twenty-five per cent, to fifty-nine ] er cent., according to General But¬ ler’s own showing, a firm importing some 600,000 boxes of tin plates aiiniialty, and ac¬ cording to tlie rule of trade no doubt carrying- over 150,000 lioxes hi stock, would on tlicir stock have made fully $300,000 in the differ¬ ence of duties, in the same way in which the wine importers hoped to profit iiy the increase of duty on wine; and had Mr. Dodge solicited the Secretary of the Treasury to rule the 24 cents duty instead of the twenty-five per cent, we should have been Justified in sus¬ pecting ifr. Dodge of trying to benefit himself at the expense of the consumers of tin. But, more conclusive still, the Congres¬ sional Globe, June 16, 1864, p. 3,011, shows that Secretary Fessenden’s reading of the law was precisely the correct reading, sanctioned ” by tlie letter, text, spirit and meaning,’’ and what IS more, that Senator Fessenden was at the time of the debates on the bill the Chair¬ man of the Finance Committee of the Senate, and himself moved and carried the very amendment which he afterwards interpreted as Secretary of the Treasury in the sense that Mr. Butler finds not sanctioned \>j the “ true and just thought of any patriot.” The clause as it came from the House read thus (as it may be reconstructed from the amendments following Ijelow): “ On galvanized tin plates, galvanized iron, or iron coated with any metal by electric batteries, 24 cents per pound.” [From the Globe.] “ The next amendment of the Committee was in section three, line forty-nine, after the word ‘ on,’ to strike out the word ‘galvanized;’ after the word ‘plates ’ to strike out the words ‘ galvanized iron :’ after the word ‘ iron ’ to insert the words ‘ galvan¬ ized or ;’ and in lino fifty, after the word ‘ batteries ’ to insert ‘ or otherwise ;’ so that the clause will ‘On tin plates, or iron galvanized or coated with any metal by electric batteries or otherwise, 3] cents per pound.’ The amendment was agreed to. 212 CONGKESS AND PHELPS, DODGE & CO. Mr Fes-ienden—I will move to amend that clause further in the forty-ninth line, by striking out the word ‘or’ and inserting* and;’ eo as to read ‘ tin plates and iron galvanized.’ The amendment was agreed to.” The Globe record thus shows that galvan¬ ized tin plates were alone referred to, and that although the comma after ‘‘ plates ’■ was by an error left in the first amended clause, as given in the record, and also in the law, the comma was omitted in Senator Fessenden’s final amendment in the record, and nobody in the Senate or out of it ever thought of doub¬ ling the duty on tin plates, or doing anything but make galvanized tin and iron plates pay a )f the Brooklyn papers to take Sanborn’s side of this question. I do not sup- pose he knew anything about paying money to the man Hughes, ivho stole my letter to aid in securing Sanborn’s acquittal in the United States Court at Brook¬ lyn. Ido not suppose he knows anything about these jpeoqole, as well as almost AN EXTRAORDINARY HISTORY. 231 every other man engaged in this infamous transaction. But the facts are that in one way or another they all had some sort of a connection with him. Myletlerwas stolen, not picked up in the street as the gentleman says, and given to the gentleman from Massachusetts. 1 expected my letters would be stolen when I got into this controversy with the gentleman, and I was careful about what I wrote. There is nothing in any letter I have written which calls for explanation. And further, Mr. Speaker, this House, for the protection of its members, had to pass a resolution to keep the gentleman from Massachusetts from stealing telegrams. Now, Mr. Speaker, I have but little more to say about this matter. This investigation was brought on by the friends of, and by the gentleman from Massachusetts himself. No other person was to blame. They brought it on, and out of the mouths of their own witnesses this testimony came. We forced it, it is true. \Ve forced Mr. Sanborn to testify. We discovered these frauds which are fully sot forth in our report, and which have nut been, and cannot be answered by the gentleman from Massachusetts to¬ night. The bill repealing the law was passed by a unanimous vote of this House, the gentleman himself being present. Mr. NTblack— I desire to call the attention of the gentleman from Ohio, before he concludes, to the manner in which Mr. Sanborn procured infor¬ mation from Europe in regard to income taxes and other claims for taxes. Mr. Foster— What is the gentleman’s point? Mr. Nibi.ack. —I desire to call the attention of the gentleman from Ohio to the manner in which Mr. Sanborn procured information from Europe as to certain taxes that the gentleman from Massachusetts (Mr. Butler; claimed that Mr. Sanborn had information of, which he proposed to collect if allowed to do so. 1 desire also to call his , attention to the manner in which Mr. Sanborn got information as to certain whiskey taxes, also as to certain railroads. Mr. Foster.— We have gone over all these things, Air. Speaker, in our report and in our speeches. But it may be well on this occasion to call the attention of the House and the country to them again. Now, this railroad case was a marvellous thing. Sanborn made marvel¬ lous use of railroad guides; that oath of his is complimented by the gentle¬ man to-night. The acquaintance of Mr. Sanborn with the gentleman from Massachusetts is long, lived. It dates away back to old Fortress Monroe times. This man Sanborn was engaged in business with Mr. Hildreth (I do not care to tell here the relationship between Hildreth and the gentle man) dowui in the neighborhood of Portress Monroe, selling goods to the I'ebels. Hildreth and Sanborn made a good deal of money at that time. I am told that Sanborn was emplo 3 '’ed as agent of the Adams Express Com- 232 CONGRESS AND PHELPS, DODGE & CO. pany South and played rebel. The company wanted a go-between who would get through the command at Fortress Monroe, where the gentleman from Massachusetts then commanded, and Mr. Sanborn was employed. What we were told as to that is not published, and I will not further allude to it. I do not think it worth while, Mr. Speaker, to detain the House at any greater length on the matter of the Sanborn contracts, and I would not have said a word on this subject but for the personal attack the gentleman from Massachusetts has made upon me. Mr. Butler, of Massachusetts.—I have made no attack upon you. Mr. Foster. —I do know from reputalde sources that men have been in my district—under whose auspices I do not know—looking into the mat¬ ter of my election and trying to find out something about me, for what purpose I am not advised. But 1 am advised, and I will state it to the House, though the authority may not be very good, that the secret service fund has been used to send men to my district—I mean the secret service in charge of Colonel Whiteley, another one of the gentleman’s friends—to look for a fifty cent counterfeit plate. That was the ostensible purpose of his visit to my district. The real purpose was to hunt up something for the gentleman from Massachusetts (Mr. Butler) to use against me. I do not supj)Ose the gentleman from Massachusetts knows anything about it. T do not suppose he knoivs about anybody being sent there. Still they have been there, and were sent by his friends. But, Mr. Speaker, it seemed to me, under this provocation, that I had a right to say “old Cock-eye” just once in a letter to a friend. Mr. Butler, of Massachusetts.—That is your stock in trade. Mr. Foster. —It is a good stock, is it not? Mr. Butler, of Massachusetts.—It is all you have got. Mr. Foster. —I do not know that I shall say anything further. I only rose to give a history of the connection of the Ways and Means Committee with the Sanborn case, and to repel the gentleman’s attack. But I do want to make a further remark, and that is about the case of Phelps, Dodge & Co. A more unprovoked, unwarranted, outrageous assault upon reputable gentlemen I have never heard of, and I believe was never heard by the House or the countiy before. What Phelps, Dodge & Co. may have done forty years ago I do not know. I am assured that that statuary business occurred before either of the gentlemen now composing this firm were partners in the house. What Phelps, Dodge & Co. did then I know not. But assuming that what has been said about these things is true, it has nothing to do with this case of last year. What is that case? Why, Mr. Speaker, Phelps, Dodge & Co. in the course of five years imported $40,QUO,- AN EXTRAORDINARY HISTORY. 233 000 wortli, or thereabouts, of tin. They paid $5,000,000 of duty, and in tliattime they over valued their goods some $300,000. The total loss to the Government charged against them as accruing to the revenue of the country is $1,640. Did they intend to defraud the Government, or was it an error ? Now, Mr. Speaker, when we look at such cases as this we ought to take into account the surroundings. Is there any man living who sup¬ poses that Phelps, Dodge & Co. would rob the country of $1,640 ? Mr. Butler, of Massachusetts. —No. Mr. Foster. —That is all that is charged against them. Does any man believe that they would rob the country of that sum ? Mr. Butler, of Massachusetts.—No. Mr. Foster. —That was the aggregate for five years, giving an average of about $300 a year. We must judge a case of this kind by its sur¬ roundings. If a mendicant or ordinary vagabond should obtain $1,000 that he could not account for, we would call him a thief. But when you take into account the standing of Phelps, Dodge & Co. and their vast busi¬ ness, we must admit that they were simply errors; and if errors amounting to $300 a year should creep into a business of $8,000,000 a year, is this the great outrage, is this the great wrong to the Government that the gentleman argues should ruin forever the integrity of a leading firm like Messrs. Phelps, Dodge & Co. ? Mr. Speaker, I say shame on the Government, and shame on the men in Congress or out of it, who plead for such so-called justice ,or equity as against such an honorable firm. Now, Mr. Speaker, if I should invite the gentleman from Massachusetts to my house to dine, and the next day should find a spoon of mine in his pocket, nobody would believe that he had stolen it, but if found in the pockets of a vagabond we would know tliat he was the thief. The trouble is, Mr. Speaker, the gentleman from Massachusetts (Mr. Butler) has in his pockets a large fee paid to him out of this robbery as counsel for Jayne, and it is getting too hot to hold it there comfortably. This accounts for the writhings, and contortions, and abuse of the name of Christian by the gentleman to-night. Mr. Speaker, I give it as my deliberate opinion, and the country believe, and I believe, and the Committee on Ways and Means unanimously be¬ lieve, this Congress believe that Phelps, Dodge & Co. were deliberately robbed; and I believe, furthermore, that the country never will do justice hythem until they pay them back the money thus extorted from them. Without attempting to elaborate the question, that is my deliberate and honest conviction of that case. 234 CONGRESS AND PHELPS, DODGE & CO. Mr. Butler, of Massachusetts—Then whj not bring in a bill to repay them ? Mr. Foster.— The time has not come for that yet. I have now said all I desire to say upon this subject. SPEECH OF HON. HENPtY L. DAWES. Mr. Speaker, I began this investigation in reference to the effect of giving half of the proceeds of uncollected taxes and one half of the fines and penalties to men who would turn their backs upon other employ¬ ments at fixed salaries to engage in this pursuit. I followed it up as well as I could in the last Congress. And upon the very second day of this session, through the aid of this House, I called upon the Treas¬ ury Department to disclose what my colleague (Mr. Butler) has shown here to-night to be the effect on honest men of this system, which has been enforced in this country for the last fifty years, upon the collection of the revenue ; an effect which, I agree with him, has been continually growing worse and worse, until with him I believe that under all the force and effect of this system of moieties there has come into the Treasury of this kind of taxes but about two thirds. Was it not time, then, was it not a matter that commended itself to the Committee on Ways and Means, to look about and see whether there could not be some improvement upon a system of collecting and enforcing revenues which my colleague describes in this way : that the less honesty a man has who is engaged in enforcing the revenue laws the better ; that efficiency, according to his idea, and succes.s, according to his idea, are incompatible with honesty in the public service ; and therefore you must have agreed to the old adage, “ thieves against thieves and rogues to hunt rogues?” Sir, it did occur to me as a member of the Committee on Ways and Means, and I accordingly set on foot the investigation which resulted in a unanimous vote of this House that that system shall Continue no longer ; it did occur to me that better than imposing new taxes would be an im¬ provement in the system by which the other third of those taxes already imposed should flow into the treasury of theCnited States, rather than into the pockets of those men of whom my colleague says that the chief com¬ mendation they have for their services is that they have no honesty to embarrass or blunt them in their ways and means of detecting rogues. Sir, no effort of my colleague or any other gentleman on this side of the House will enable him or them to enforce upon the republican party as a part of its creed or policy any such doctrine as that. Honesty and effici¬ ency in the public service, properly rewarded by fixed and fair salaries and AN EXTRAORDINARY HISTORY. 235 compensation, I put against my colleague’s policy and scheme, coming down though it may from the years that are passed, bringing down though it does no other fruit than inordinate fortunes in the pockets of informers and prosecutors, while the deficiencies in the collection of the revenue go on increasing year after year until the startling announcement is made upon this floor, by the chief apostle and defender of it all, that the result and fruit of it is that under this great system not more than two thirds can be got into the Treasury ! Sir, some other purpose, some other method, some other idea worthy of effort on our part should stimulate us to action and investigation, if the fruit of it all is going to be such a sorry and sad picture as that which my colleague himself spreads out here as the fruit of the system. Sir, it was in this manner that these investigations originated in the Com¬ mittee on Ways and Means. My colleague had much to say about the petty pursuits of the Committee on Ways and Means. He has criticised and complained of the action of the Committee on Ways and Means in pursuing this investigation, and has spread before the House his troubles with one or two members of the committee, and has sought to impugn the motives of the Committee on Ways and Means in their recommendation to this House and in their action, which com¬ manded the unanimous vote of the House. I participate in none of that controversy. Having approached this matter long before my colleague came into it, I have pursued the even tenor of my way as Chairman of the Committee, directing as well as I could the examination, for the purpose of demonstrat¬ ing what was wrung from the very officials in the administration of public affairs here at Washington with a view to the repeal of that system. Even the last Secretary of the Treasury, when before the Committee on Ways and Means, declared it his conviction that this system ought to be aban¬ doned. Even Jayne declared before the committee that the system was unwise, and that it ought not to be continued. No man, no official, has appeared before the committee or has made any communication to the House who has not sustained this view. The late Secretary of the Trea¬ sury (Mr. Boutwell) not only voted to repeal all of these law’'S, but he de¬ clared in his place in the Senate but a few days ago that this same Mr. William E. Dodge, who was put in the front here by my colleague, was an lionest man. Sir, how much cooperation in this work of investigation have we received at the hands of my colleague? Although he had notice from tlie committee whenever any testimony was introduced there with which Ids name was connected, lie failed to present himself there to be heard 236 CONGRESS AND PHELPS, DODGE & CO. upon this question, as he has failed up to this hour to give the House the benefit of his views upon it. He has no cause of complaint against the Committee on Ways and Means for the manner in which they have pursued this investigation, so far as he is personally concerned. He had personal notice every time any testimony appeared before that com¬ mittee touching him, so that he might have the opportunity to appear there. No man has cause to complain of the action of the committee. We invited the men who were receiving these moieties to appear ; we invited the officials in New York, and Boston, and Philadelphia, who were receiving these moieties; but they could not find time or oppor¬ tunity to appear here and give us the benefit of their counsel. And yet, Mr. Speaker, I saw them around the galleries of this Hou.se and at the other end of the Capitol when the question was pending whether these moieties should be cut off entirely. I saw them in the lobbies at this and the other end of the Capitol. There was opportunity and time enough for them to come to Washington to give the aid of their advice to legislators by their votes upon that measure of repeal, but up to this hour the Committee on Ways and Means, so far as they are concerned and so far as my colleague is concerned, have been compelled to grope in the dark, and gather up by ihe best means they could the infor¬ mation upon this subject which could be wrung from unwilling witnesses. Sir, whatever others may say of the effect upon the party, and the damage to the republican party that a republican Committee on Ways and Means has inflicted by these proceedings, I have this to say, that al¬ though I have served on many committees in Congress, on none of them do I look back to the work accomplished with more pride and satisfaction than upon the work that has been accomplished by the present Committee on Ways and Means, by which they have wiped out of the statute book forever that blemish upon the administration which hitherto has prevailed; a provision that in order to have an efficient prosecutor you must have a dishonest man, and that in order that your officers shall pursue with energy the calling of enforcing the revenue, they must be stimulated by one half of all the fruits they can gather from infractions on it. Sir, I wish to detain the House no longer with comments upon this work of the Committee on Ways and Means. I have no personal controversy, as I have said, with my colleague. There is nothing that has transpired in that committee, over which by your appointment, sir, I have sat as chair¬ man during this investigation, of which any gentleman in this House has any just cause to complain. The committee have submitted to this House and to the other the results of their work. The unanimous approval of both branches of Congress is sufficient for them. If I wanted any other AN EXTRAOEDINARY HISTORY. 237 proof of tlie force and power of tlie pulrlic commendation of this act, I would point to tlie effort of my colleague here to-night to baffle this current and to struggle against this condemnation of a system which I am sorry to see be has espoused, and which he feels bound to defend. SPEECH OF HON. LYMAN TREMAIN, OF NEW YORK. Mr. Treroain next obtained the floor, and addressed the House as fol¬ lows : Mr.Speaker, understanding that there is no other member of the Commit¬ tee on Ways and Means who desires to address the House to-night, it seems to me that I cannot, consistently with the duf}^ I owe to an honored firm of constituents, permit this House to adjourn without raising my voice to repel the most extraordinary and unjustifiable aspersions that have been uttered here to-oight upon the floor of the American Congress. Phelps, Dodge & Co. are my constituents. For a quarter of a century that firm has occupied a position at the head of the mercantile community of the great commercial emporium, with no stigma or stain resting upon their honor or upon their good name. To-night the gentleman from Massachusetts (Mr. Butler) has constituted himself their accuser, has appeared as witness against them, and has acted as their judge. No charges are served upon that firm to appear in this hall; no counsel has a right to appear here to defend them. Slanders are uttered here for which a man would be held personally responsible before the tribunals of his country if uttered where he would be deprived of the immunity that shields him here. He is here protected by the broad mgis of the Constitution, which declares that no man shall be held responsible for words uttered in debate upon the floor of this House. And yet what have we heard here to-night ? For the purpose of de¬ fending two dead and'buried institutions, and in pronouncing an anathema upon the action of the Committee on Ways and Means of this House for their action in condemning and hurling into that infamy from which no power on earth can lift them—the rotten Jayne moiety system, and the in- fer;ial Sanboi’n confract—the gentleman from Massachusetts has held up the firm of Phelps, Dodge & Co. as swindling merchants, as perjured vil¬ lains, as men who have been engaged for years in attempting to defraud the revenues of this Government, and as men who ought to be held up be¬ fore this crowded audience, upon an accusation which shall go upon the wings of the lightning from one end to the other of this Republic, as men who have cheated the community in which they live, in obtaining that reputation and that honor which, forsooth, are to be destroyed before the 238 COjSTGEESS and PHELPS, DODGE & CO. keener criticisms, the sharper instincts, and the wiser sagacity of the hero of the Sanborn contract and the Jayne moiety system. No man can deny the power of the gentleman from Essex. But he has not the power to raise the dead ; and until he has that power he can never reverse the judgment of this House and of this country that the Sanborn contract and the manner of its performance constitute the most disgrace¬ ful and disgusting performance that has ever brought discredit upon the American name. With all his power to please, and to call down the plaudits of the galleries, the gentleman from Massachusetts can never roll back the popular tide or reverse that judgment which is the judgment of the American people, that the scenes which have transpired in New York, of which Phelps, Dodge & Co. were the victims, are as deserving of the condemnation of an honest and a justice loving community as were the diabolical transactions of the inquisition and of the star chamber. Sir, there is in all this broad land but one man who has the boldness to stand up against the judgment of an honest people, against the unanimous expression of this House, against the conscience and the honest opinions of a thoughtful and a truth loving community in regard to these transactions. The time for making the defence was when the gentleman from Massachu¬ setts was invited and he did not come. He was sick ! He will be sicker yet before he gets through with his connection with the Sanborn and the Jayne infamies. No man is able to stand up before the American people and sustain these atrocious proceedings. The gentleman has said that Phelps, Dodge & Co. were guilty of frauds in regard to statuary. Sir, a falser accusation was never made. I know well the history of that stale slander, wdiich has been picked up from the gutters and peddled in your cloak room It is false in every part of it. Let me say, in the first place, that in the firm of Phelps, Dodge & Co. the name of Phelps is retained although the man who bore it has been dead for many years. Under a statute of New York the name of a deceased member of a firm and of the old firm itself may, under certain conditions, be continued by those who succeed to the business. Of course it would never be continued except where it has acquired credit and standing by probity and integrity, and is a name that ought to be perpetuated. Sir, it was nearly fifty years ago that an Act of Congress was passed in¬ creasing the duty upon lead in pigs and bars from one to three cents per pound. What was the occasion of the increase ? Lead mines had been discovered at G-alena, Illinois, and according to the system of that day, of protecting American productions and American industry, this duty was increased 200 per cent. There had before that time grown up in the cities of Baltimore, Philadelphia, New York and Boston large manufactur- AN EXTRAORDINARY HISTORY. 239 ing establishinents, concerned in the manufacture of white lead, in one of which the old firm of i helps & Peck (the name of the dead Phelps being perpetuated in the firm) were interested. When that statute was passed, somewhere from 1820 to 1824—1 do not remember the exact year—these large establishments found that their business was failing ; and they looked around to see in what manner they could reimburse themselves for the losses they sustained by reason of the legislation of Congress. They found that this statute, which was under the old system of duties, had left upon old lead, so called, an ad valorem duty of 15 per cent. I never heard that there was anything wrong in acting precisely accord¬ ing to law. These manufacturing establishments consequently concluded to import old lead. I will show you b}^ and by that, as to the statuary story, even the firm of Phelps & Peck had no more connection with it than the gentleman from Essex. There was a great demand for old lead. The consequence was that in the old establishments in England the roofs that were made Of old lead were taken off, new' lead put on, and the old lead imported to this country. Merchants and the officers of the customs sub¬ mitted the question to the Treasury Department, wdiere it was decided, properly and legally, that no more than 15 per cent, could be collected on old lead under the statute, although that lead was afterward used for the ordinary purposes for wTiich pig lead and bar lead would be used. Congress, when the next session came, proceeded to cure that omission in the old law. They did so. Then these gentlemen looked around, and they found that there was still another provision in the tariff laws under which musket balls and bullets were admitted at a duty of 15 per cent, ad valorem. There was then a wonderful demand for bullets and musket balls, old and new. They w'ere brought over in immense numbers. Again the revenue officers submitted the question to the Government, and the Treasury officials decided that the importation of bullets and balls at 15 per cent. a(i mZorem was according to law; that the Government could not help itself. At the next session another law was passed patching up that hole in the tariff. But afterward it was discovered that there was still another item left with a duty of only 15 i^er cent, ad valorem —and that was leaden weights and leads used by sailors. There was then a wonderful demand all at once for weights and leads. The old weights Were found to be very defective. Every shipper and every sailor wanted S' new set of leads. A large number were imported. In the meantime a suit was brought in New York by Mr. Price, the district attorney, but he Was ignominiously beaten; for the Judge, upon the first hearing of the esse, dismissed the complaint on the part of the Government. Then this defect in the law was supplied. But there was still left the old statute 240 CONGRESS AND PHELPS, DODGE A CO. which said that statuary and busts should be admitted either free of duty or at a small duty. Well, there never was such a demand for busts since the time when my colleague (Mr. Cox) got his bust made when he and 1 were in Florence. Why, sir, they had statues of all the great men of ancient and modern times. They had Moses and Aaron, and Benjamin and Joshua, and Cffisar and Napoleon, and Wellington and Washington, and Jefferson, and everybody else, run into statues on the other side. Some of them came over, to be sure, as has been said, with an eye knocked out, or a nose battered, or fingers dislocated ; still you could recognize them. They came in great quantities. A suit was undertaken to be brought in New York ; but Mr. Price had had sufficient experience in that line, and he thought he would not venture upon the experiment. They went up to Boston and they sued an honorable old merchant, who was one of these white lead manufacturers, for importing these leaden statues which, according to the language of the gentleman from Massachu.'^etts, were transferred to the melting pots. They brought suit against him. What did the old mer¬ chant do ? His name I do not remember—perhaps some one from Massa¬ chusetts here will. A Member.— His name was Leavitt. Mr. Tremain.— ^Yes; I think his name was Leavitt. What did he do? No doubt if the lawyer from Essex had been there he would have run for his office if the Government officer had not got there ahead of him. As he was not there they had to take a man of less importance, and they em¬ ployed a man you may have heard of by the name of Daniel Webster. Mr. Webster went into court to defend his old friend, an old Boston merchant. They proved he imported these old leaden statues, and they probably could have satisfied the jury, if that had been material, that he meant to melt them as soon as he had got them into his store. What did Mr. Webster do ? Mr. Webster said to the Judge, “ I ask you to instruct the jury that the only question in this case is a question of fact, whether the articles seized by the Government were or were not statuary.” It was nqt a ques¬ tion of law, but a question of fact for the jury. The Judge, as he was bound to do, responded to that request by charging the jury in accordance with the request, and the jury without leaving their seats gave a verdict in favor of the defendant that he had violated no law. And that is all there is, Mr. Speaker, of this stale old statuary story, dug up from the gutters to sustain the rotten cause of the Sanborn contract, and of the Jayne moiety system, and to bring discredit upon the name of Phelps, Dodge & Co. Now, whether these transactions by the importers were moral or im¬ moral is a question I am not called upon to determine. It is enough, how- AN EXTNAOKDINARY HISTORY. 241 ever, to say in this connection that at that time no member of the present firm of Plielps, Dodge & Co. had any connection with it. It is enough to say that the firm which was then in existence, and the predecessor of this firm, was the old firm of Phelps & Peck ; that the firm of Phelps & Peck never had anything to do with the importing of leaden statuary and busts, and that the story, even as to them, is made out of the whole cloth, thrown in here when there was no man supposed to be familiar with the facts to de¬ fend the firm of Phelps, Dodge & Co. against a charge entirely in harmony with the general character of the transactions which the Committee on Ways and Means have properly sought to reform, and this House has by its unanimous judgment condemned. Again, the gentleman tells us Mr. Dodge claimed a particular interpreta¬ tion of the statute in regard to the amount of duties which should be col¬ lected upon tin plates. I am informed by an honored merchant from Bos¬ ton on the floor of this House, since that charge was made—for I knew noth¬ ing of it, and this is no time to be called on to defend an absent man against a charge made under the privileges of the House—I am informed by that honored merchant, who is familiar with the whole transaction, that, in regard to that, the Treasury Department fully sustained the claim which was made by Mr. Dodge. Allusion has been made to the action of the Committee, on Ways and. Means in recommending the tariff bill which proposed a specific duty upon tin, and boxesMn which it was contained. So far from being a cause off censure against the firm of Phelps, Dodge & Co., that transaction is evi¬ dence of their strong desire to conform to the law, and to guard against, the defects and abuses existing under the law wdiich had been the means of robbing them of $211,000. Look at it for a moment. What was the old law which is now condemned ? If a man imported tin manufactured in the interior of England—and it is mostly manufac¬ tured in Wales—if he, by mistake, omits to put into the invoice the expense of cartage, or of telegrams, or of expressage, or of boxes, or of any other item whatever, under that old law, which finds its vindicator here, not only Was the article forfeited, but the whole invoice in which that article was contained was forfeited. May, more; it was not necessary to show that there was any intention, to defraud the Government. The Supreme Court decided that when the word “fraudulently” was omitted it was only necessary to show that the invoice was entered at less than the actual cost, and that it became a mat¬ ter of law in such a case to instruct the jury that the whole invoice was. forfeited. It was under such an odious system that Phelps, Dodge & Co.. Were sought to be charged with $211,000 of forfeiture. Now what was the 16 242 CONGEESS AND PHELPS, DODGE & CO. amount of duty of which it was charged they defrauded the Government? Why, sir, but 11,600. Here, sir, is a firm which had paid more than fifty million dollars into the Treasury; while the Ways and Means Committee state it has been proved before them that they overpaid to the Government on other articles three or four thousand dollars of duty. Yet these men were to be held responsible in the large amount I have named for these trifling inaccuracies in their invoices. It was to guard against that that Phelps, Dodge & Co-, and all the other tin merchants and importers of the country, presented the memorial to Congress from which the gentleman from Massachusetts only read the first name, that of Phelps, Dodge & Co., and that memorial asked that the tariff be changed. They were willing to have put on a duty which would give the Government greater revenue than they have derived from that source for the last three years. They thought one cent on the tin and boxes was enough. The Committee of this House put it at one and a quarter cents. That is what there is about that. Now, who is Mr. Dodge? He is a man who has been a member of this House, the peer of any gentleman upon this floor, the man who, after all these charges were made against him, was elected, by the unanimous vote of the merchants of New York, President of the Chamber of Commerce in that great city, a position that he occupies to-day. Can a man acquire such a reputation and so enjoy the confidence of his fellow merchants if he is that rotten, and corrupt, and swindling merchant that he has been held up before this House to be by the gentleman from Massachusetts? Shall . his good character go for nothing ? Can long years of integrity and probity go for nothing ? Shall his reputation for Christianity and piet}^ evidenced by the fruits that are welcomed everywhere by the Christian community as springing from a good heart, go for nothing ? Is such a man to be ridiculed before your galleries as a man that preaches in the day . time and prays at night? Is the American Congress to listen to harangues of that character ? Then the gentleman, after haranguing the House for two hours, now seeks to stifle the voice of the representative from New York, who has no other interest at all in this firm except simply to have justice done. It : seems to me that this whole debate to-night has been in the nature of a funeral oration by the gentleman from Massachusetts over the dead ; the dead and the corrupt ; the dead and the condemned ; the dead and the infamous. And if the gentleman from Massachusetts thinks that i he is to be held as the savior of the republican party from the Ways and Means Committee, to whose eleven members he so triumphantly I bids defiance, he will find that he is laboring under an egregious I mistake. AN EXTRAORDINAKY HISTORY. 243 Tlic people are quick to discover an honest desire on the part of the Ways and Means Committee and of this House to correct abuses and re¬ form the existing laws. This House, by both its parties, to their honor be it said, without regard to political considerations, have condemned these laws and wiped them out of existence, and they will be heard of I trust no more forever. There was another subject I desired to speak on, but if the House wdll give me permission to print my remarks, I will not detain it longer this evening. Mr. Butler, of Massachusetts.—If there be anything personal in them you cannot. Mr. Treu.vix. —I will tell the gentleman that I intend my remarks to re¬ late to the extraordinary debate, the extraordinary personalities, the extra¬ ordinary course that was taken in the closing hours of the debate upon the Geneva award bill, a bill that has passed this House. But I rejoice for the honor of ray country that the triumph that was won here is destined, I believe, to be short lived and to yield no fruits. It requires not merely the consent of this House, but the consent of the Senate and the Presi¬ dent, before a raid can be successfully made upon the public Treasury, whereby four millions of honest property can be confiscated and ten millions can be taken and given to a class of men who have no claims in law or equity upon them. That question is wholly postponed and to come before this House at its next session. I desire to notice some extraordinary aspersions, some extraordinary arguments, some extraordinar}^ personal remarks that were made during that discussion ; and I think it will be quite as proper, as that subject is still alive, to speak to it as to spend two hours in talking about dead issues. My speech would relate to the Geneva award, and I ask unanimous consent to print my remarks upon that subject. Mr. Butler, of Massachusetts.—You shall not have mine, sir. Mr. Tremain.— Amen. You will hear from me at Philippi. We will meet there. Mr. Tremain. —Mr. Speaker, it is difficult to tell which most to admire, the high toned sense of honor and morality of the gentleman from Massa¬ chusetts, who sees so much fraud in the conduct of men who have been vindicated and sustained by the action of a court and jury, or his logic in finding in my argument a sufficient ground to condemn Phelps, Dodge & Co. Sir, I have stated distinctly, and the gentleman knows it well, that Phelps & Peck, who were the firm in existence when the statuary was im¬ ported, some forty or fifty years ago, had no agency whatever in its importation. They had no more connection with it than had the gentle- 244 CONGRESS AND PHELPS, DODGE & CO. man from Massacliupettp, and yet, forsooth, he finds in my remarks sufficient to sustain his cliarges against Phelps, Dodge & Co., and proceeds to indulge in a general tirade of abuse against the merchants of this country—merchants whosp names are synonyms for honor, for patriotism, and for integrity, and who would not thank me for vindicating them against the frivolous and unfounded aspersions of the gentleman from Massachusetts. Again, he asks wliy did I denounce Jayne? I denounced the system with which Jayne and Sanborn tvere associated. I exonerate the officers of the law, for they are honorable officials in the City of New York, vdio, no doubt, did what honorable men should have done in executing the law. I would not be understood as criticising in any manner the action of the revenue officers of New York, for all of whom 1 entertain the highest re¬ spect and esteem. But it was the system I denounced, and I rejoice that it has been condemned and forever exploded. The debate here ended, and the House at a late hour adjourned ; and during the remaining four days of the session no further allusion to the subject of moieties, seizures or Treasury contracts and irregularities was made in either branch of Congress. The firm of Phelps, Dodge & Co., however, in view of the specific and unqualified charges renewedly and most publicly made against them by General Butler in his speech, and notwithstanding the immediate answer to and refutation of the same by Messrs. Roberts, Foster and Treniain, on the floor of the House, deemed it at the same time expedient to again come before the public in their own behalf; and, accordingly, on the 27th of June, 1874, they caused to be published the following card : CARD OP PHELPS, DODGE & CO. In reply to the charges specifically gneferred against them by Gen. Butler, in his speech before the House of Representatives, June 19i/i, 18'74. To OUR Friends and the Public. After the full statement heretofore published of the difficulty of our firm with the customs ar.thorities, and the subsecpient exhaustive examination of the whole matter by the Commit¬ tee on Ways and Means, which resulted in the entire remodelling of the “Aloiety” and “Seizure Acts,” wo had not supposed it would bo necessary to add anything further in the way of explanation. But in the brutal and cowardly attack made upon us during the closing hours of Congress by General Butler, certain charges were preferred by him, in his character as a Representative, upon the floor of the House, against our firm, so definite and with so much of apparent authority that we feel called upon, in justice to ourselves and the public, to make once more a brief statement. AN EXTRAORDINARY HISTORY. 245 The charges specifically preferred were, in the main ; jPtrai—That we had, as a firm, attempted to defraud the Government and evade the revenue by importing metals in the form of works of art and statuary. In reply to this it is only necessary to say that the importations to which General Butler referred were made before the firm of Phelps, Dodge & Co. came into existence, and before any one of the present or late members of the firin became connected with the metal importing business—the senior member of the firm, 'William E. Dodge, being at the time engaged in the dry goods business. Second —That in the Tariff Act of April, 1864, which temporarily-increased the rates of duty on imports fifty per cent, Mr. Dodge went to the Treasury and had a comma taken out • of one place and put in another, and thereby cleared $2,260,000. The exact facts in respect to this charge are as follows: In a very full revision of the tariff, as embodied in the Act of June, 1864 (and not the Act of April, 1864, as specifically mentioned by General Butler), it was decided by both Houses of Congress, after full discussion, that an increase of duties on tin and terne plates would imperil ihe large industries already taxed under the internal revenue, in which tin was used for the packing of fruits, fish and vege¬ tables, meats and the like, and so tend to reduce, rather than increase the receipts of the Treasury. At-the same time it was decided to increase the duty on sheet iron galvanized ■with an admixture of tin—which article had been imported under the name of “ tin plates galvanized,” and so definitely and distinctly named in connection with and at the same rate as “galvanized iron,” in every successive tariff since 1857. The bill was passed on the 30th of June and went into operation immediately. On examining its provisions we found that while the duty on “tin and terne plate ” remained unchanged at 25 per cent, ad vedorem, the addition of a comma after the word “ plates,” in the clauses “ tin plates galvanized,” rendered the-whole paragraph ambiguous if not absurd, and apparently imposed a new duty of 2^ cents per pound—an increase of 100 per cent, on existing duties. Seeing how impossilde it would be to enter our invoices at two conflicting rates for one and the same article, we applied at once to the Collector for a decision in respect to the course to be followed. The Collector saw the difficulty, and referred us to Mr. Fessenden, then in Now York, and just appointeil Secretary of the Treasury. We called upon him, and he immediately stated to us and to the Collector that he had been Chairman of the Senate Committee and also of the Conference Committee, which had charge of the Tariff bill in question ; that he fully remembered the dis¬ cussion as to tin plates, in which he had taken part; that the full sense of both committees bad been that tin plates should remain at 25 percent, ad valorem; that the “comma” had evidently been added by mistake in the haste of engrossing, and could not be considered a.s the true interpretation of the law. He accordingly ordered the Collector to pass the goods at 25 per cent., and stated that on his return to Washington he would issue a special order making the construction official; and this he did under date of July 22, after taking full time for consideration and consulta¬ tion with his former colleagues in Congress and the experts of the Treasury Department. As finally intei-preted by Mr. Fessenden, moreover, the law was not in our direct favor ; but, on the contrary, had the technical error been allowed to stand, and to entail a very excessive increase of duties, the advance in the price of stock on hand would have yielded to us, in common with all other importers and dealers, a very considerable profit. The facts, there¬ fore, were exactly the reverse of those stated by Gen. Butler. TAirtZ—General Butler states that in our large and complicated business every invoice brought day by day by us to the Custom House was wrongly stated, and that we were con¬ sciously and continually guilty of fraud. General Butler knows this to be untrue. He knows, on the contrary (for as the paid 246 CONGRESS AND PHELPS, DODGE & CO. attorney of tlie informer he has given attention to the subject), that after a most careful and merciless examination of some thousands of our invoices by Jayne and his experts, aided by '.nr own clerks, bribed to injure their employers, with the full use of our books and papers, .here were found only some fifty that could in any way be made the subject of con. troversy; and that in the case of some of these, of from $20,000 to $30,000 each, the utmost possible loss to the Government could not have been in excess of from 80 cents to $1 per invoice. And, furthermore, that the total loss claimed by the Government on all the invoices was only about $1,600, out of an importation of some $40,000,000, and covering the space of five years. We believe General Butler further knows, but wilfully conceals the fact that the same error and misunderstanding of the intricate law which compelled us, under severe penaltiesi to invoice our goods both at cost price and at market price, led us, in the case of a great number of importations, to invoice their value above cost, which occasioned a gain to the revenue and a loss to ourselves immensely greater than the Government claims to have lost. Finally—looking at all the circumstances and character of this speech, its constant falsifi¬ cations and perversions of truth, and its brutal personalities, we are quite willing to leave the verdict as to its effect to any who have fairly looked into the matter of which it treats. PHELPS, DODGE & CO. New York, June 26th, 1874. THE TRUE STORY OF THE LEADEN STATUARY. The charge of importing lead in the form of images and statuary, with a view of fraudulently evading the customs revenue, having been specifi¬ cally but falsely preferred by Gen. Butler, in his speech against the firm of Phelps, Dodge & Co., it is essential to the completeness of this extra¬ ordinary history, to incorporate with it at this point the following true story of the transactions referred to, as told for the first time completely by Hon. David A. Wells, late U. S. Commissioner of Reve¬ nue, in a communication to the columns of the N. Y. World, May 11th, 1814. As this communication, furthermore, was published full five weeks before the date of Gen. Butler’s speech, and was extensively circu¬ lated and noticed by the press at the time of its publication, the malice and mendacity of Gen. Butler in making the false imputations in question a ground for a fresh assault on a firm which be, through bis clients, bad assist¬ ed in persecuting, is only too evident. A CURIOUS CHAPTER IN ECONOMIC HISTORY. There is an amusing old story told of the magistrates of a certain country town in France, who, before the days of street lamps and gas, and as a better security against the unlawful acts of “vagrom men,” passed an ordinance that “no citizen should walk out after dark without a AN EXTRAORDINARY HISTORY. 247 lantern,” and that disobedience of the law should entail a heavy penalty. The watch, vigilant in the performance of duty, accordingly arrested, the first night after the law took effect, a well known and estimable individual, but of waggish propensities, and hauled him up before the local Dogberry on a charge of having broken the statute. The defendant, however, on being asked why punishment should not be inflicted upon him, averred that he had committed no offence, and, in support of his plea, produced a lantern. It being rejoined that the lantern had no candle, he next main¬ tained that the law did not require that the lantern should contain any candle ; and the statute being examined and the defence found valid, the arrested party was dismissed, and the law so amended as to read, “ that no citizen should hereafter walk out after dark, without a lantern and a candle.” The next night the same person being found walking in darkness was again arrested and arraigned, but again maintained that he had eom- mitted no offence ; and, in proof thereof, produced a lantern and showed that it contained a candle. “But the candle,” said Dogberry, “is not lighted.” “And the law,” rejoined the wag, “ does not require that it should be;” and this interpretation being found correct, the accused was once more discharged and the statute further amended so as to read, “ that no citizen should hereafter walk out after dark without a lantern and a candle ia it, and that the candle should be lighted.” The next night the same incorrigible and troublesome person was again brought up before the Court, and this time both watch and magistrate thought they had a sure thing of it ; for, to all appearances, he had not on this occasion even made a pretence of complying with the law. But the triumph of the officials was of brief duration, for, to their utter disgust and amazement, the accused drew from his capacious coat pocket a dark lantern, and showed that it not only contained a candle, but that the candle was lighted and burning. Warned by this threefold experience, the statute was for a third time amended, and this time so fully and clearly that no further practical jokes were attempted, and the majesty of the law remained unassailed. As thus told the above story is manifestly a broad burlesque, even in its application to stupid French “ country officials,” and without further foundation than the imagination of its author. But it is nevertheless a most curious and amusing circumstance that it has been reserved to the United States to furnish out of the history of its fiscal legislation a record of actual experience which, in many respects, is the exact and truthful counterpart of the French burlesque; and, as the incidents involved have more than once (but always incorrectly) been alluded to on the floor of 248 CONGRESS AND PHELPS, DODGE & CO. Con-ress and maybe found pertinent to prospective legislation and debate in I'espect to Custom House reforms and irregularities, it is proposed to now embody them for the first time, and, as a contribution to economic literature, in the form of a correct and complete narration. Between the years 1816 and 1828, encouraged by the imposition of a low duty on imported metallic lead, the manufacture of white lead, as a basis for paints, came into existence in the United States and developed with o-veat rapidity, the principal seats of the business being the cities of New York, Philadelphia and Baltimore. But about the years 1826-28 the discovery of the lead mines at Galena, 111., became generally known, and as the first reports were to the effect that the deposits were of such un¬ paralleled richness, purity, magnitude and easy accessibility as to make it Only a question of time when the whole world, from sheer inability to com¬ pete, became wholly dependent for its supplies of lead on this one locality, it was at once considered desirable by many people to establish, so far as fiscal legislation could do it, a most extraordinary economic principle, and one which from that day to this has proved popular in all our tariff enact¬ ments ; and this was to malm the discovery or recognition of the exist¬ ence of any great natural advantages—either in the way of mines, soils, climatic advantages, forests, means of intercommunication or national characteristics—the immediate occasion for cursing the country by the creation and imposition of some new tax, thereby making dear what was before cheap, and endeavoring to work up to a state of abundance through conditions of scarcity artificially created and unnecessarily per¬ petuated. In this particular instance the principle was exemplified by raising the duty on lead imported in pigs and bars from one cent a pound to three cents, and to this extent increasing to the consumer the price of the raw material, whether of foreign or domestic origin, and of all manufactured products in which lead entered as the principal con¬ stituent. As the duty was not at the same time correspondingly advanced on the import of white lead, and as the lead mining interests of Galena were not prepared to supply at any price the immediate demand thus artificially created for their products in the domestic market, the Ameri¬ can manufacturers of rvhite lead all at once found their business threat¬ ened with utter destruction ; and, with intellects preternaturally sharpened by a prospective loss of a large invested capital, they looked shrewdly about to see in what manner they could save and protect themselves. And putting on their spectacles, and scrutinizing carefully the entire tariff, as modified by the special Act of 1828 referred to, they soon dis¬ covered that the Government, while effectually closing and barring up the big door by which foreign lead could be imported, had inadvert- AN EXTRAORDINARY HISTORY. 249 cntlyleft wide open a smaller door beside it, inasmuch as while Congress liad prescribed a duty of three cents per pound on lead imported in pigs and bars, they left a prior duty of fifteen per cent, ad valorem on tbe import of old lead, fit only to be remanufactured, unrepealed and in force. Those were the days of packet ships and slow communication with the Old World ; but we may readily believe that no time was un¬ necessarily wasted by those interested in this discovery ; and at the earliest practicable moment afterwards agents of nearly every important American house engaged in the importation of metals—Barclay & Livings¬ ton, Boorman, Johnson & Co., Hoffman, Bend & Co., Phelps & Peck, William Wright & Co., Asa Fitch, and many lesser firms—were ransack¬ ing the markets of Europe for the purchase and shipment to the United States of old lead. Of course, the legitimate market supplies, never great of this peculiar article, soon gave out, but the agents and correspondents of the American houses being Yankees, proved fully equal to the emer¬ gency, and a scheme was forthwith devised to replenish the stock by exchanging new lead for old, and contracts in more than one instance, for example, were actually entered into and carried out for stripping from extensive factories in different parts of England their old lead roofing —lead being then used more extensively than now in the place of slate —and replacing it without expense to the owners with new roofing on condition of receiving the old material. In the course of time the old lend thus collected began to make its ap¬ pearance on this side of the Atlantic, and arriving in large quantities— almost by the ship load—at the ports of New ATork and Boston, naturally attracted the attention of the Custom House authorities, who at first de¬ murred to its entry at the low rate of 15 per cent, ad valorem. The matter, however, being referred to the Treasury Department at Washington, an answer soon came back that the position of the merchants was unimpeach¬ able, but the Department would have the law amended as soon as possible. But the merchants by this time, in studying up the fiscal legislation of Congress in respect to lead in pig and old lead, had made another discov¬ ery—and that was that The Tariff Act in force was mandatory to this fur¬ ther effect, namely, that if any j)erson or persons should import musket balls or leaden bullets into the United States they should pay to the custom authorities a duty on the same of 15 per cent, ad valorem, and, in default thereof, the goods should be forfeited and the importers be punished. Like good citizens, therefore, the merchantc made haste to obey the law, and their agents in Europe being duly instructed, lost no time in buying up all the musket balls and leaden bullets they could find for sale, and when the foreign markets were exhausted they had musket balls of the regulation 250 CONGKESS AND PHELPS, DODGE & CO. weight and calibre largely manufactured, and all were duly shipped as fast as possible to the United States. Again the Custom House authorities ob¬ jected, but again came back the response from Washington that the law was explicit in respect to the 15 per cent, duty, and that nothing could be done in the way of restraining the importation of leaden bullets in place of pig lead until Congress had provdded further legislation on the subject But the Tariff Acts in force from 1828 to 1832 were, however, almost as much a mystery and a muddle of perplexity as are the acts under which the customs are at present administered, and it was only after continuous study and investigation that their full depth of meaning and of wisdom could become evident. But the success attending the import of old lead and musket balls had been so remarkable, and the preservation and resus¬ citation of the “white lead” business so encouraging, that the merchants were stimulated to further fiscal investigations; and again putting on their spectacles, they discovered two other remarkable provisions of the then ex¬ isting tariff which heretofore had not been considered of much importance. These provisions related, the one to “leaden weights” of all descriptions, and the other to “ sounding leads,” and were to the effect that if any per¬ son imported any of these articles into the United States he should pay on the same a duty of 15 per cent, ad valorem. It seems almost unnecessary to relate in detail the consequence of these discoveries, but it sufficeth to say that those were the good old days when false standards were far more of an abomination than they now are, and it was astonishing how great a demand all at once appeared to have been created in the United States for full, fresh, and new sets of leaden weights (from half an ounce to fifty-six pounds and upwards, but notably of the heavier denominations), which had not had their accuracy impaired by continuous use and abrasion. If the exact truth, moreover, could now be known, it might also appear that many persons at that time (especially in the cities of New York and Boston) had somehow become indoctrinated with the idea that the possession of more “ weights ” would in some way increase the quantity of things to be weighed—in the same way as the progressive men of the present day have brought themselves to believe that the possession of more paper money will increase the value and quan¬ tity of the things that this same money can bu 3 ^ Those were the days, also, when clocks were high and stood in corners rather than upon mantels, and were moved by weights rather than by springs, and our ancestors of forty years ago—and none knew better than they that “ time is money”— all at once seemed possessed with the desire to have more clocks, for the import of heavy leaden clock weights, with iron hooks neatly fitted to one end, and which, prima facie, could be only used for the manufacture of AN EXTRAORDINARY HISTORY. 251 clocks, all at once increased and rapidly became a business of magni¬ tude. Navif’-atovs, also, about this time, it might be inferred, became more intel¬ ligent; or, if not more intelligent, then, through a desire to save their insurance premiums, more eautious ; or, if not these, then the desire of American geographical students to study more accurately the sea bottom, might have been abnormall}" stimulated; for in what other way could an excessive and unusual import of deep sea sounding leads be accounted for? leads small, leads large, leads of two ounces weight, leads of seventy pounds weight, leads a few inches in length up to leads two feet in length -all with an eyelet at one end for the sounding line attachment, and a cav¬ ity at the other for the reception of the tallow, by the agency of which specimens were to be brought up from the sea bottom. But the Custom Hou.se authorities were practical men. They indulged in no philosophical reflections as to any abstract possible uses of the imported articles in question. They saw in all of them lead and lead only —and on lead, in the interests of the Galena mines and of the revenue, they wanted a duty of three cents per pound. They accordingly, as opportunity offered, seized and refused to deliver the exceptionally large invoice of “clock weights,’’ “scale weights” and “sounding leads, and the appeal, as usual, from their proceedings went up from the merchants to Washington. But if the Custom House officials were practical men, the Treasury magnates at the capital, on the other hand, were strict construc- tionists,'^and as they found the statute written so they interpreted it; and in all cases the arrested importations of the merchants were, after a little delay, restored and admitted to entry; and in at least one case, where three cents per pound had been paid under protest on the above men¬ tioned leaden articles, the difference between that sum and fifteen per cent, was returned to the merchant by the Treasury. In fact, “ as sea stores ” of all descriptions were then on the free list, “ sounding leads’ might have been claimed to be exempt from all imposts ; but the merchants were gen¬ erous, and this question does not appear to have been raised. It is not to be denied, nevertheless, that by this time lead had got to be a very irritating topic to a Federal official; and, indeed, it was only necessary to say “ lead ” to a United States district attorney, a collector or revenue inspector, to seriously disturb his mental equanimity. An oppor tunity to retaliate upon their mercantile tormentors was, therefore, earn¬ estly sought for, and before long such an opportunity seemed to present itself. A prominent New York house in the metal trade, which, in connec¬ tion with some half dozen or more leading firms, had been engaged in importing old lead, musket bullets, sounding leads, clock weights, and the 252 CONGRESS AND PHELPS, DODGE & CO. like, and passing them, under a strict but legal construction of the stat¬ ute, at fifteen per cent, ad valorem, imported on one occasion, during the period under consideration but subsequent to the events narrated, an invoice of stereotype metal. Now, stereotype metal was then on the free list of the tariff, and subject to no duty, and in this particular instance the importation had been made in consequence of a direct order received from one of the largest type founders in New York; but, as it came in pigs or bars, was in unusual quantity, and consisted merely of lead mixed with comparatively small proportions of antimony and bismuth, the Custom House officials conceived the idea that it was only a new device of the enemy to take advantage of the faulty statute, and that the ultimate intent was to remelt the stereotype metal, separate its several constituents, and then dispose of the lead independently. The whole invoice was accordingly seized, and suit commenced in the United States District Court for its forfeiture, the Government having previously ascertained, by means of an analysis of a sample bar, made at their request by the then famous New York chemist, old Dr. Chilton, that the metal contained somewhat more than eighty per cent, of lead. The District Attorney at that tim; was Price, afterwards best known for some financial irregularities. The merchants, of course, resisted, and on the day of trial appeared in court with the type founder on whose account the metal was ordered, and other experts, to prove that the import and prospective use of the metal were entirely legitimate. The Government opened their case by stating their assumption that the metal was not imported for the manufacture of stereo¬ types but for the purpose of defrauding the revenue, and, calling as their first witness Dr. Chilton, examined him somewhat as follows : “ District Attorney .—What is your profession ? Dr. Chilton .—A chemist. Q. Where were you educated? A. In Edinburgh, and have followed for many years my profession in New York. Q. Have you made an analysis of this imported metal (at the same time referring to one of the bars included in the invoice) ? A. I have. Q. Of what does it consist? A. Of some eighty per cent, of lead ; the remainder, antimony, bismuth and tin. Q. Is it possible to separate these several constituents, as thus mixed, so as to use and sell them separately ? A. Perfectly so. Q. Please tell the Court what, in your opinion, would be about the expense of the operation. A. Rather more than all the materials are worth.” There was silence for a few moments'. The District Attorney did not seem to be possessed of a further inquiring spirit. It was a warm sum¬ mer’s day, and the Judge (Betts), after mopping his face with his hand- AN EXTRAORDINARY HISTORY. 253 kercliicf, stretched liis head forward, and somewhat brusquely asked if Mr. Price liad any rebutting testimony, and, on receiving a negative reply, fell tack in his chair with the remark, “Then the case had better be dis¬ missed.” And dismissed it was. But the troubles of the Custom Ilotise otBcials were not yet ended ; and l)erc comes in that portion of this curious scries of events which is best known to the public, is the most comical, and which, as has already been remarked, is often referred to in Congressional debates, when topics of the tariffs, smuggling, or itnder valuations are under consideration. The wicked merchants, encouraged bv' their complete success as law interpreters, had continued their tariff investigations, and had further found among its provisions in force one to the effect that “ metal statuary and busts” might be imported free of duty. It was thereupon immedi¬ ately determined by the merchauts that if the American people desired to cultivate their taste, or keep alive the memory of the good and great of former days by adorning their houses and grounds with metal statuary, they ought to have the opportunity of so doing ; and, accordingly, large orders were sent to Europe—at that time the exclusive seat of high art— for the manufacture of busts—mainly colossal—of Washington, Lafavette, Napoleon, Moses and the prophets, and not forgetting, also, duplicates or reproductions of the great works of antiquity ; and as lead, of all the met¬ als, seemed to possess in the highest degree the qualities of durability ten¬ acity, cheapness and facility of being moulded, the statuary in question was directed to be made of lead. It should also be remarked in this con¬ nection that lead statuai’y fifty years ago was not the abnormal, exceptional tiling it now is. In fact it was then the common material for cheap imagery throurrhout Europe, when something less expensive than bronze or marble was desired, and filled the place which is now supplied by cast iron and zinc, but which materials fifty years ago were not thought suscep¬ tible of ornamental adaptation. And that the lead statuary in question was really ornamental is proved by the circumstance that some of it thus imported is yet in use for ornamental purposes, one piece embellishing at tile present time the garden of an eminent banker, NVilliam Butler Duncan, on Fifth avenue. From such an aesthetic point of view, also, did the pro¬ saic Custom House officers regard the first importations of these leaden images, and so might they long have continued to regard them, had the persons in Europe entrusted with their shipment been more careful in I’espect to packing. But when Washington came up out of the hold of the vessel after a rough voyage with his nose punched in, and hvapoleon with bis eyes sufficiently askew to require an operation for strabismus, and Moses looking very much like a subject on whom the law ought to be CONGRESS AND PHELPS, DODGE & CO. 254 administered rather than an author aud administrator of the law, suspi¬ cion was naturally excited, and forthwith the statuary was seized and held for forfeiture by the customs authorities. In answer, the importers, as before pointed to the clear and explicit provision of the tariff then in force —“Metal statuary and busts free and urged the Government, if they doubted, to institute a suit. But Mr. Price, the district attorney, had once burned his fingers with cold lead, and persi.stently refused to bring the mat¬ ter into court. Thereupon one of New York’s then best known merchants and publicists, David Leavitt, Esci., caused an invoice of the questionable statuary to be imported into Boston, and arranged with the district attor¬ ney of that port to try the issue in respect to its dutiable character. When the trial came on Daniel Webster appeared as counsel for the defence. His speech in answer to Government was very brief, but to the point, claiming the law provided for the admission of metal statuary, busts, etc., free, with no limit as to the kind or quantity, and that the imports in question were metal statuary, though made of lead. When the case closed Mr. Webster requested the Judge to charge the jury that they were to decide whether the articles were metal statuary, and if they found that they were, they must bring in a verdict for the defendants. The Judp substantially did as requested, and the jury, in a few minutes after retir¬ ing, returned with a verdict for Mr. Leavitt. The decision in this case practically put an end to the whole contro¬ versy. The lead statuary under seizure was released, the import was allowed to go on unrcstiicted, and, as soon as circumstances permitted, Congress amended the tariff by equalizing the duties on all forms ot lead, and at the same time satisfied the white lead manutacturing interest by fully protecting their products from foreign competition. As this curious story has been heretofore told, the importation of the leaden statuary has been popularly attributed to the agency of the well known New York firm of Phelps, Dodge & Co. This is, however, an error. The firm of Phelps, Dodge & Co. was not at the time of the occurrence of these events in existence ; and the old firm that preceded them—namely, that of Phelps & Peck—although large importers of metals, were not con¬ cerned in this matter of the leaden images; Hon. W. E. Dodge, subse¬ quently the senior of Phelps, Dodge & Co., being then engaged in the busi¬ ness of dry goods jobbing and importation, Avhile Mr. James, senior (now of Liverpool), was a resident of New York, engaged in the wholesale grocery business. The credit of originating the idea of importing lead in the form of busts and statuary was undoubtedly due, in the first instance, to Asa Fitch, Esq., who, prior to engaging in mercantile pursuits in New York, had AN EXTRAORDINARY HISTORY. 255 served for a niinibcr of years as American consul at one of the ports of France, where the extensive use at that time made in France of lead for statuary and otlier ornamental purposes, had, doubtless, become to him familiar and suggestive. Subsequently Mr. Leavitt, as well as other New York merchants, ('xtensively availed themselves of the same expedient. It would be a mistake, furthermore, to infer that like muddles and per- plexitie.s cease to characterize the tariff, when Congress, taught by experi¬ ence, successively remedied the omissions and commissions of the Act of 182;<. On the contrary, there has been hardly a tariff enacted since that time which has not the absurdities of the old lead, the musket balls, the clock weights, the deep sea leads, and the leaden images in some form re¬ peated. Thus, for example, in the tariff of 1846 a duty was imposed on flaxseed of twenty per cent., but in the tariff of 1857 linseed was made free while flaxseed was charged fifteen per cent. duty. As might have been expected, the import of linseed was always large, and that of flaxseed always very small. Again, in 1864, the manufacturers of spool thread, anxious to shield themselves against all foreign competition, obtained a prohibitory duty on the import of unwound cotton thread or yarn. When the law went into effect it was found that the result of the new duty' would be the destruc¬ tion of the manufacture of line elastic fabrics, suspenders, gaiters, etc., as wed as of certain worsted fabrics, which were dependent on Europe for certain qualities of warp yarns not then manufactured on this side of the Atlantic. The difificalty was, however, got over by an absurd Treasury ruling that cotton warp or yarn, intended for use in the manufacture of elastic worsted or woollen fabrics, was not unwound thread or yarn, but a manufacture of cotton "not otherwise provided for.” Another example of customs romance of a prior date was that of a man¬ ufacturer of New England, who, finding the growth and development of his hu-siness of making “cloth covered buttons” seriously interfered with by the almost prohibitory duties levied on the importation of foreign silk, worsted and other suitable fabrics, resorted to the expedient of importing such fabrics free, or at a nominal duty, in the form of rags, i. e., irregular strips and cuttings; to which form it would have been necessary to reduce the fabrics intended for button covering, even when imported in the piece. And, coming down still later, Congress, in 1872, enacted a general re¬ duction of 10 per cent, in tariff rates on metals and manufacture of metals —watches and jewelrv excepted. It is clear, however, that “ watch cases ” are not “ watches,” and neither are springs, escapements, wheels, etc., etc., considered separately. The course of trade, therefore, in respect to im¬ ported watches, soon adjusted itself as follows : The movements taken out 256 CONGEESS AND PHELPS, DOD,GE & CO. of the cases, packed in separate cartons, but carefully numbered, are, when thus imported, clearly manufactures of metals, and as such entitled to the rebate of 10 per cent. In like manner the cases, without the essentials of a w^atch in them, are nothing but manufactures of metal (gold and silver), and must be also thus treated in respect of duty. Watches, of course, when they come in as watches, pay full duty ! ! ! Thus the old, old story of the effect of impolitic and absurd restrictions on trade and commerce, the lesson of which Europe through centuries of ex¬ perience learned and profited by, continues to repeat itself in the fiscal policy of the United States. Let us hope that the result here, too, at no distant day will be what it has been elsewdiere, namely, to force men to the conclusion that the best system of taxation is to tax but a few things, and then leave those taxes to diffuse, and adjust, and apportion themselves by the inflexible laws of trade and political economy—and, furthermore, to recognize that no system of government has any just claim to the title of free which arbitrarily takes from its citizens any portion of their property excejat to defray the State’s necessary expenditures. TESTIMONY OF THE COLLECTOR OF NEW YORK AT THE TIME OF THE LEADEN STATUARY IMPORT.A.TION. It is interesting to note in this connection the following testimony of the Collector of the Port of New York at the time the anomalous importations, alluded to in the above article, occurred : We were, says the New York Express (July, 1874), on Saturda}' afternoon, favored by an interview with the Collector of the Port of New York when Gen. Jackson was President, and under whom the lead statutes, over whicli Gen. Butler became so violent, were imported free of duty. It was exceedingb^ agreeable to listen to the intelligent and explicit statement of the his¬ tory of that amusing transaction, in which the present firm of Phelps, Dodge k Co., nor the preceding firm, nor any of the members of either of them, were not in anywise directly or indirectly connected. Says the old Jack¬ sonian Collector: “ It was another party, whose name we could give, if required, who ludicrously figured m that business of the importation of the busts of Washington, Franklin, Jefferson, Adams, and numerous well known, and, at that day, reverenced patriots. ” The Collector, at the time, says he objected to the then sudden burst of patriotism, as manifested by the increased demand for busts of the revolutionary patriots, but was over¬ ruled by the then Secretary of the Treas¬ ury. This serio-comic story of the importation of leaden statues by Gen. Butler, as applied to any of the past or present firm of Phelps, Dodge & Co., is, we are authorized by the old Collector to" state, wholly unfounded in truth, and that, during his whole term of office under President Jackson, no firm enjoyed a more honorable and enviable reputation in its deal¬ ings with the Custom House than the then firm, now Phelps, Dodge & Co. At the time of those lead bust importations Mr. Win F. Dodge, says the Collector, was a young man filling the modest position of a clerk, not a member of any firm. COMMENTS OF THE PRESS. As might have been expected, the extraoT(;Iinary debate in the House of Representatives initiated by General Butler, a very full report of which AN EXTRAORDINARY HISTORY. 257 (copied from the columns of the Congressional Record) has been herewith given, excited much attention throughout the country, together with a feeling of general regret and disgust that any circumstances should have made it permissible lor the chief actor to have so conspicuously occupied one of the national halls of legislation for the purpose of gratifying his per¬ sonal animosities and serving clients whose conduct both Houses of Con¬ gress had previously declared disgracclul. The following extracts from the leading, newspapers of the country are a most striking testimony of the state of public opinion at that time, both in regard to General Butler and the persons whom it was his chief object to injure and defame : THE CASE OF PHELPS, DODGE & CO. AND THEIR ASSAILANT, GENERAL BUTLER. [Fi'om the N. Y. Express, June Zith, 1874.] The better portion of the American public are touched with a feehng both of indigna¬ tion and mortitication at the recent language of Gen. Butler, M. 0., from Massachusetts, in the IT. S. House of Representatives, in con¬ nection with tlie alleged practices of the leading commercial house of this country. Not only was the good name of this time honored house assailed, but the private char¬ acter of the senior partner of the firm, Wil¬ liam E. Dodge, Esq., was most wantonly libelled, under the known protection of non¬ responsibility for words spoken in debate in the House. Had the language of Gen. Butler been uttered in any Police Court, even the lowest, it would have been promptly rebuked. It was used ad libitum, w'itliout one word of disapprobation from the presiding office. Not only the motives of the firm, but even the re¬ ligion of its individual members, were both maligned and stabbed in an American Con¬ gress, and the lifetime good name misrepre¬ sented and most wickedly criticised. Christianity, truth and decency thus be¬ ing set at defiance, alike caU for severe re¬ buke for such a prostitution of the liberties of debate by a representative in Congress. Every minister of the Gospel and teacher in America should feel indignant at the charac¬ teristic sneers at the followers and believers in the truths of the Saviour. Certainly our forefathers did not intend to protect any such freedom of debate in Con¬ gress, nor is it irx the true spirit of the Con¬ stitution. We mistake the spirit of Chris¬ tianity in America if the stabs of Gen. Butler are not hurled back with redoubled indigna¬ tion. The pulpit and the press alike should give a general denunciation of such slander¬ ous language in the House of Representa¬ tives by one of its members, under the as¬ sumed protection of non-responsibility for words spoken in debate. All of this was an attempted denial of the truth of the report of the Special Committee of the House of Representatives on all and singular as to the alleged technical under valuation of goods by this firm, as to the constructive loss to the Government of §1,600, in a business that exceeded §40,000,- 000 of importations during the last five years. While the capital and, enterprise of this house have added millions of gold annually to the Treasury, in the shape of paid duties, to the great advantage of the credit of the country, yet because hired informers, without character or responsibility, after an arbitrary seizure of the books and papers, and the use of corrupted clerks, had made out ii technical loss to the Government of $1,600, this world¬ wide house of established integrity and hon¬ orable fair dealing was systematically as¬ sailed and mulcted out of nearly $600,000 in the name of the Government, to be subdi¬ vided maiulj^ among informers and Govern¬ ment officials under the advice and sanction of Gen. Butler, as counsel for the prosecu¬ tion, and while a member of Congress. The guilty officials having failed to sub¬ stantiate their allegations before a disinter¬ ested committee of the House, and a report having been made in full corroboration of the uniform statements of Phelps, Dodge & Co., and the matter virtually closed, the whole original, exaggerated and unfounded allega¬ tions, are again spread before the public, through the defeated counsel of these in¬ formers, and under the protection of being a member of Congress. These assaults on the floor of the House are statements which we have repeatedly re- 17 258 CONGRESS AND PHELPS, DODGE & CO. futecl and rebuked. Indeed, all the insinua¬ tions and allegations of the past made against the business standing and transactions of Phelps, Dodge & Co. have fallen to the ground. We now give to the public the com¬ plete refutation of the last stab of Gen. Butler, after tlie verdict of the Special Com¬ mittee had been rendered against him. This last wanton attack upon private character ex- liibits. in its most hideous and wicked aspect, the spirit that has characterized the black mail¬ ing of one of our most responsible and lionora- blo American commercial houses, and fully jiistifies the strongest language of condemna¬ tion that can possibly be expressed. [Frmn the N. Y. World, June mh , 1874.] No one can beat Butler in two things, viz., in soundly thrashing the subject in hand des¬ tined for abuse; and, secondly, in repartee; but in this case his powers served him to lit¬ tle purpose, for at no time during his event¬ ful career d'd this master of abuse get so ter¬ ribly damaged and punished. But it may be readily imagined that the hero of Port Fisher , was not a little astonished to hear himself accused by Foster, of Ohio, as a receiver of stolen letters and a stealer of telegrams, to ,say nothing of the spoons allusion, or the reading of Jayne’s statement that Butler was his lawyer and feed by moieties; nor did ho escape a scorching about the Sanborn swindle. But the unkindest cut of all was when the diminutive, Roberts, of New York, assumed the stature of a giant, and in the most con¬ temptuous manner charged Butler with cow¬ ardice for not coming into court when he was wanted. “You pleaded weakness like a sick girl, and called out. ‘ Titinius, give me drink ’ ” It took all Butler’s audacity and the display' of all his wonderful readiness of repartee to get himself out of the hall not the worst drub¬ bed man in the country. It is universally admitted that Butler made a blunder in not holding his tongue; for the very object he had in view is frustrated by his own intemperate attack. His aim was to an- nihiiate Phelps, Dodge & Co., and, as far as the House is concerned, every member except Butler feels great sympathy for the attacked firm, and the papers just come to hand evince the same sympathy. It has been shrewdly suggested to-day that Butler was obliged to make the attack. It is said that, as Bout- well, Richardson and Dawes sold themselves to Butler, so Butler sold himself to his mj'S- tic and dark majesty, Jayne. It was Jajme who ordered last night’s farce and made But¬ ler deliver the speech he has had in his port¬ folio these eight weeks. Indeed, all the points were old and blunted by age. The abuse alone, which is of the Butlerian fragrancy, was fresh. It is noteworthy, too, that Butler went for the scalps not only of Phelps, Dodge & Co. but for those of Republican members. Pic was gratuitously and liberally polite to the Democratic party as a pmty, prophesying its speedy return to power. Then, and only tlien would he submit to a voluntary investi¬ gation. Truly Mr. Butler seems to forget that the mission of the Democratic party is to ]jurify the land from the putrescence in whicli he and his have soaked it, to undo what they have done, and not to waste time j investigating the like of Butler. BUTLER ANSWERED. [From the Boston Post, June 2Uh, 1874.] The odious personalities and the evident malice of Gen. Butler’s supplementary speech on the Moieties Bill render any response un¬ necessary. His remarks carry their own con¬ demnation. But upon the question of facts involved, Messrs. Phelps, Dodge & Co. furnish in a card which we print elsewhere a refuta¬ tion of the monstrous charges on which But¬ ler based his infamous abuse of that firm. In this reply Butler’s accusations are taken up categoricall}'. This explicit denial of the facts on which Butler founded his tirade at once deprives that offensive and unseemly exhibition of all excuse. But, aside from any consideration of decency, this assault upon an old and honora¬ ble house has a yet blacker aspect, in view o the fact that Butler could hardly have been ignorant of the falsity of the charges which he brought. With regard to the lead statue cases, they and the persons concerned in that evasion of duty have been notorious; and it is inconceivable that the paid attorney of Jayne, who must have had every opportunity of information about the extent of the alleged frauds in invoices, could be so deceived as to the character and amount of the errors dis¬ covered. Tlie time and circumstances of But¬ ler’s speech confirm the impression. It was made at the close of the session, after the re¬ peal of the law, when no correction could be made by the accused merchants before the adjournment of Congress, and when no op¬ portunity remained for an investigation into the slanders upon Secretary Fessenden’s mem¬ ory. It was practically useless, and ineffec¬ tive in any tvay except as it offered relief to AN EXTRAORDINARY HISTORY. 259 the spite of one who had seen a profitable client suddenly retired from business at a time when the prospect of great cases and fat fees was never better. The speech was in every part so consistently' a special plea for Jayne’s extortions as to give new color to Mr. Foster’s statement that Butler’s zeal on the floor of the House was the zeal of paid coun¬ sel. The manly, indignant refutation now furnished by Messrs. Phelps, Dodge & Co. finishes the characterization of this extraor-1 dinary exhibition. [From the Boston Dailt Gi-obe, July Wlh, 1874.] The reply of Phelps, Dodge & Co. to the charges of Gen. Butler, in his recent Congres¬ sional speech, is as vigorous as it is conclu¬ sive. It used to be said of Daniel Webster that his statements were arguments, lout the statements of Phelps, Dodge & Co. are so co¬ gent as to amount to absolute proof. Their simple record of facts disposes of the charge of evading duties by unporting lead as statu¬ ary, by showing, as we have before stated, that these things were done not only before the firm came into existence, but before any one of its present or late members became connected with the metal importing business. The accusation that, by changing the posi¬ tion of a comma in the tariff Act of April, 1864, they were enabled to clear $2,250,000, 13 refuted by the views and action of Mr. Fessenden, then Secretary of the Treasury, showing that their course was highly honora¬ ble throughout this whole matter. As to the alleged frauds in their other invoices, Phelps, Dodge & Co, not only convdet Gen. Butler of glaring falsifications, but of a blundering stu¬ pidity which has fortunately overreached it¬ self and fixed upon him a reproach which must deservedly impair his reputation either for honesty or skill as a political manager. BUTLER’S MENDACITY. [From the N. Y. Journal op Commerce, June 27 th, 1874.] We presented, many years ago,' a graphic history of the attempted importation of lead as works of art, but we were not surprised that Butler ignored all the truth in the mat¬ ter, and applied to Messrs. Phelps, Dodge & Co. an old joke, with which the house he named had no connection, since his unscrupu¬ lous character as a controversialist is too wel kuo'wu foi the public to expect anything bet¬ ter of him. The other portions of his bitter speech have no better foundation' in fact. The card from the house in ([uestion is a complete refutation of his slanderous imputa¬ tions. [From the New York Daily Bulletin, June 27th, 1874.] The card from Messrs. Phelps, Dodge & Co., printed elsewhere, puts a different complex¬ ion on Gen. Butler’s raliid attack. Injustice, to the firm, we submit it to our readers with¬ out any further comment, and wish only to observe tliat as long as this explanation j remains unanswered, Gen. Butler’s charge 1 against Mr. Dodge of having caused the late i Mr. Fessenden to rule for lower duties for the j benefit of the house of Phelps, Dodge & Co. ' appears suiiply ridiculous. [Frorn the N. Y. 'World, June 17th, 1874.] Phelps, Dodge & Co. publish in our columns a card replying to the charges made m the scurrilous Moiety-Sanborn speech of Gen. Butler, during the closing hour§ of the last I session of Congress. It gives the history of I the galvanized tin plates legislature, which ' Butler made the basis of a charge against Secretary Fessenden that in eight years he had, by the tampering displacement of a [ comma, lost the revenue over $30,000,000— i a charge from which we defended the late Secretary by an appeal to the public records, I showing its utter groundlessness. Phelps, ! Dodge & Co. show by ecpially cogent proof, i drawn from the private history of their busi- ! ness with the Department, that Butler’s ac- j cusation was equally false wdiich attributed I to them a profit of $2,250,000 from their pro- 1 curement of the displacing of that comma. I The much abused metal merchants describe Butler’s attack as “ brutal and cowardly.” Strong language can be forgiven them; but the attack seemed to us ignorant, blundering and stupid. And in its public aspects we re¬ peat what we said the other da}^ that it is disgraceful to Gen. Butler himself to be so unfamiliar with tariff legislation, and still more disgraceful that in a House of Represen¬ tatives fresh from tinkering a new tariff, and and in a Committee of Ways and Means pre¬ sumably familiar with every source of rev¬ enue, not one member out of 300—anxious to catch him tripping—not one member rose to 260 CONGRESS AND PHELPS, DODGE & CO. rebuke and correct General Butler on tlie spot. \_Fr07n the Boston Tkanscript, June 27th, 1874.] Phelps, Dodge & Co., of New york, ob¬ tained in Congress, yesterday, a thorough ex¬ oneration from the unjust charges preferred against them by interested parties, i. e., they were made the victims of the most enven¬ omed blackguardism by the Essex representa¬ tive, which now-a-days is considered the best endorsement possible from that source. [From the Nonutcli, Conn., Daily Advertiser.] Phelps, Dod e & Co. publish a card in the New York papers of this morning, which completely confutes the charges specifically preferred against them by Ben. Butler in his recent speech in the House of Representatives, and conclusively proves that Butler, as a paid attorney of Jayne, made use of his official position to maliciously utter the most un¬ founded slanders. How long, how long shall the councils of the nation be disgraced by the presence of such a scoundrel? [From the N. Y. Tribune, June 2&th, 1874.] The correspondent in Brooklyn, whose friendly criticism of our position on the mo¬ iety bill we published the other day, deserves a few words of reply. “ Your pungently ex¬ pressed indignation against Ben. Butler last week,” he says, “was too strong, unless Mr. Dodge can come out with a flat footed denial of the ‘ comma ’ business and the Goddess of Liberty fraud.” * * * The Tribune can¬ not, must not champion hypocrisiL We have never put ourselves forward as the champion of Mr. Dodge, or any other individual mer¬ chant ; on the contrary, we have insisted that the personal character of the victims of Cus¬ tom House rapacity had no bearing upon the question of reform. To suppose that we urged the repeal of the moiety law because the most conspicuous of the recent sufferers under it was Mr. William E. Dodge, and because we believed William E. Dodge to be a good man, is a gross misapprehension of our motives and object. The reasons for repeal would have been just as strong if the victim had been William M. Tweed. The moiety law was a scandal because it could not be enforced witliout hideous abuses, because it imposed penalties entirely disproportionate to the al¬ leged offence, because it punished men mer¬ cilessly for technical and unintentional in¬ fractions of the statutes, and gauged the amount of tlie punishment not by their guilt but by their fears and their necessities, be¬ cause it demoi'alized the whole customs ser¬ vice, and because it violated the time hon¬ ored doctrines of personal liberty which were once so dear to every patriotic American. The defence of Mr. Dodge, therefore, was not pertinent to the main issue; and although the great forfeiture case in which his firm was involved has frequently been referred to as an illustration of the oppressions of the law, his conduct in other transactions was not under examination, and it was not our part to pro¬ tect the honorable reputation which he has earned by a virtuous life. The firm, however, has “ come out with a flat footed denial,” and we fancy our corres¬ pondent will find it sufficiently pointed and emphatic. Gen. Butler charged Phelps, Dodge & Co. with fraudulently importing lead in the form of “ statuary” in order to avoid the duty. The answer to this is that when the famous lead statuary cases occurred, the firm was not yet in existence, and none of the present or late members of it had any connection with the metal importing business, Mr. William E. Dodge being at that time a dry goods mer¬ chant. Gen. Butler also charged William E. Dodge with inducing Secretary Fessenden to transpose a comma in a tariff bill, whereby the Government was defrauded of millions which it ought to have received in the form of increased duty on tin plates. The reply which we print to-day makes it perfectly clear that there never was any intention in Congress to make the increase of duty (100 per cent.) which Gen. Butler pretends, and that the construction adopted without any hesitation by the Secretary was the only reasonable and just one. Moreover, Mr. Fes¬ senden, who was Chairman of the Senate Fi¬ nance Committee during the debates on the bill, framed the disputed sentence himself, and must have known, if anybody did, precisely what it meant. These answers are final. There is nothing more to be said by Mr. Dodge—or by Gen. Butler. THE MOIETY SYSTEM. [Frcmi the N. Y. Evening Post, June ZQth, 1874.] We trust that the merchants of our great importing cities will not be lulled into false security by the success of their recent efforts in wresting a repeal of the moiety system from Congress. If they do they will surely have cause for repentance. They won their victory against a battalion of moiety sharers, who held a large force in reserve, which AN EXTRAORDINARY HISTORY. 261 would have been displaj’ed at any time the contest had seemed doubtful. Mr. Butler, of Massachusetts, was the only political captain whom Jayne pushed openlj' into the front of their line of battle. But there were other members of Congress, less directly under Jayne’s command, who would have borne their part in the fray if it had become expedi¬ ent. The best thing the merchants can do is to keep the public conscience alive to the enormity of the system under which Jayne and Butler fattened themselves, so that at last it shall become as hopeless to reestablish it as it would be now to reestablish ;\.fricnn slavery. No opportunity should be neglected to expose the misrepresentations concerning the moiety system, with which Congress was hooded in the closing hours of the session, and which otherwise may some day be re¬ ferred to as nncontradicted and by conseq\ience as incontrovertible. As an illustration of the misrepresentations to which we refer, we wOl take the familiar case of Phelps, Dodge & Company. Commenting on the speech and the card, we remarked that Phelps. Dodge & Company “had no need thns to defend themselves, for the extravagance and malice of the speech were its own refutation.” We adhere to this remark. But let us not be misunderstood to imply that it is not for the general interest of commerce and honest trade to minutely ex¬ pose Butler’s false statements, and to keep Iheir falsity present to the public mind, how¬ ever little such details may be needful for the vindication of the good name of the particu¬ lar firm which we have mentioned. In regard to Butler’s allegation, therefore, which is referred to in the extract quoted above, that every one of the disputed in¬ voices of this firm shows that it was consci ously guilty of fraud, we have taken pains to examine the under valuations in some of the invoices comprised in four different shipments, as they were exhibited in the debate in the Senate on June 10, and we subjoin a brief tabular statement of the results of our in¬ vestigation, which shows, in successive column,s, (1) the dates of the importations and the names of the vessels; (2) the kind of goods; (3) the amount in dollars, of these invoices, which was actually confiscated; (4) the amount in dollars of the actual under valuations on these invoices ; (51 the amount in dollars of the actual loss to the Treasury by the under valuations; and (6) the total amount in dollars of the invoices which were liable under the moiety system to seizure and confiscation on account of these undervalua¬ tions : It tluis distinctly appears that the total amount of the four shipments was ,$107,149 42; that on this amount there were under valuations to the extent of $245 58, and a consequent loss of duties to the government of $01 44; that the amount actually confis¬ cated to the United States for this delin¬ quency was $5,530 33, of which $2,265 16+ was put b}' Harvey (tl*e treacherous clerk and spy), Jayne (the harpy), and the col¬ lector, naval officer and surveyor of this port, into their own pockets ; and, finally, that the sura liable to confiscation for the delinquency was the entire $107,748 42, for which whole amount, according to the evidence given to the Committee of Ways and Means, a suit was advised by Senator Conkling. There¬ fore, under the moiety system, wliich Butler defends, and if an opportunity shall arise will seek to reestablish, the penalty actually ex¬ torted for tlie under valuation was move tlian ninety fold, while the penalty which, under the letter of the law, miglit have been extorted, was more than nine hundred fold. The precise figures are as follows: For every $1 of undervaluation $90 1073-6144 were ex¬ torted, and ,1985 2292-6144 might lawfully have been extorted. Putting aside the wliole question of “conscious” undervaluation (as to which, however, on these facts there can bo but one opinion among disinterested men), was tlie exaction whicli was inflicted a reason¬ able one—one worthy of a Just and humane government ? And was not the exaction which the law would have allowed, and for which a Senator of the United States advised tliat suit should be brought, ten times more unreasonable ? Need we make further com¬ ment ? 262 CONGRESS AND PHELPS, DODGE & CO. [From the Pbiladelphia Evening Bulletin, Jime 27th.] The savage attack made on Phelps, Dodge & Co., of NewTork, by Gen. Butler last week in the House of Representatives, has pro¬ voked a reply from that much abused firm. It will be remembered that Gen. Butler, while sneeriug- at the religious pretensions of Mr. Dodge, made the following charges against him and his partners : That tlie firm imported motnls in the shape of statues to avoid the duties, and that Mr. Dodge induced the Trea¬ sury Department to transpose a comma in the tariff act of April, 1874, by which he cleared two and a cpiarter million dollars. In our comments upon Mr. Butler’s speech we de¬ clared that these accusations were unworth}' j of lielief unless they should be sustained by | some better evidence than the naked asser¬ tion of Mr. Butler. This want of faith in the veracity of that gentleman is now shown to have been well founded, for, of course, there can be no cpiestion as to which we shall be¬ lieve when conflicting statements are made by two such men as Wm. E. Dodge and Benja¬ min F. Butler. The reply of Phelps, Dodge & Co. shows that the importations of metal statuary were nnide before the present firm existed, and before any of the present or former members of the firm were engaged in the business. The transposition of the comma was made, not in the Act of April, 1864, but in that of June, 1864, and it was made by Secretary Fessenden, as honest a man as ever lived, because he, as a member of the Senate at the time of the passage of the bill, per¬ ceived that the sense of the measure had been changed b}' a copying clerk. More¬ over, the law. as it stood after the correction was made, was not in favor of the firm, who would have realized more under the first iruerpretation than under the reformed law. Tins statement of facts will certainly be copied all over the country, and it will be likely to neutralize the effect of Mr. Butler's speech. Even the smartness of that effort will not atone for the wanton misrepresenta¬ tion with which it is filled; and the author will find that in his attempt to bolster up his reputation by an apology for Jayne and San¬ born, and a ferocious onslaught upon a re¬ spectable mercantile house, not even the most cunning and dexterous use of falsehood will suffice to attain his object. He is beaten by a plain utterance of truth, which is once again more than a match for elaborate misre¬ presentation. [From the Sykacusb iN. Y.) Journal.] Nobody but Ben Butler would have had the temerity to make a wanton assault upon a man of such high character as ‘William E. Dodge is known to be, like that which Butler made upon Mr. Dodge during the closing hours of the late session of Congress. Nobody else would have been so lost to a sense of common decency as to traduce one of the most valued philanthropists of the times, and to sneer at his Christian virtues. But “Old Cockeye ’’ was just the man for that kind of work, and in performing it he evinced no more conscientious regard for what he could not but have known was the truth, than a rhinoceros would have shown if it had been admitted to tlie floor of the House of Eepre- sentatives, and been allowed to flounder around as he pleased. He evaded every op¬ portunity which was given him to speak when the Sanborn business was properly before the House for discussion; and waited until the last hours of the session, when there could be neither time nor opportunity to answer his misrepresentations, and then he ejected his villifications upon- the audience which had assembled to listen to him, know¬ ing that what he said would be published by the telegraph and a regiment of reporters, from one end of the land to the other. But Butler having had his “ say,’’ Messrs. Phelps, Dodge & Company now have theirs. The card to their “ friends and the public ’’ is a direct reply to the allegations Avhich were made by Butler in his despicable speech. The statements made by this firm are veri¬ fied by other facts that are well knoAvn in business circles, and by facts that were brought out when the Sanborn and Jayne business was before Congress. That Butler absolutely disregarded those facts and assailed the personal honor and integrity of ‘William E. Dodge, with the basest and at the same time the most audacious misrepresentations, is another indication that he is as regardless of a sense of truth as he is reckless of a sense of fear. He is a dangerous man, just as all brute force is dangerous when coupled with an intellect in Avhich the moral faculties are largely deficient. But the American people have placed a true estimate upon him, and the conclusion is justified by existing circum¬ stances that Butler has at last reached the end of his tether. A LIBEL ANSWERED. [From the Boston Advertiser.] 'The firm of Phelps, Dodge & Co. have felt obliged to reply to the dastardly attack made upon them by General Butler in his speech near the close of the session. The charges are taken up seriatim and are conclusively AN EXTRAORDINARY HISTORY. 263 answered. Nothing can be added to the re¬ plies to the second and third charges, and very little to the tirst—touching the importa¬ tion of lead in the form of statuary, free of duty, to be melted down as soon as received by importers. The official record of Congress ffives a certain color to the accusation. In Globe for the session of March 1, 18G5 (3Stli Congress, 2d session, vol. 2, p. 1,255), the tariff '’bill being under discussion in the house, in committee, a section and Jayne matter. His connection with those two legalized government leeches on the mer¬ chants has been disgracefid, but not more so than his efforts on the floor of Congress to blacken the hitherto untarnished reputation of the largest metal importing house in the country. Had Mr. Butler not shared the .layne and Sanborn spoils, the nation migdit caimlv listen to his endorsement of the sys¬ tem, ‘but, as it is, Mr. Butler would have done better to have said nothing on the sub- stricting the term - statuary," then’on' the ject. for the impression made ^ freelist, to “professional productions of a i tercsted champion could not ^‘^'1 ■statiiai'v or of a sculptor only ’ Mr. Keriiaii j even had he made a most discreet, elociiient inquired what this\neant.^ Mr. Morrill, of I and effective speech instead of the one made. Vermont, then a member of the house, ex-: - plained how metals had been imported cast in I images, so as to evade duties. Then occurs : MR. BOUTIVELL ON PHELPS, DODb-E this passage; | Mr. Eldredge.—I should like to know from the — ?entleman from Vermont whether this does not re- i fF/vni the Tboy Whig, June 27t/i.] ler to one particular firm. I want to know if it i j • „ does not refer to Phelps, Dodge & Co., and to that , yve have always been disposed to give firm alone ? . n i Secretarv BouCwe'll credit for honesty and »r -I commoii\ense But l-.--d>cation of him- others in copper and lead, imported, and so soon | self and the administration in the transaction as they were landed and taken out of the custom i ■^vllich a respectable and honest hriii was Se revenue "" i swindled out of $270,000, is SO weak and VELDREDGE.—Wliiit firm did that? i foolish that we begin to doubt his honesty. Mr. Stevens.—P helps, Podge & Co. ' -^yell known to Mr. Boutwell and to all m, . j. T, 1 ■ 1 nt +i-,o i the (Jiistom House officials, that this lirm, in This charge was fully explained at the 1 possible deficiency in the time, but the record, having been printed, was j^^.p^rtations, had many imalterable. facts, fated then and ^ invoice value, often repeated smee, were that the offi.nce charged upon Phelps, Dodge & Co was com- ] P , excess of duties, and yet he cuarged upon Bhelps, Dodge « vo f ! effects to believe that there was some mystery mitted by an earlier firm of Phelps i Peck, ^ ^ vouchers which had es- whose successor, the present firm, was form-; notice but the nrvins- eves e successor, the present hrin, everybody's notice but the prying ey ed between the time of the offence and the 1 evident to Jayne, date of the above quoted debate, Mr. Pfelpsl Boutwell, alone remaining of the former house. Since 1 then Mr. Phelps has died, and, ^ough his ^ ^ Whoever brought them vithout ^'1 accomplice of the ^thief. Mr. Boutwell thinks it honorable ' 3 is still used, Mr. Dodge the firm. [As before show^n, the charge even against the firm of Phelps & Peck was without foimcTation.—E d.] These facts were perfectly well known to Gen. Butler, whose only apology for repeating the falsehood is that he did not invent it. So in the next generation some knave in Congress, who may have a grudge against the successors to the present firm ol Plielps, Podge & Co., will go to Butler’s speech in the Record for charges against them. For a slander once rooted is there forever. p CosiMEECB, June Butler fairly outdid his previous efforts in mud throwing in his speech on the Sanborn __ the Government to ac¬ cept and use stolen evidence. We think the administration that would use stolen goods is a party to the felony. Mr. Boutwell thinks the law was mercifully administered. We think it was an unconstitutional law im- mercifully administered. Mr. Boutwell was afraid to do right in this case and in others. He looked caludy on and let a pack of spies, thieves and swindlers, some in and some out of office, harry the merchants and plunder them and the Treasury under a law that he says was a had one, and yet he casts his vote for the very worst section in it, and most dangerous, because it is a violafion of private rights. 264 CONGRESS AND PHELPS. DODGE & CO. [From Haepek’s Weekly, July Mill, 1874.] Probably very few persons who read the speech of General Butler against the house of Phelps, Dodge & Co. believed that his state¬ ments were correct, or doubted that it was an ingenious special plea of an ‘‘ Old Bailey"’ ad¬ vocate. It was the final desperate effort of the apologist of the grosg iniquities of the Sanborn and moiety affairs to discredit the house through whoso persecution the in¬ famies of the whole system were exposed, and the position of General Butler has been dis¬ tinctly revealed. But although the assailant was utterly and ludicrously discomfited in the House, Messrs. Phelps. Dodge & Co. have not chosen to allow his deliberate misrepre¬ sentations in regard to their house to pass un¬ exposed, and have conclusively replied to his charges. The reply of the firm was not necessary to the vindication of a mercantile reputation which, since the facts have been known, is seen to have been wholly unstained, but it completes the exposure of the utter reckless¬ ness of General Butler’s statements. [Frorn the N. Y. Independent, July 2cZ, 1874.] We publish in another column the state¬ ment of Phelps, Dodge & Co. in regard to the malignant attack upon that firm by Gen¬ eral Butler just at the close of the session of Congress, and after the Anti-Moiety Bill had been passed by both houses. The state¬ ment completely vindicates the firm, aud seems to show General Butler to be either an ignoramus (which he is not) or a vile slan¬ derer. As to the statuary business, what¬ ever truth or falsehood there may be in this stor}^ it can have no application to this firm or to the members thereof, since the firm was not in e.xistence at the time of the alleged transactions. As to the “ comma” fraud upon the revenue, the statement shows that the comma, in engrossing the bill, was added by mistake; that as thus added it made the law absurd; and that Secretary Fessenden, who was a member of the Senate when the bill was passed, and also chairman of the con¬ ference committee that reported the bill, re¬ membering that the verjr point in question was discussed by the committee, ordered the bill to be constructed, as was intended at the time of its passage. As to the charge of frauds by false invoices consciously and con¬ tinuously perpetrated by this firm, it is not too much to say that this is simply wholesale lying, without evidence to support it, as malig¬ nant as it is reckless in its character, and, if the author was not shielded by the immu¬ nity for words spoken in debate which the Constitution gives to a member of Congress, rendering him liable to punishment. Tire re¬ sult is just what we presumed it would be when we last week called the attention of Phelps, Dodge & Co. to the allegations of General Butler. We invite our readers care¬ fully to peruse the statement, which they will find in another column. [From the Peesbttekian, July Mil, 1874.] We direct the attention of our readers to the statement of Phelps, Dodge & Co., New York, to be found on the second page of the advertising sheet of this week’s Preslijterian. This well known house pleads earnestly for its good name, and we do not wonder at the earnestness shown. A well established repu¬ tation is not a thing to be sacrificed easily, and mercantile honor is to a true merchant above all price. Mr. William E. Dodge, the senior partner in this firm, is well known in the Presbyterian Church, and it tvill be a difficult thing to convince men that he has been a party to the constant violation of the law of the land, or that he has ever consented to fraud upon the Government which he has upheld by purse and speech, or that he has sacrificed a “ good conscience before God and MOIETY’S LAST GASP. [From the N. Y. Financial Ciieonicle, July Mh, 1874.] It is a well known truism that neither the law nor its executor finds any favor in the eye of the offender. Hence, verj^ little won¬ der has been felt at that closing parting gasp of the Massachusetts statesman against the moiety reform and Mr. Dodge, the chief vic¬ tim of the defunct system. It was an unpar- donalrle offence for the members of that firm to show any sign of not liking to be rob¬ bed of two hundred and fifty thousand dol¬ lars ; worse still was it to become chief wit¬ ness against the law and against those suck¬ ing doves that fatted off it. And although it sounds a little boyish and puerile for a full grown Congressman to brand the whole race of God fearing men as impostors and hypo¬ crites, because, forsooth, this .firm did not turn the other cheek, or give tliose Govern¬ ment spies and their abettors their shirts when they took from them their coats, still the pub¬ lic can forgive the learned Congressman’s weakness and worse taste while they are re¬ joicing in the blessed results obtained. AN EXTRAORDINARY HISTORY. 265 fe notice that Messrs. Phelps, Dodge & Co. have seen fit to answer some of the charges which welled up out of this pure minded Massachusetts statesnrian’s breast; it was cruel and uncharitable of them thus to expose him further, for the}’- leave him in a very pitiable condition. But it gives him an occasion to repeat his beautifull_y classic idea that all merchants are liars and all Christians are cheats, so to him there -rvill be some com¬ pensation; and -ive shall exjoect to see at the next session of Congress a few more sqnirmings and contortions of these wounded but only half dead victims of this repeal, whose only desire is to reenact a measure on which they have so long feasted and fat¬ tened. They will fail, however. The country feels a wonderful relief in being rid of that whole system, and it will never knowingly return to it or anything similar. Tet this work, according to our idea, is not completed. The repeal has been accom¬ plished by the personal exertions of a few men. We are under great obligations to them. The extremely able argument of Mr. Schultz, the clear, convincing evidence of Mr. Dodge, besides tlie efforts and evidence of many others, hav'e removed this modern in¬ quisition. But the matter should not be. left thus. The Massachusetts statesman writhes under this repeal; let us have a committee appointed the next Congress to inquire into and discover, if possible, what it is in this repeal that is pinching him so, and all the other chief participators in this fraud, let us have them up and find out -^vhere the money went, and, wherever the law was ex¬ ceeded, make them pay it back. This is all pos¬ sible; it only requires the continuance of the persistency and wisdom hitherto used in this investigation. Great good may be thus ac¬ complished, and the recurrence of such evil practices—even if a bad law should, by fair means or foul, be again placed upon our statute hooks—will become impossible. Finally, if it is the verdict of the people that tins statute was a bad one. and that it was oppressively and wickedly executed, we think there can be no doubt but that the Government should at least return its por¬ tion of the plunder to those to whom it rightly belongs. No public good can be served by re¬ taining two hundred and fifty thousand dollars, or half that sum, because there are deficits of about fifteen hundred dollars in duty pay¬ ments out of an importation covering forty millions of dollars. Besides, there are some ^ery hard cases where the fines imposed, without any intentional fault on the part of the person fined, have resulted in financial ruin. All those wrongs should be righted, and we trust that our merchants will not suf¬ fer the matter to be quieted, but with the meeting of Congress will again be prepared to pursue it until the right of an officer to rob the citizen under color of law is nega¬ tived forever. [From the N. Y. Financier, June 27i7i, 1874.] Thus the unworthy animal, Jayne, retires into private life with contempt and a fortune, and the Government of the United States re¬ tires from its partnership with him and his gang of robbers and spies on the usual thieves’ basis of dividing plunder. The new law is not in all respects what it should be, but it marks a reform, one whose importance is not likely to be immediately appreciated except by those who have either worked for it or have iieen made victims of the oppres¬ sion at which it wms directed. That oppres¬ sion died hard, as all oppressions do which not only gratifv the love of power but have money in them ; the Custom House has been for many years becoming more and more the source of money .supplies and office rewards for party campaigns, and it resigned this Star Chamber with manifest reluctance. Senator Howe discovered nothing here two years ago except a few spots, which needed some touches of investigation whitewash, and he wants to know wliat is the matter with Jayne, of whom we had heard nothing. Senator Conkling was too acute to openly oppose the bill, but he indirectl.y labored against it, yet it was too seriously demanded, and there was no resisting public opinion, even in the Senate. This reform is one thing which Mr. Dodge’s $271,000 went towards procuring; it is only just to say, however, that no small share of the credit belongs to Mr. Schultz, who gave —what merchants are too unwilling to give, as compared with gifts of money—active personal services. This Tweedism in national administration, which corrupted politics from ■White House to caucus, and debauched pub¬ lic morals by exhibiting, on a large scale and in the open light of day, with all the pres¬ tige whicli governmental operations carry, the possible rewards of informing, as compared with the slow ones of honest industry, is brought to an end for the present. That it is quite extinct would - be too much to say, for the liberty now nearly regained was not all lost in a year, and a vigilant and firm public opinion alone will retain the position perma¬ nently. Looking back, and comparing the 266 CONGRESS AND PHELPS, DODGE & CO. new law with the old practices, it does seem incredible that such outrages as belong to a recognized tyrannical Government have actu¬ ally been permitted here in this country and metropolis. But we congratulate the whole nation on this result. THE MOIETIES REPEAL. [From tlie N. Y. Wobld, June 2Uh, 1874.] The moieties repeal bill, abolishing arbi¬ trary seizures of books and papers, having survived all attempts of prominent Repub¬ licans in the Senate to smother it, and having linally become law, the question naturally arises why the law authorizing such seizures was still retfiined upon the statute book after the oppression which it inflicted upon mer¬ chants and the corruption which it bred among Custom House agents were so thorouglily ex¬ posed b}^ Senators Bayard and Casserly two 3mars ago. The answer to this question is to be found partlj" in the combined ignorance and indifference of the mass of Republican legislators concerning all questions not of a purely partisan chaiacter, but mainly in the rich revenues produced by moieties, not only for Congressional attorneys of the Custom House but for Republican election funds. The repeal of th ■ law now is the ultimate outcome of an accident which, however pain¬ ful and expensive it may have been to the parties directly concerned, has nevertheless proved a lucky one for the mercantile com¬ munity of this city, and, indeed, for honest merchants throughout the country. The Custom House investigation of 1871-12 re¬ vealed some unusually ugly scandals, which all the whitewash wherewith the Custom House was coated by Buckingham, Howe, Pratt and Stewart could not hide out of sight. The Democratic Senators, Bayard and Cas¬ serly, were more than a match for the Repub¬ lican majority of the Investigating Committee. In fact, thejr produced testimony which com- yiletely peeled off the whitewash so assidu¬ ously laid on by the majority, and tore away the covering from the slimy tracks which led from Leet’s general order stores to the White House at Washington. The most damaging testimony given be¬ fore the Investigation Committee in 1871-72, against the New York Custom House, was by Mr. William E. Dodge, and appears in the minority report of Messrs. Bayard and Cas¬ serly, as follows; Q. Do you think that the present system tends to incfuce fraud and corruption in the employe.s ? A. I do ; I have no hesitation in saying so. Q. Have you good reason to believe that there are fraudulent transactions generally in the collec¬ tion of the revenues here ? A. I am not sufficiently informed to give an opinion; I have no hesitation in saying this: that from the standard of character in the Custom House. I would not take the average employSs into my store under any consideration, or tru.st them with my business at all. Q. By character, do you mean business or moral character? A. I mean moral character and business qualifications—both. Q. How does the present system of appointment to Custom House places affect the commercial in¬ terests of New York and the country ? A. My im¬ pression is, if character and qualifications were the standard of employes in the Custom House, that two thirds of the number now paid by the Govertiment would do all the business better than (D And as to expense? A. Equally as cheap. It cannot fail to be a charge on the commerce of New York to have its Custom House an hospital for broken down politicians. That is just what it is. There is no use in talking about it; thatis just what it is. There are men there—hundreds of thi-m— tliat I would not allow to come in my office if they would come for nothing. I would not trust them in my store to have anything to do with my goods. They are broken down politicians, skilled only in political manipulations. Eor rapidity and correct¬ ness in performing the business, and the intricate calculations necessary in the Cuistom Hou.se, a man should learn and understand it, and get the facili¬ ties. In our house we train men for particular branches of business, and have clerks who have been at the same desk for twenty and thirty years. A man who has been in the Custom House for ten years knows how to do the business, where to find the necessary papers, etc. In his place there comes a stupid, drunken, broken down, swearing fellow, whom you have to tell how to do his busi¬ ness and show where to find the papers, etc.—As- 2Wrt of 1871, 2n>- 45, 46, 47. This is plain talk, and it clears up a mys¬ tery. Mr. Dodge and his firm, like a great many other bold witnesses, were duly put in the disgrace hook, and when a year later the sp3', Harvey, trumped up the charges against the firm, the gratuitous evidence giver’s offences were sorelj^ remembered. We know the full result of this miserable business. Never before was such a peualW exacted from anj' firm, either in the western or east¬ ern hemisphere, for such trifling, paltrj^ delin¬ quencies, if at all. The moiety people and their advocates were under the impression that, inasmuch as Phelps, Dodge & Co. had been “squeezed,” thej" would be content to keep quiet. But the firm, although mulcted in the sum of $271,000 without flinching, refused to be considered dishonest by the public, and it is owing to them and their con¬ tinual explanations that the mercantile com- munit}'' wms finally and thoroughljr aroused, and the matter not only of Phelps, Dodge & Co., but of other firms, brought before the Ways and Means Committee. The mere acci¬ dent of squeezing Phelps, Dodge & Co. was the actual means of breaking up the outra¬ geous laws of 1863 and 1867. But however AN EXTRAORDINARY HISTORY. 267 much tlie House of Representatives was io- cliued to aid in the good work, the Senate, with Mr. Conkling as its leader, was by no means favorably disposed towards the Anti- Moiety Bill. Nor were the whitewashers— Buckingham, Howe, Pratt and Stewart—wil¬ ling to call a spade a spade in 1874, which they had st3'led a rose cultivator in 1871-72. But fortunately there was a Democrat in the Senate whose iron will and indomitable tact and energy overcame all dithculties. Senator Bayard was deterniined to break this great scandal up. He first secured his followers, where it was natural that he should first seek them, in the Democratic ranks, and then ap¬ pealed to the more fair and liberal Republican Senators, of whom none deserve greater praise than Senator TTadleigh. of New Hamp¬ shire, Senator Alcorn, of Mississippi, and some of the silent Senators but certain voters, such as Lewis, Tipoton and Washburn. It was by the able leadership of Senator Bay¬ ard and the unflinching patience of his follow¬ ers that this arduous fight was won in the Senate. The general results of this victory are as yet but faintly realized by Democrats, and least of aU by Democrats in their capa¬ city of free traders. In the first place it breaks up a very lucrative electioneering fund, which was a standing danger to the country ; and secondly, it introduces the small end of the wedge for the splitting up of the high tariff system. It has been proven fully and substantially, that midnight seizures and a brigade of spies cannot stop smuggling and under valuation as long as a high tariff system exists. The only method of giving the death blow to extensive under valuation lies in reducing the tariff to such an extent as to make smuggling unprofitable. Extensive un¬ der valuations cannot bo made vvithout collu¬ sion, and this costs monejn Those conver¬ sant with the mysteries of this dark art affirm that smuggling costs from 8 joer cent, to 10 per cent, of the value of the smuggled goods. This pays well enough when the duty is 60 or 90 per cent., but it is obvious that if the duty is reduced to a basis of 15 or 20 per cent, the under valuations made by collusion, and costing from 8 to 10 per cent., will be found an unprofitable business. It is obvious that all honest advocates of a fair tariff have gained the outposts of a fortress that will be assailed and carried in the Forty-fourth Con¬ gress, when a Democratic House will have a Democratic chairman on the Ways and Means Committee. As to Butler’s tirade, however effective it may' prove in giving notoriety to the scandalous defects of the present tariff sys¬ tem, that was merely a hootinp- and yelling raised after the real battle had been fought and won under Democratic leadership. More- over, Butler’s blunders of statement are mon¬ strous, as we shall show another day. SUMARY OF ALL THE PROCEEDINGS IN THE CASE OF PHELPS, DODGE & CO. BY Hon. DAVID A. WELLS, Laie Commissioner of the Treasury. Although there was, probably, not a newspaper througliont the whole length and breadth of the United States which did not, during the years 1873 and 1874, discuss repeatedly, and to a greater or less extent, the case of Phelps, Dodge & Co., and the relations of this firm with the Federal Government, yet there was not at any time during this whole discussion anything like a full, clear and connected history of the exceedingly curious transactions under consideration ever brought before the public. The time has now, however, arrived, when such a statement can be made; and although not in any degree needed for the vindication of the firm, whose entire and honorable acquittal of all the charges brought against them was, after full investigation and discussion, substantially embraced in the repeal, by a nearly unanimous vote of both Houses of Congress, of the so-called “ moiety” and '• seizure ” laws of the Customs, as they existed in 1873, and under which the proceedings in question against the firm were instituted, yet the importance of a succinct and popular narration of the principal involved circumstances, considered either as a contribution to the political history of the “ times,” and to the cause of economic science generally, cannot well be over estimated. To premise, the firm of Phelps, Dodge & Co. is one of the oldest in the United States, and in the magnitude of its special business—dealers in metals—perhaps without an equal in the commercial world. During the whole period, moreover, of its long history—extending now over three generations—the character of this great house for enterprise, probity and liberality, had come to be regarded by nearly all that portion of the American people conversant with commercial affairs, as somewhat in the light of a standard, witli whicli comparisons might be instituted, but which, in the experience of actual every day life, it would be exceedingly difficult to surpass, or indeed to find an even and exact parallel. In short, it is no exaggeration to say that no firm in the United States, acting either collectively or through its individual members, has endeavored more con¬ tinuously and practically to carry out the principle.that abundant means and large opportunities for influence were in the nature of trusts, to be administered for the benefit of humanity, rather than for the promotion of AX EXTRAORDINARY HISTORY. 269 ftrictly personal interests ; or wliicli, in accordance with such a principle, lias linked its name, by so many substantial tokens, to so many religious, educational, patriotic, industrial, or commercial enterprises. And yet, this was tliefirm and these were the men against whom, in the year 1813, the whole power of tlie Federal Government and no small share of public opinion, seem for a time to be actively enlisted for the twofold purpose of crusliing and dishonoring. The remote inception of this affair can, undoubtedly, be traced back as far as the year 1811, wlien Mr. William E. Dodge, senior, then President of the New York Chamber of Co?nmerce, went, on invitation, before a joint select Committee of Congress and gave testimony very disparaging to the manner in which the business of the New York Custom House wa.s admin¬ istered.* This testimony was the occasion of much offence, at the time, to The foUowiag is substantially that portion of the testimony of Mr. Dodge, given before the Congressional Committee, which was regarded by the Federal officials connected with the Custom House as particularp- dam,aging and ofifen.sive : Committee. —Q. Do yon think that the present system tends to induce fraud and corruption ill the employes ? Jlr Dodge. —A. I do ; I have no hesitation in saying so. Q. Have you good reason to believe that there are fraudulent transactions generally in the collection of the revenues here ? A. I am not sufficiently informed to give an opinion: I have no hesitation in saying this : that, from the standard of character in the Custom House, I would not take the average employe.s into my store, under any consideration, or trust them with my business at all. Q. By character do yon mean business or moral character? A. I mean moral character and business qualiflcations, both. Q. How does the present sy.stem of appointment to Custom House places affect the commercial interests of New York and the country? A. My impression is, that if character and qualifications were the standard of employes in the Custom House, that two thirds of the number now paid by the Government would do all the business better than it is done ■ Q. And as to expense ? A. Equally as cheap. It cannot fail to be a charge on the com- oerce of New York to have its Custom House a hospital for broken down politicians. That is just what it is. There is no use in talking about it; that is just what it is. There are men there—hundreds of them—that I would not allow to come in my office if they would come for nothing. I would not trust them in my store to have anything to do with my goods. They are broken down politicians, skilled only in political manipulations. For rapidity and correctness in performing the business, and the intricate calculations necessary iu the Custom House,> man should learn and understand it, and get the facilities. In our kouse we train men for particular branches of business, and have clerks who have been at the same desk for twenty and thirty years. A man who has been in tlie Custom House for ten years knows how to do the business, where to find the necessary papers, etc. In Ins place there comes a stupid, drunken, broken rlown, swearing fellow, whom you have to tell kow to do his business, and show where to find the papers, etc.—Deport of 1871, pp. 45, 46, 47. 270 CONGRESS AND PHELPS, DODGE & CO. certain parties, who conceived that their official conduct was thereby pub¬ licly criticized ; and subsequently the original offence was further deepened and aggravated by the reading, in the course of a debate in the Senate of the United States (3d Session, 41st Congress, 1870-71), of an extract from a private letter, written by Mr. \V. E. Dodge, Jr., in answer to inquiries put to him by a senator, touching the necessity of reform in the same special department of the Civil Seiwice of the Government. The extract from the letter thus referred to reads as follows : There are three classes of clerks in the New York Custom House on whom devolve its working. Firsi .—The fewest possible number of older clerks, kept as experts, from the sheer necessity of having some experienced hands to attempt the guidance of official routine. These poor fellows are kept in a constant state of terror, never able to n.ake any plans for the future of themselves or their families; never knowing when their instant dismissal may come. They are obliged to consort and drink with the political hacks placed in their bureau ; contribute from their small income to election frauds, witn no hope of advancement, no stimulus to more faithful work, no provision in case of illness or old age. They fear to communicate their knowledge of details, knowing the moment it is learned by others they will lose their own place. They are obliged to invent more and more intricate means of conduct¬ ing business in order to throw a mystery about their work and preserve their own importance. They are a sad, unhappy set, witli no pride or ambition. Secondly. A small class composed of incapables and shiftless persons, who have never succeeded in anything, and never will, and who have some family or personal hold on people of large political influence. These are pushed into the customs as into a hospital or safe harbor. They do very little work, and are not expected to do anytJiing but to draw their pay with exact and beautiful regularity, to act as figure head.s at Ward primary meetings, and, in a feeble and helpless way, to cheer on the fortunes of the particular senator to whose ^kirts their friends happen to hang. Thirdly.—The large class forming the great bulk of the clerks, filling to repletion all the old departments, and for whom new departments are made; this class, in order to give positions to which political jugglers rack their ingenuity to make places, invent all sorts of intricacies to turn simple business forms into problems which ordinary minds cannot under¬ stand, so that some who have done the party service can have a desk at wliich entries can be rechecked and examined again and again in hopeless confusion. These are the men who have been the sly workers in local caucuses, the noisy men in local elections, who have worked and drank for years, who have a “hold” upon some higher officeholder, or Congress man or Senator, and must be provided for. For this reward of their faithful services°they have looked forward for a long weary time, and they must make the most of it. They cannot expect to stay long in their offices, and their duty to themselves and their families, as they see duty, compels them to make the most they cau. Tlie slightest fitness for the post or adaptedness to the work is not thought of for a moment. They do as little work and get the most they can, and yet they are not happy. Each clerk represents a dozen but equally deserving but disappointed political workers who had tried for the same place, and are constantly plotting to undermine him. In old times a man had a fair chance to hold through the Administration, but now his tenure is only good until the “ friends ” of the “ other Senator” get the upper hand. The chaos and confusion growing out of such working materials can be easily understood, especially when you add the fact that the collector is AN EXTRAORDINARY HISTORY. 271 expected to use most of his time in political manuamvriug, and the tariff under which they act is now, Avith the A-arious rulings under it, the most complicated ever known, and the system of drawbacks intricate beyond description. Can you wonder that the voters of the Republican party, Avho are for the most part among the thoughtful and intelligent people, lose their confidence in an administration which, in a time of debt and depression, allows the most vital points of its financial machinery to be used for the gain and for the squabbles of Ioav politicians, who in any other sphere Avould not be trusted a moment.”— Apjiendiz to the Globe, part 3cl — 'id Session 41s< Congress, ISTO-Il, p. 56. The warrant for the hypothesis that the testimony thus given by Messrs. William E. Dodge, senior and junior, to members of the Congressional In¬ vestigating Committee, in 1870-71, had more or less of connection with and bearing upon the proceedings subsequently instituted against the firm of Phelps, Dodge & Co. by the same Custom House ofScials whose con¬ duct was criticised, is to be found in the circumstance that threats were openly and repeatedly made at the time by persons connected with the Government against the firm for the course which they had taken ; and that the members of the firm were also repeatedly warned by friends occu¬ pying positions affording opportunities for obtaining information, that punishment would be inflicted in retaliation, against their House, for the testimony of its members, in case a favorable opportunity for so doing should be afforded. In answer to an inquiry on this subject, a member of the Custom House Investigating Committee, on the part of the Senate ot the United States in 1870-71, who was, perhaps, more conversant with the whole business at the time than any other member of Congress, also writes, under date of February 20th, 1875, as follows : , “This letter (the one of W. E. Dodge, Jr., referred to) and the testi¬ mony of Mr. Dodge, I cannot doubt, have been the cause of his subsequent troubles. “The same men (whose official conduct was criticised in the testimony and letter) set spies upon them, and took advantage of acts of which they were ignorant and innocent to compass their revenge. In addi¬ tion to this, they furnished an opportunity to strike at the integrity of professedly Christian merchants. How could such an opportunity be lost?. What right has a Christian to enterprise or thrift?” Whether the views thus expressed arc in all respects warranted may be a question. The presumptions are, however, all in favor of their correct- boss ; but whether they are or are not warranted, the opportunity for re¬ taliation and persecution, to those who undoubtedly desired it, even if they did not actively seek it, soon presented itself ; and the method ot its origination and the incidents of romance and rascality connected with its working up and development, constitute a chapter alike in real life and 272 CONGRESS AND PHELPS, DODGE & CO. mercantile history for wliich it wonld be most difficult to find a parallel. What constituted this opportunity, and what were these incidents, it is next in the order of this narrative to relate. As already remarked, the business transactions in metals of the firm of Phelps, Dodge & Co. are of great magnitude. It should also be added, that these transactions are not confined to the territorial limits of the United States. And it accordingly happened that during the early summer of 1872 negotiations were commenced by the firm with certain large manufacturers in Russia for the purchase, for a term of years, of the entire annual pro¬ duct of a specialty of metal fabricatiou. As the project, furthermore, from the amount of capital and liability involved, was one of no little risk and of great importance, the entire discussions and correspondence relative to it were made in the highest degree confidential, and, at the proper time, a member of the firm was sent to Europe in order to perfect and complete the arrangements. But the steamer which bore him had hardly taken its de¬ parture when the firm was waited upon by a competitor in business, who, after making known his acquaintance with the proposed contract and its conditions, as well as the sailing of the partner referred to, preferred a de¬ mand for participation for himself and others in the enterprise, accompany¬ ing it at the same time with a threat that, unless the terms were accepted, “he would burst the whole business.” It is only necessary to say that the demand was at once resented, and its author treated as he deserved. But the revelation that what were supposed to be business secrets in the firm had become known, and the further fact that an attempt was subse¬ quently made in Europe to make good the threat uttered, led to an inves¬ tigation, when it was ascertained that for some time previous it had been the practice of certain reputed respectable New York metal brokers and merchants to visit the store of Phelps, Dodge & Co. secretly, and at night, for the purpose of inspecting their letter books and invoices, using this information in their own business, and communicating it to others in the same trade. This arrangement was effected and carried out by the direct bribery and purchase of certain dishonest clerks and watchmen, who, in the first instance, acting in accordance with instructions received from the outside parties, kept back and secreted the books, which, at the close of each day’s business, it was their duty to deposit and lock up in the safes ; and, secondly, at a late hour of the night, when all the partners and the honest clerks had retired to their homes, unlocked the doors of the store and the counting rooms, and gave free admission to their co-conspirators to the premises. An arrest and prosecution of at least one of the principals concerned in these disgraceful transactions immediately followed. On the trial the AN EXTRAORDINARY HISTORY, 273 (Tuiltwas fully proved, but tlie jury disagreed as to ubether llie crime was burglary" or larceny. But in the course of the trial it came to light that among the employes rvho had been guilty, from mercenary motives, of betraying the trust confided to them, was a clerk who, to the sin of dishonesty, added the deeper one ot ingratitude. This man, a creole Frenchman or Spaniard, of supposed \Ve?t India origin, had been given employment in the outset, when not needed, by a member ot the firm, simply out of compassion for his utter poverty and friendliness—and had subsequently been educated, promoted on a liberal salary to the position of assistant invoice clerk, and even retained in position when ill health had almost entirely incapacitated him from any useful and efficient service. This rascal—for such is the only proper term that can be applied to him ; who, by the way, it should be stated had gained admission to the store at night under the plea of serving his employers by bringing up his arrears of copying-foreseeing as the result of the legal investigation that his own , dismissal from employment would be one certain issue, took immediate steps to secure himself against any contingent detriment by assuming the role of an informer ; and having, in his capacity as assistant clerk, become acquainted with certain invoice irregularities, in place, as was bis duty, o informing his employers, stole the documents in question and put lum- selfin communication with the Custom House officials. As to the manner in which he operated to make his stolen capital avail able, it is sufficient to say that men of high standing in the legal profession were only too ready to engage, for a share in the spoils, in the woik of lunt ing down an old and leading firm of New York merchants, and by such the case was worked up and placed in the hands of the Custom House detectives. Such, then, is a succinct history of the events that preceded the mitia- tiou of proceedings on the part of the Government of the Lnited States through its agents, against the firm of Phelps, Dodge & Co., for alleged violations of the laws for the assessment and collection of the customs revenues ; and although the events in question have become matteis o past, and in tl.e whirl and rush of busy life have already become almost fotBotten, yet it is worth while to here renewedly bring them befoie the public, and in the same connection to put this question ^ ow ^ munity which tolerates such a dry rot of all manliness as « mvolved m the above record, and kindly allows the mantle of oblivion to fall on the actors in such contemptible transactions, can legitimately proless to be mo™'. even civilised? Or. in the face of such precedents, wl.a probability s there of New York City speedily becoming the eommereiitl centre of tlie world’s exchanges, the continued recipient o oreign capl a , or a entrepot of the commerce of all nations? 274 CONGRESS AND PHELPS, DODGE & CO. The foundations of the case having been thus laid, it might naturally have been presumed that the Government, in taking charge of future pro¬ ceedings, would, on account of the magnitude of the issues involved, have, before making public accusation, at least afforded through the collector, as chief revenue official of the port, reasonable opportunity for the parties suspected to know whereof they were charged, and to present in private any explanation which they might,have to offer ; and this more especially when it might have been remembered that the firm about to be arraigned had, through its long business existence, paid into the Federal Treasury, on account of customs duties, a sum in excess of fifty million of dollars, with¬ out any previous offence, controversy or pretence of irregularity, and without so much as a shadow of an imputation on its integrity. Such, however, was not the course followed ; but, on the contrary, every,pos¬ sible precaution was taken to prevent any information coming to the firm in respect to the proceedings contemplated against them, until the proper time having arrived, they were summoned, not to the,office of the Collector, but, to use the language of Mr. Dodge, senior, before the Committee of Ways and Means, “to a little dark hole, lighted by gas,” in the basement of the Custom House, and there confronted with the chief of the detective service, whose portrait and customary surroundings were thus graphically described by Hon. James B. Beck, of Kentucky, in his speech on this sub¬ ject before the House of Representatives : “ This picture, Mr. Speaker, needs no filling up. It stands out on the canvas. The detective toying with handcuffs, putting them on his own wrists, to let the doomed man see how they worked; telling his victim what a wicked fellow he had been; holding up to him the terrors of the law; changing his tactics according to the subjects with which he had to deal; urging frank confession as the safest and best course, furnishes such a por¬ trait of the prostitution of every principle of justice and law that it disgusts a man to think of the scene.” The summons to the place described having been responded to, the head detective, Mr. Jayne, whose portrait and usual method of proceeding have been above depicted by Mr. Beck, opened the case by informing the representatives of the firm (Mr. Dodge, then President of the N. Y. Chamber of Commerce, and Mr. James) that they and their associates had been for years engaged in deliberate attempts to defraud the revenues ; that they had systematically committed perjury, and had repeatedly made use of false and fraudulent invoices, and that the penalty for each of the offences specified, which involved perjury, was two years’ imprisonment, a fine of five thousand dollars, and a forfeiture of all the merchandise thus irregu¬ larly imported, And although Mr, Jayne declared that the Government AX EXTRAORDINARY HISTORY. 275 had full evidence to sustain all that he had charged, he nevertheless con¬ cluded by demanding of the firm that they should surrender unreservedly their private books and papers, and, at the same time, exhibiting a warrant obtained from the U. S. District Court, authorizing him or his deputies to search for the same, and, when found, to seize and take possession. Of course, charges of this nature, involving loss of merchandise, credit, personal reputation and degradation, coming thus unexpectedly, fell upon the representatives of the firm like a thunderbolt from a clear sky. They were, however, at once met with an unqualified demand and challenge of proof, and, conscious of entire innocence, the offer was also immediately made by Mr. Dodge and his associates to waive all service of the warrant, and to place all books, papers and facilities freely at the disposition of the- officials for the purpose of investigation. The offer being accepted, Mr. Jayne, with a retinue of deputies, next repaired to the store of the firm, where, producing a list of what he wanted—invoice books, cash books, letter books and papers (all carefully prepared for him by the dishonest and discharged clerk)—possession was ostentatiously taken of the same, and, on a cart backed up to the front door, they were loaded and carried away. All records of the business transactions of the house being thus placed beyond the control of its representatives, and the most formidable obstacles in the way of the establishment of their innocence being thus at the same time created, the next step was to proclaim, through the press, the guilt of the firm, and to so magnify the case as to make settlement on easy terms, which the detectives and informers might offer, or absolute ruin, the only now possible alternatives. And this was done so thoroughly and so systematicallv, and before any adeejuate opportunity could be afforded for the parties accused to offer anything in the way of defence or explanation, that the great mass of the public w'ere for a time almost persuaded that the accusations and rumors in question must have some real and truthful foun¬ dation ; the work of disseminating calumny and defamation being nearly equally participated in by the officials, who, under the then existing system of moieties, expected to share in the future plunder of the rich firm; and by the principals or sympathisers of the association of business rivals, who, in the manner before described, had contrived to enter surreptitiously and at night the premises of the firm, and rob them of what was equivalent to wealth—namely, the secrets of their most important commercial trans¬ actions. It is said of some animals that, when one of their number is wounded, the remainder make the misfortunes of their comrade a signal and an occa¬ sion for turning upon and devouring him. That a propensity something akin to this exists also among men, would seem to find proof in the circumstance 276 CONGRESS AND PHELPS, DODGE & CO. that, as soon as the firm were arraigned before tlie public by the press, at that same moment they began to be the continual recipients of all manner of anonymous and abusive letters ; the fact that one member of the firm was President of the Young Men’s Christian Association, and that others had been prominent in the Presidental canvass the preceding year, or had been positive and open in expressing their opinions on the subject of temperance, or the Sunday laws, seeming in many instances to furnish the animus for the pt culiar attacks referred to, rather than the existence of any difficulty with the Government. In one instance an editor of a religious journal wrote that he had become convinced, from Avhat he had seen in the papers, ■ that much or all of the property of the firm had been acquired dishonestly; and that, therefore, he should feel bound to recommend to all of his brethren who had received aid from the members of the firm, in behalf of religious, charitable, and educational objects, to forthwith return the same, saying, as Peter said to Simon the sorcerer, “Thy money perish with thee.” It is safe to say that if the advice, which the writer felt it thus incumbent on his conscience to offer, was in reality ever given, it was never adopted b}" those who received it, and of the tens of thousands which had, as indi¬ cated, been given, not one dollar for any cause ever came back to the donors. As time went on it was further found that the members of the, firm were under constant surveillance. Letters came through the mails having all the appearance of having been opened or tampered with ; and in at least one instance, the contents of letters written to Europe were substantially communicated to one of the legal advisers of the firm before the letter could possibly have reached its destination. Suspicion being thus aroused, a watch was set, and an employe, supposed to be faithful, was at once detected in opening and destroying the contents of a letter intrusted to him for delivery at the post-office ; the torn fragments, which happened to be of no consequence, being so carefully collected by the detective from the street, as to admit of the entire reconstruction of what was written in the unimportant missive. Speaking of the espionage by which the firm at this time had reason to believe themselves to be surrounded, Mr.William E. Dodge, senior, in his remarks before the Committee of Ways and Means, also said : ‘‘We found ourselves dogged by spies every step that we took. We could not have a meeting of our partners in one of our dwellings at night without it being known in that dark liole the next morning. We could not do anything at our store without its being known; we could not have our partners or our lawyers in our private office without its being known. I -will relate an instance of this: my partner, older than myself, has been in the habit, for twenty years, as January came round, of opening his desk and clearing it out, some rainy day, of the accumulation of papers which it contained, throwing them on the floor, and having a boy put them in the fire and burn them. He did so on the 8th or 10th of January, AN EXTRAORDINARY HISTORY. 277 and-witMii a half an hour wo received a letter from our attorney to come quickly to his office We went up there, and he said, ‘ What in the world is the matter ? Jayne is tearing abou t in a terrible way. He says that Phelps, Dodge & Co. are burning their paper.s, and that he will have every one of them in Ludlow street jail before night.’ How did ho know it? How did he know that these papers were burned up ? Because he paid a man in our store to gu e him information. He had our second book-keeper in his employment. What he paid him I do not know, but that he Avas in his employment I do know. We traced that fellow and turned him out of our store. And where did ho go when he Avas turned out? Where should he go? He went where he was employed. And Avherc is he to-day? He is clerk m the Post-office, in the money department—a place obtained for him by tlie .special agent of the United States.” One instance more of the extraordinary and scandalous elements that were invoked in the course of these transactions, for the purpose ol per¬ secution and intimidation, may also be cited. Pendinjr tlie ultimate settle¬ ment of the case, as made up against the firm by the officials of the Fedeial Government, it came out that there was in the possession of the legal counsel retained by the dishonest clerk and informer a package of letteis wholly relating to private or social matters, and having no connection what¬ ever wdth the matters at issue—wdiich had been stolen from the desk of one of the junior members of the firm, either by the clerk referred to or by the persons who, under his auspices in part, had been in the habit of rummug- ing the store of the firm at midnight. The control of these letters was from the outset made no secret ; nay, more, they were spoken of unblu.shing } , from the very first, as an agency by which money was to be extorted; and the members of the firm and their legal advisers were distinctly notihec that if the terms of settlement to be dictated by the moiety luinter.s and informers were not promptly acceded to, that then the letters s ion c e immediately made public. . , p i • If this statement seems to the reader too monstrous for belief, he is le- spectfully referred to the testimony of B. G. Jayne, and also to an artic e from the N. Y. Graphic, given on pages 62 and 63 of this volume nc as further illustrating the mental idiosyncracies of the men who, un or a lec and republican form of government, follow the trade o tie sp> an informer, it is to be noted that, when Jayne was before the Congressional Committee of Ways and Means, he claimed that it was a mattei ^ to his credit that, after the letters in que.stion had been u.sed BiifhcieiiGy long as agencies of annoyance, he finally interfered to prevent their pnbl.ea- tion and that, after they had been read by Ge„. Butler and o h a aourpelled their restitution to the person front whom he knew hoy had been stolen ; a claim just as legitimate as would be that of a grand .nqu.s.to. to the attribute of mercy, on the ground that he always strangled h,s v.ct.n.s before roasting their bodies. 278 CONGRESS AND PHELPS, DODGE & CO. And all this terrible and unscrupulous use of power, it may be further added, not for the purpose of vindicating and sustaining the law—for, as it was ultimately and satisfactorily shown, the offences committed were merely technical and insignificant—but simply and purely to extort money from a firm which was known to value their good name and reputation as something above money, and, therefore, in the slang parlance of the ring, could be made “to bleed freely.” ^leantime, the examination of the books and papers removed from the store to the Custom House went on under the personal supervision of the detectives whose pecuniary interest it was to allow no irregularity to escape them—aided also by the dishonest and discharged clerk, whose acquaint' ance and familiarity with the books, while in the employ of the firm, was made the basis of the information on which the federal officials originally commenced proceedings. A pro forma suit against the firm for a million of dollars having been also instituted, the idea for a time became current with the public that this sum represented the amount by which the Government had been defrauded; and later, when a compromise or settlement had been effected, that $211,000 was the correct figure. When, ho'\ ever, the results of this critical and minute investigation on the part of the Government were made known (which was not until after the firm had been induced to agree to a settlement), the following facts were found to have been estab¬ lished : 1st. The range of investigation entered upon covered aperiod of five years of business transactions by the firm of Phelps, Dodge & Co. 2d. During this period the aggregate invoice value of the merchandise imported by the house was in excess of $30,000,000, on which the duties paid amounted in the aggregate to between six millions and eight millions of dollars. 3d. Out of the whole number of invoices representing this enormous importation the Government selected about fifty, which, it alleged, were vitiated by reason of the under valuation of certain items embraced therein. The total amount of these invoices was $1,750,000. 4th. The total invoiced value of the items claimed to have been under valued was $271,017.23. 5tii. The total amount by which these several items, aggregating $271,000, were claimed to have been under valued, was $6,658.78. 6th. The total amount of duties claimed to be lost to the Government by reason of such under valuation was $1,664.68. How these irregularities, which the Government was pleased to term under valuations, occurred, has been so clearly and satisfactorily set forth by Mr. Dodge, in his address before the Committee of Ways and Means of the AN EXTRAOKPIXARY HISTORY. 279 United States House of Representatives, Marcli, 18'14 (see pages 11-20), and also in the statement made by the firm to the public in April, 1873, tliat it is unnecessary to here again enter into a minute detail of explana¬ tions. But, in a few words, they may be stated to have been due to a neglect on the part of the invoice and shipping clerks in Liverpool to make the prices of certain exceptional articles (unusual sizes of tin plate of comparatively small value) contracted for, months in advance of delivery and shipment, agree with the market prices of similar articles on the day when the invoices were prepared, and the merchandise placed on board the vessels for transatlantic transportation ; the United States customs laws and regulations requiring that goods intended for importation into the United States shall be invoiced at their market value at the time and place of shipment, while in actual practice it is the rule to assess the duties on market value only when it is in excess of actual cost, but on actual cost when it is in excess of market value. Now, it never was pretended by the agents of the Government that this rule in respect to market value had been regularly and systematically violated by Phelps, Dodge & Co. in their importations, but, on the contrary, it was admitted that the cases in which any irregularity occurred were very few, wholly exceptional, and covering but a very small amount in value. Thus, for example, in one of the vitiated invoices the whole amount of alleged under valuation was $47.31 on a total invoice value of 822,318.81 ; on another, $47.31 on an invoice aggregate of 817,316 ; while on a further case of total shipments of the invoiced value of 8167,536.18, the utmost loss claimed by the Custom House officials to have been experienced, and for which it was proposed to confiscate the whole, was $162.23, or about the amount of wages which the firm would have paid during the same time to the head porter, or to an under clerk. On the other hand, a careful examination of the seized books and papers, after they were returned by the Custoni House authorities, showed that during the year 1872_the year in which the bulk of the undervaluations were charged to have occurred, and which was a year of great fluctuations in prices—the firm, in their anxiety to strictly and scrupulously conform to the law, had so often and so largely advanced the price of their shipments over actual cost, to meet the temporary requirement for market value by reason of such fluctuations, that they paid to the Government many thou¬ sands of dollars more than they would have been required to do had the goods been invoiced and shipped on the day on which they were made the subject of contract. So that, while in reality the Government cannot right¬ fully claim to have lost a dollar through the importations of the firm of Phelps, Dodge & Co., it is at the same time liable to the just imputation of 280 CONGRESS AND PHELPS, DODGE & CO. having taken an advantage of a technicality of law to exact many thou¬ sands of dollars from the same firm, in excess of what it could have taken had the law been framed on the strict principle of equity and common mer¬ cantile fairness, or had their goods in all instances been shipped at the time they were actually purchased. A mere plain statement of the case, as the Government ultimately were obliged to state it, and as the interested partisans of the Custom House were obliged to confess it, was therefore equivalent to a reductio ad absur- dam, and was almost unanimously so accepted by the public the moment the public clearly understood it. It would be, moreover, almost impossible to find a more striking illustra¬ tion of the fickleness of that great arbiter of human actions—public opinion —than the following sequence of occurrences. In December, 1812, suit was commenced against the firm of Phelps, Dodge & Co. by Hon. Noah Davis, U. S. District Attorney, for defrauding the customs revenues. In January following this suit w as discontinued and the case settled. In May, the case in the meantime having been fully explained, the merchants of New York testified to their opinion by unanimously reelecting Mr. William E. Dodge, the senior partner of the firm, to the first place in honor in their gift, namely, that of President of the N. Y. Chamber of Commerce; and at the annual banquet of the Chamber the next year (May Ith, 1874,) the Pre¬ sident, having the former District Attorney on his right, with immense applause addressed that gentleman in the following language: “ We had anticipated the pleasure of haying onr highly honored Chief Magistrate, Gov. Dix, respond to the next toast, but a telegram has been received expressing his regret that the pressure of public duties will not permit him to be present. T shall ask a gentleman to take his place who has honorably filled many high positions in onr Stace, and has recently commended himself to the esteem of onr best citi/.ens by his honest and impartial trials and condemnations of the men who had so long plundered our city government, though he has also secured the enmity of those who sympathized with their crimes. He has also taken a noble stand in the effort to secure to our merchants a revision of our revenue laws. I will call on the Hon. Noah Davis.” Thus called upon, the former prosecuting official of the Federal Govern¬ ment responded in a speech from wliich the following is an extract: “ You have alluded, Mr. President, to the case of your own house. There is an old saying among lawyers that hard cases make bad laws. That is true of the decisions of courts. But in practical life hard cases make good laws, for they arouse the attention of the community to evil laws and compel their abrogation. The blood of the martyr is the seed of the Church! Not unfortunate will it prove if the seed from which springs regenerated laws shall be found to have been poured out in the blood taken from your veins. Denounced as I have been for having certified, solely through a sense of justice, that while doing acts which were clearly violations of the law, and thus subjecting you to heavy penalties, you and your house were AN EXTRAORDINARY HISTORY. 281 free in opinion, from all intention of defrauding the Government, I still hold to tliat opinion as the exact demand of truth and justice toward yourself. I have never, on any occasion or under any circumstances, expressed any contrary opinion.” Bat notwithstanding the result to which the critical examination of the seized books and papers of the firm had led the Government, the suit and tlieproceedings against the firm were not discontinued; but, on the contrary -and as was natural, considering the motive which actuated the officials interested—were pressed more vigorously, resulting finally in a compromise between the Government and the firm, by which the latter paid to the former the sum of $271,017.23, the amount of the several items said to have been under valued. Now, whv, under the circumstances, this compromise was agreed to by tbe firm of Phelps, Dodge & Co.; why the large sum indicated was paid ; and why the proceedings commenced in the United States courts were not allowed to run to a judicial conclusion, has ever been regarded by no small part of the public as one of the most extraordinary and unaccountable things connected with this whole bu.siness. The matter, however, admits of a full and satisfactory explanation, and to this explanation it is now pro¬ posed to ask attention. In the first pilace, it must be borne in mi 11 d that the facts as above detailed. respecting the exact manner in which the irregulaiitie.s on which the Go\ .rnmert based its proceedings, ocerred, and the comparatively ms,gm6can sum which, under the worst hvpolhesi.s, could be claimed to have beeu ost to (he customs revenues, were not made known to the firm or to the public sttlietimetbiseompromi.se or .settlement was effected; and, for the most obvious reasons, it was never intended that they should he known iiuti he Isrgest possible sum bad been extorted from the firm, and the moiety of the plunder allowed by law bad been divided among the ofiieial “ssoc.ates Iswyers, spies, detectives, and professional informers. The books and papers otthe house were in tbe close po.ssession of the Custom House “ No statement of specific charges were ever presented by the at no time was the firm ever able to have a complete list ot tlie “ the items of tbe invoices in respect to wliieb it was alleged that unde. valuations had occurred. Uoinno- And at any examinations of tbe. books and papers . crarxi-ocpTitino’ it wus cvcr invited to present , ioo- to the firm or in any wav repiesentuio ib, i s to tne tirm, „ continually represent to but, at the same-time, special pains w that , , tlip firm bv private conversation, tnat the nublic tbrou"-li the press, and to tne mm uy me puoiic rnio ,, I without any mitigating circumstances, the case was a most atrocious one, J P„a+prn TTnncie and, in point of magnitude, something without a parallel m Custom House experience. 282 CONGRESS AND PHELPS, DODGE & CO. Again, under a strict construction of the laws then regulating importa¬ tions, the least taint in any item of any invoice subjected not only the items but also the entire invoice to confiscation, even though the under valuation of the item amounted to only five cents, and the entire valuation of the invoice should be in excess of a half a million ; and if the case had been carried to the courts, the question of intent to defraud was not one for the courts to consider, but was a matter reserved exclusively for the Secretary of the Treasury to pass upon, if application following judgment should then be made to him for a remission of penalties ; and as this point is most important, for a full appreciation of the situation of the firm, refer¬ ence is here again made to Judge Davis, who, in his speech at tlie banquet of the Chamber of Commerce before referred to, laid down the law as fol¬ lows : “ Where an act forbidden by the statute is knowingly done, though in ignorance of the law, and even in supposed compliance with it, if a loss of duties is the result, the question of actual intent to defraud is not important, in a legal sense, until the case, after judgment, reaches the Secretary of the Treasury on application for remission—which he is only per¬ mitted to grant where ‘ intentional fraud ’ or ‘ wilful negligence ' have not occurred.” To enter into court confessing a technical, though unintentional viola¬ tion of the statute, would be, therefore, to incur the risk, or rather to face the certainty of a pro forma decree or judgment confiscating the entire value of all the Invoices which contained any items under valued to even the smallest extent. And in this connection it is important to recall what has already been stated, that the value of these several invoices amounted to the large sum of $1,*150,000; and the value of the several items embraced under them, which were claimed to be under valued to $2*11,01*1.38, but that on these items, by the Government’s own showing, the under valua¬ tion, accruing through a period of months, was only $6,658.*18, and the maximum loss of duties, $1,661.68 ; no allowance being made for duties overpaid during the same time as the result of over valuations. A decree or judgment of the court confiscating the full value of the invoices, $1,*150,000, being once entered, the determination as to whether the judgment should be enforced in whole or part became a matter wholly dependent on the pleasure or arbitrary will of the Secretary of the Treasury. In most countries—even the most despotic—where the reputa¬ tion of the great merchants is a matter of pride alike to governments and people, and where to foster the reputation and business of great com mercial houses is regarded as equivalent to strengthening national resources and national revenues, an appeal to a high officer of state invested with full powers, under such circumstances as have been detailed, for an abatement AN EXTRAOKDINARY RTSTORY. 283 or entire remission of penalties might have been made with no apprclien- sion as to the nature of the decision. But in the United States, wliich claims to possess the most free and enlightened of all forms of government, it must be confessed with shame and mortification that the situation was sueli, in 1872-3, that few, if an}', sagacious merchants could be found to entertain the opinion that, in an appeal to the Treasury, in a confiscation case involving one million seven hundred and fifty thousand dollars, a de¬ cision would certainly be obtained in consonance with the most obvious principles of ordinary fair dealing and equity. And if to any this judg¬ ment may seem harsh and unwarranted, their attention is asked to the following circumstances; Soon after the accusations were publicly preferred by the officials against the firm of Phelps, Dodge & Co., and a formal prosecution had been com¬ menced against them in the courts, the representatives of the great house repaired to Washington to present their case to the federal administration. Considering the former high standing of their firm, the immense amount previously paid by them to the Government in a long series of years in the form of duties, without any dispute or controversy, and the further fact that a majority of the individual partners of the house were not only politically allied to the administration, but had been among its mo.'^t devoted and substantial supporters, the representatives in question, in their difficulties naturally expected a sympathetic and generous consideration. But this was not to be. Justice at Washington, in view of the possibility of distrib¬ uting a moiety of ^1,750,000 among some eight or ten prominent office¬ holders and their counsel, was never less inclined to be tempered with mercy; and while the cold advice was given not to compromise and settle with the Custom House officials, but to refer the case to the slow action of the courts, the intimation was also conveyed, in no dubious language, that in all these matters the Treasury regarded the interests of the Government and the interests of the merchants as diametrically opposed to each other; as if there could be one interest for the Government and another for the people, or as if it was the correct policy of the Treasury Department to antagonize itself as a rule with the great business interests ot the country and their legitimate representatives. Take, also, another fact. At the very outset of this case, or ^oon as it l^ecame apparent to the Custom House officials and their allies Hiat a placer” had been struck, rich beyond all precedent in its capacity or taken to work it most thoroughly. plunder, the most extraordinary steps were For this’purpose the discharged clerk and thief, who was the original in¬ former (but for whose name in the “ information e t le ”aine o . . Jayne was substituted), employed three lawyers ,n the City of New York, 284 CONGRESS AND PHELPS, DODGE & CO. all men of ability, but in whose estimation, their acts being the criterion, money was more valuable than a good name. In illustration, attention is here asked to the following extract of the report of the testimony of B. G. Jayne, when under investigation before the Committee of Ways and Means, U. S. House of Representatives—Mr., Sheldon, of Louisiana, and Mr. Beck, of Kentucky, being the examiners : Mr. Sheldon.— "Who was the money given to ? A. It was awarded to me. Q. By the Secretary? A. Yes, sir. Q. How could he award it to you if he knew the other man was the informer ? A. I reported the case, and there was no adverse claim. It belonged to me, if there was no adverse claim under the law. Mr. Beck. —What is the name of the man, and what is the name of his attorney ? A. The name of the man is Charles F. Herve. He had three or four attorneys and counsel; they were associated together; I do not know in what way or in what form, or anything about that. Q. Which one came to you with the papers? A. Well, sir, I think there were two of them that came with him in the first place. Q. And brought the papers with them ? A. Yes, sir. Under the law the man bringing the information to my office was entitled to one fourth of the net proceeds, no matter who works up the case. I was entitled to nothing save such sum as they would voluntarily pay me, but they requested that I should put the case in my name, and should pay them two thirds of the amount, which I did. Q. Did these lawyers, or any of them, in any of their conversations with you, tell you, or did this man Herve say in their presence that he had obtained these papers surreptitiously, or stolen them from the books ? A. He never told me how he came by them, and I never asked him. Q. Didn’t you know they were torn out of their books, and could you not see where they were torn from ? A. When I got the books I found where the papers I had matched on. It was pretty good evidence that they were torn out. Mr. Beck. —The lawyer of the informer brought you the papers? A. Yes, sir. Q. And you presumed they were stolen, and I suppose he knew it ? A. It is not my duty to presume in any way. The law makes it my duty to ascertain if anj'- fraud has been com¬ mitted ; to avail myself of every source of information. Q. Would the courts of New York allow a lawyer to practice at their bar when he was an attorney of a man known to be a thief, and dealing with stolen papers? A. I believe the courts of New York and every State in this Union allows attorneys to defend thieves and protect them. Q. But do they allow them to bring suit and get fees out of the proceeds of plunder when they themselves have been the agents or aiders and abettors of the thieves ? A. I do not get the exact point of your question. Please state it again. Q. I will put it in this way; Did the Secretary of the Treasury know, when he paid you that money, that you were to give two thirds of it to the thief and his lawyer ? A. The Sec¬ retary of the Treasury knew that I presented evidence, and I told him the whole story of its source, and how the case came to me, and all about it. Q. And knew that this thief and his lawyer were to get two thirds of it? A. Well, you call him a thief; yes, sir. AN EXTRAORDINARY HISTORY. 285 Q, Yes, sir; I do call him a thief. Aud the Secretary of the Treasury knew that he was to get two thirds of it, and he paid the money ? A. The Secretary of the Treasury knew tliat my name was put on that information. Q, Do you think it was your duty-, as an officer of the United States, to communicate tliat fact to the officer who was to pay out such a large sum of money—the fact that two thirds of the portion coming to you was to go to a man and a lawyer, one of whom was a thief and the other was aiding and assisting a thief ? A. You name him a thief. Q. I will ask yon whether, if you were to raise your hand to heaven, j’ou could say you did not believe, and had information upon which you acted, that they were stolen papers? A. I do not know that I am called upon to say whether I consider it a theft or not. The informer having thus provided for his prospective interests by “ three or four counsel associated,” Mr. Jayne, the head detective, to make sure of securing his share in the plunder, next retained for his private benefit the professional services of Honorable (“heaven save the mark !”) Benjamin F, Butler, at that time a member of the United States House ot Repre¬ sentatives, and leader of the dominant political party, and whose influence with the federal administration was acknowledged to be all but irresistible. As one fourth of the penalties, or amount of confiscation decided upon (over 1400,000 in case the full value of the invoices were taken, or some $60,000 if it should be only the aggregate of the under valued items), was to accrue to the Collector, Naval Officer, and Surveyor of the Port, these gentlemen also called in to their aid, even if they did not professionally retain as counsel, one, if not two of the most distinguished and influential leaders of the party of the administration in the Senate of the United States {See pages Evidence before the Gommittee of Ways and Means, Congress, 1st Session, Miss. Doc. 264 ; also, pp. 165, 166, this volume ) And in addition to all this extraordinary employment of agencies, the fact that the statute gave to the United States District Attorney, the United States Marshal, and the Clerk of the Court a percentage on the amount of- penal¬ ties to be adjudged, or of the value of the goods to be confiscated obviously made it for the interest of all those officials not to array themselves on the aide of leniency, or to regard the case from any other than the most u a..... «,..e .wa. .„e cilice ot Secretary of tl.e Treasury, in view ot being J” . Senate, was not likely to retain his offlee, and that therefore, ‘I'O « deeiding how far a judgment of the court predicated on P , ° 1 -fU e ..afpppnce to intent, should be enforced, would of the law, and without iticience ^ ha vest exclusively ill liis successor ; but of f deHnitcly predicated, otlier than that lie was i -e y o eminent representatives aud senators who had been retained by the p.ose cation. 286 CONGKESa AND PHELPS, DODGE & CO. Now, whether the firm of Phelps, Dodge & Co. had reasons for any apprehension in respect to this change in the head of the Treasury, may, perhaps, be best answered by recalling the fact that popular opinion was all but unanimous in ascribing, a few weeks later, the nomi¬ nation of a new Secretary to the influence of Gen. Butler •, and, further¬ more, that in about one year afterwards this same Secretary, under the pressure of public opinion, found it expedient to resign his office, by rea¬ son of the disreputable transactions that occurred under his administra¬ tion, in connection with the so-called Sanijorn contracts, of which last Gen. Butler was also the engineer and adviser. Nothing, therefore, could be more pertinent than the following language, used by Mr. Beck in his speech before the House of Representatives, descriptive of the situation: It requires no argument to prove how utterly helpless these merchants were in the hands of such a power, stimulated by such incentives lo fasten guilt upon them. No one of these men could get a dollar if they did not get it out of their victims : all could reap a rich harvest if they could by any means force them to yield to their demands. With such an array of officials against the merchants, what was an appeal to the Secretary worth ? Every officer on whom he could rely for information was directly and largely inter¬ ested in having the highest penalty imposed. The leading administration Senator, and one of the ablest Republican members of this House were their advocates and attorneys. What private man stood any chance with the Secretary under such circumstances? What Secre- tarjq under such an administration as this, would dare to oppose such a combination ? Sir, it was apparent from the first that they had to pay whatever sum they were told would satisfy the rapacity of their persecutors, and they 2^aid it. Any of us would have done as they did.” To appreciate fully the situation of the firm the reader should also bear in mind that, pending any settlement or suit in court, the seized books and papers remained in custody of the officials, thus seriously interfering with the ordinary business transactions of the parties to whom they belonged. At the same time, the credit of the firm tended to become impaired, espe¬ cially in foreign countries, where the mere fact that the Government had instituted charges and seized property was regarded by the uninformed as all-sufficient evidence that the House had ceased to be responsible ; and lest reports and rumors transmitted by ordinary agencies should not be sufficient to work as much mischief in this respect as was desired, the same unscrupu¬ lous competitors in business and their sympathizers, who had connived at the entrance of the store of Phelps, Dodge & Co. at midnight the year before, took uponthemselvesnot only to have false and malicious articles written and published in certain papers, but mailed large numbers of such publications to all parts of the world where the firm was known to have business con¬ nections and correspondents. As illustrations of the effect of all this, it may be mentioned that in places as remote as Penang, in the Straits of AN EXTRAOKDINAKY HISTORY. 287 Malacca, where Phelps, Dodge & Co. were known as extensive purchasers of tin, a strong and almost successful attempt was made to throw dis¬ credit upon the bills of the house ; and, also, that in more than one instance the delivery of consignments of metal to the firm from Europe was sus¬ pended by cable telegrams to the owners or agents of the transporting vessels,for the reason fas afterwards explained in letters) that such reports reached the consignors, in respect to the position and difficulties of the consignees, as to make the order of non-delivery an act of but the most ordinary prudence and self-insurance. Thus, then, is answered a cpiestion which to many has seemed an inex¬ plicable mystery. Why did the firm of Phelps, Dodge & Co. settle or com¬ promise by paying S211,000, the amount of the items comprised in the several invoices which were said to have been under valued? To repeat, they settled because the continuance of the situation seemed to involve inevitable commercial ruin. “ We paid the money,” said Mr. William E. Dodge, in explaining this matter to the Committee on Ways and Means, “in ignorance of the fact of the amount we owed to the Government. ’ We never had a bill of specifications; we have not got one to-day; we have got simply the list of the vessels on which the goods were imported. We settled, and this has become the biggest case on record. It is known the world over. We look back upon it, and we think, as you gentlemen think, no doubt, that we were fools. We were fools, but there was terror in all these things; there was terror in that first day when we went into that dark hole in the Custom House; there was terror throughout.” At my age, having been a merchant fifty j'^ears, I desired to die in peace. When the Secrctarv of the Treasury said to me, “ Mr. Dodge, you had better go before the court,” he knew probably what I did not know, but which, if I had known, I never would have paid the money. I had no knowledge that there was only sixteen hundred dollars involved in the whole case, running over five years, and covering importations to the amount of $30,000,000. I am not so big a fool as that; but the fact was kept from us, and kept from us purposely. I had no idea of it.” Of the $271 017.23 extorted, under the circumstances as above related, from the firm of Phelps, Dodge & Co., and which they paid as the price of the discontinuance of persecution, one half, less fees of the court, was paid into the Treasury of the United States. The disposition of the remainder was thus grapl.ically and significantly detailed to the House of Representa¬ tives bv a member of the committee: “ The costs in court, though nothing was done, amounted to $8 1«.09. The share of the District Attorney in the $271,000 was over $5,400; that of the Collector, Naval Officer and Surveyor was $h,906.01 each, or $65,718.03 in all. Jayne got $65,<18.03, which he was to 288 CONGRESS AND PHELPS, DODGE & CO. divide with the thief who stole the papers. Geiier.-il Butler was paid a large fee, out of his and the thief’s portion, by Jayne. How mncL Senator Conkling got as adviser of the Custom House officers does not appear. They failed to avail themselves of our invitation or notifica¬ tion that we would gladly hear them if they had anything to say, so that we were unable to prove what their private arrangemenls with ccunsel were .”—Speech of Eon. James Beck. And here properly comes in an incident which contributes not a little to increase the romance with which the history of this extraordinary case is already invested ; for, as time went on, and the attention of members of the bar was specially given to the consideration of the principles according to which controversies between the Government and the merchants, arising out of the construction of the most complicated and absurd system of revenue laws that ever existed, were to be judicially settled, a statute (Act of Congress) was discovered to be in existence which, had the case of Phelps, Dodge & Co. been taken into the U. S. courts, would have been an effectual bar to the continuance of any proceedings against them looking to either penalties or forfeitures. This statute, passed in 1868, but curiously overlooked and forgotten until 1815, even in important cases argued and decided before the Supreme Court at Washington, recognized, intentionally or otherwise, to the fullest extent, that great principle of the Anglo-Saxon law, that no man could be compelled to give testimony criminating himself, or testimony that might subject him to a penalty or forfeiture, and reads as follows; “ That no answer or other pleading of any party, and no discovery or evidence obtained “ by means of any judicial proceeding from any party or witness in this or any foreign country shall be given in evidence, or in any manner used against such party or witness, or his property or estate, in any Court of the United States, in respect to any crime, or for the enforcement of any penalty or forfeiture by reason of anj^ act or omission of such party •‘or witness: Provided, That nothing in this Act shall be construed to exempt any party or “ witness from prosecution and punishment for perjury committed by him in discovering “ or testifying as aforesaid. Sec. 2. And he it further enacted, that this Act shall take effect from its passage, and “ shall apply to all pending proceedings as well as chose hereafter instituted.”— U. S. Laivs of 1868, dAuju 13. How u law of this character could have so long remained practically unrecognized on the statute book (being brought forward apparently for the first time by the counsel for the defence, P. B. Eaton, Esq., in the important case of the United States us’, Hughes, in Februar}'-, 1875,) finds explanation, possibly, in the circumstances that, previous to the revision of the laws of the United States (enacted June 22d, 1874), the statutes of the United States for the assessment and collection of the revenue on imports were so numerous and so complicated that it had been almost impossible for even experts—to say nothing of merchants—to know exactly what the law was. AN EXTRAORDINARY HISTORY. 289 Thus, between the dates of the general Tariff Act of March 2, 1861, and of the Revised Statutes, Congress passed some sixty laws relating to duties oa imports and their collection. Fiv^ of these, namely, two enacted in 1861, one in 1862, one in 1864, and another in 1872, may be classed as general tariff acts, because they covered a large class of articles. Neither of these in terms entirely repealed the previous ones, nor did Congress in¬ tend they should be altogether repealed ; and so each successive enact, ment of the whole sixty, after the first one, may be said to have overlapped and modified all that preceded it. It was, therefore, only by the most careful study that it became possible to determine how much at any given time any specific enactment of the series remained in force. And, as a further illustration of the difficulties growing out of this multiplicity of un¬ repealed statutes, the curious case of Smythe us. Fisk may be cited, in which the Collector of the Port of New York having sued an importer to recover penalties, the District Court of the United States, presided over by a judge familiar with revenue laws, decided that the duties were charge¬ able under one statute, while the Supreme Court of the United States, to which the case was appealed, unanimously reversed the decision, on the ground that the duties were chargeable under a subsequent and different enactment; and yet it was under such a system of laws, the provisions of which were unknown to even the judges and to members of the bar making revenue cases a specialty, that the firm of Phelps, Dodge & Co. were fined $271,000 for an error involving an apparent loss to the Government of $1,600, in an importation extending over five years of over $30,000,000, and on which duties were paid to the extent of from six millions to eight millions of dollars. It is, furthermore, safe to affirm, that if the records of any private business extending over such a period and embracing such an amount were to be thoroughly investigated by outside experts, each one actuated by the strongest of motives, i. e., large pecuniary gains, to dis¬ cover errors of omission or commission, that there would be exceedingly few that could be found to stand the test. The case having been thus settled, it was evidently the expectation of the moiety people and their advocates that the firm of Phelps, Dodge & Co., like many other merchants who had before been made the subject of simi¬ lar though smaller exactions, would be content to be quiet. But the firm, conscious of their entire innocence, and feeling that a grievous wrong had been done them, determined that they would not keep quiet; and they accordingly, on the 15th of April, 1873, caused to be published a state¬ ment of the case from their standpoint of view, addressed “To our friends and the Public” This statement, which was probably published entire or in abstract in every paper or journal of the United States (so great was 19 290 CONGRESS AND PHELPS, DODGE & CO. the interest in the case), was so clear in its presentation of the facts, and so strongly fortified by accompanying letters from Hon. Noah Davis, United States District Attorney at the time of the inception of the difficulties; from Hon. Thos. H. Dudley, Consul of the United States at Liverpool, who verified and certified to the correctness of the iden¬ tical invoices afterwards claimed to be undervalued ; and, finally, from the head detective and informant himself, B. G. Jayne, that an immense revulsion of public feeling was excited ; so much so, that those who had originally been most prompt to condemn the firm now became the most eager and ready to defend them. In thi.s matter the mercantile community throughout the country took the lead; and the New Yoi'k Chamber of Commerce especially signified its opinion by unanimously reelecting Hon. AVilliam E. Dodge, the head of the fii'iu of Phelps, Dodge & Co., to the post of President of the Chamber—an office from which, it was well known, it was his intention to have retired. Public sentiment, thus aroused to the iniquity which had been perpetrated by United States officiahs under the pretence of subserving law and justice, did not, furthermore, as time went, subside ; but, on the contrary, so gath¬ ered strength that, on the meeting of Congress in the following December, there! was no one matter upon which the opinion of the country was more l)ronouneed and unanimous than that the treatment to which the merchants of the seaboard cities had been subjected by the Treasury officials should be specially and thoroughly investigated by one or both branches of the national Legislature. The Committee of Ways and Means of the House of Representatives, therefore, at an early day, in accordance with a resolution of instructions on the part of the House, and being at the same time vested with the requisite authority, entered upon the investigation—^the National Board of Trade, and the Chatnbers of Commerce and Boards of Trade of most of the leading cities of the country being represented before the Committee, either by counsel or delegations of members. The investigation once inaugurated, and commencing in February, 1813, lasted, with some interruptions, until tlie following May. Am(»ng tlie first persons called before the Committee were Hon. William E. Dodge, and Jayne, the detective and informer of rec¬ ord in the case of Phelps, Dodge & Co. The examination of each lasted several days and alternated. Like the cuttle fish, which endeavors to pro¬ tect itself by blackening everything contiguous, Jayne hoped to relieve himself in some degree from the feeling of public detestation that surrounded him, by gross abuse and dennneiation of the merchants of New York in general, and of Phelps, Dodge & Co. in particular—Gen. Butler, a member of the House at the same time, being his acknowledged friend and counsel. AN EX'I'RAORDINAKY HISTORY. 291 Wliat the Committee thoiiglit of the statements of Mr. Dodge maybe in¬ ferred from the report subsequently made by them to the House, recom- niending the repeal of the laws under wbieb the house lie represented had been arraigned and mulcted. What they thonglit of Jayne maybe inferred from the following picture, which the chairman of the Committee, Hon. H. L.Dawes, drew of him in his speech, accompanying the report, before the Eou.'se: ifflit to be n that "Sir, wlio is the informer? He is to have half of the whole. The officials take the other iialf and divide it into three parts. His is the lion’s share. Sir, the informer, in ever}" position of society, in every place, and in every calling, is an odious and despised being. Everybody shrinks from him, no matter what be his position or his calling. He tliat goes about making a business of informing against his neighbor so shocks the common .sense of justice, decency and honor in all mankind, that he is universnllv de.spiscd. But let him do it for pay ; let it beunderstood that he goes up and down the earth paid to inform against his fellow men, and the intensity of the feeling of hatred with whieli he is regarded, and the feeling that he ought to be hunted around the earth, is increased tenfold. Add to that that he is to have half of what may be made out of his informing. He is bad enough when he volunteers without compensation, from any motives of malice or otherwise, to inform against his neighbor; he lias place whatever in decent societv; but when he does it for pay, much more, when he is to havehaU of the proceeds of his cursed employment, the door of decent society o and will be shut against him. “Tiie leper may be tolerated among men, for liis leprosy i.s bis misfortune. The n carries about him a loathsome disease, that is not his fault but Iris misfortune, engages the charity of the world to build an liospital for him, and to care for him with pity and compas¬ sion. But the vile, festering, putrescent informer, who goes about the earth assured of one half of what he can make bv his informing, finds no place as 3 -et where decent men will harbor, or countenance, or associate with him. We guard this man, roving around among the merchants of the cities of New A"ork, Boston and Philadelphia, with money enough, the fruits and promises of his success, to enable him to furnish the means tliat will invade the confidential relations that exist between the merchant and his clerks, tainting the most sacred trusts, Ijdng in wait for the unwary, and seeing the merchant unw"itlingly put in ns foot by omitting, it may be by accident or by ignorance, or by any of the thousand ways consistent with his honesty, to conform to the most complicated system of revenue m tlie world-standing, I say, at the desk, and seeing the merchant from day to day openly and uncomscious of any wrong, making misiakes in his invoices, with a law behind him tha says a mistake in one item forfeits the whole invoice, and then, when they are pi e up ly the dozen upon the desk of the Custom House, going and informing against him and getting one quarter of the forfeitures. . . , . . “Shall the Government of the United States take the wages of his sm and his iniquity and divide with him ?” ■ It is also pertinent to here add tliat, pending ills examination before the Committee, B, G. Jayne tendered Ms resignation of his position under the Government, and that the same was promptly accepted. Among tl.o other persons who appeared before the Committee in further¬ ance of Uie investigation, and in opposition to the whole system under 292 CONaRESS AND PHELPS, DODGE & CO. which Jayne and his associates had operated, were Hon. Jackson S. Schultz, Hon. Noah Davis, Daniel C. Robbins, Esq.. John C. Hopper, Esq., Cephas Brainerd, Esq., S. A. Eaton, Esq., of New York ; B. F. Nourse, Esq., of the National Board of Trade ; John VY. Candler, Hon. Alexander H. Rice and H. D. Hyde, of the Boston Board of Trade ; John Field, D. F. Houston, James E. Caldwell, of Philadelphia ; Andrew Reid, of the Baltimore Board of Trade, and others. On the other side, in addition to Jayne, appeared the successor of Judge Davis in the office of District Attorney of New York, Geo. Bliss, and Francis D. Moulton, of Brooklyn. As the result of these investigations the Committee of Ways and Means reported a bill repealing all provisions of law under which moieties of any fines, penalties, or forfeitures were paid to informers, or any officers of the United States ; and also all provisions of law authorizing the arbitrary seizure of books and papers ; which bill, after being slightly amended, passed the House of Representatives unanimously, and the Senate with only three dissenting votes. Tlie verdict of Congress, after a full and careful examination, was, therefore, most expressive and unequivocal in respect to the character of the transaction reviewed ; the action of Jayne and his associates, and the treatment which Phelps, Dodge & Co. and other merchants received at the hands of the so-called representatives of the Government ; a result, if unanimity of sentiment be considered, almost without parallel in the histoiy of American Congressional legislation. It might naturally have been expected that at this point this extraordi¬ nary history would have been permitted to have come to an end ; but it was not so to be ; for another incident, further illustrative of the character of the men whose action in seeking to make the whole people partners in their scandalous combinations against individual citizens had been so thoroughly condemned by Congress and the public, was yet to be added to the details that preceded, and which have here been related. In this the chief actor was Gen. Butler, who, as already stated, was em¬ ployed by Jayne to assist him in his schemes against the New York mer¬ chants, and who also acted as Jayne’s confidential friend and adviser when the latter was before the Committee of Ways and Means for examination. Gen. Butler himself, however, did not appear before the Committee to assist in the investigation, as it was confidently asserted that he would, although every opportunity to do so was offered him. Neither did he take part in the very full discussion before the House, when the bill repealing moieties and the right to seize books and papers was reported, considered, and adopted ; although Hon. Ellis H. Roberts, of New York, in the subsequent proceedings of the House, said to him : “I have asked you three times to come into this House and debate this question, and you Lad not the courage to come. AN EXTRAOEDINAKY HISTORY. 293 Mr. Butler, of Massachusetts.—Not when I was sick. Mr. Ellis H. Roberts— “ I did hear him groan: Ay, and that tongue of his, * 4! * Alas! it cried, ‘ Give me some drink, Titinius,’ As a sick girl.” Mr. Butler, of Massachusetts.—Yes, I am like Caesar. Mr. Ellis H. Roberts. —Yes, “ As a sick girl.” When the so-called “ Moiety” bill was passed, General Butler, apparently unwilling to constitute a minority of one, also refrained from voting against it,' and likewise remained silent when another bill was acted upon, repealing laws under which another client and pi’o^egre, Sanborn, had drawn large sums from the treasury for nominal and unnecessary services. Some two or three days, however, before the close of the session, Gen. Butler asked of the House that the evening of Friday, June 19th, might be assigned for general debate, with the understanding that he himself would occupy the floor; and as no business was assigned for that evening, “ the granting of the Hall to Butler,” says the correspoudent of the New York World, from whom we quote (under date of June 20th), “ was pretty much the same thing as granting it to a company of negro minstrels, or to a band o aps who advertise to swallow knives and spoons. The desire to hear Butler was irresistible, but he by no means got the two thirds assent wit lou ry ing twice for it. Having failed in his 6rst trial, he cajoled t le loving Democrats, and assured them that, whatever happene , it wou no be a Democratic funeral, but that, contrariwise, they wou e ® participate in a very jolly wake; and, accordingly, Gen. Butler got the floor '“a!"™’ io be expected, the epeech of General Butler, the circumstances and at the time above noted, was a rear a.gnmen of and an attack on the merchants of New York, and the firm of « A Co. in particular, as undoubtedly in his opinion the best ' ' dieting himself and the clientage of spies, informers "““fI, “ r contractors whom he had, for pay, counseied and rility, mendacity and buffoonery, was without parallel in the annals of our nabonal Legislature. Committee of Ways and The investigations and attack in reference Means having, however, rhe character of those to any recent proceedings, and ^ aole object Whom his clients had plundered and persecuueu aimed at, Gen. Butler’s only recourse was to go back and invent and mis 294 CONGRESS AND PHELPS, DODGE & CO. apply certain old stories of the past, hoping undoubtedly that no one, on the spur of the moment, would be found to deny and prove their falsity; and, also, probably acting upon the principle that a lie well told has always the semblance and often the efficacy of truth ; but in both of these anticipations General Butler was disappointed—his attacks against the firm of Phelps, Dodge & Co. recoiling most disastrously against himsejf. Thus, in the first instance, he endeavored to throw obloquy upon the firm by asserting that, years ago, they had evaded the payment of the customs duty on lead by importing it in the form of statuary, under a clause of the tariff which admitted statuary free of duty. It so happened, however, that a published statement of this whole matter had been recently made, showing, beyond the possibility of any question—1st, that at the time of the event referred to by General Butler, the firm of Phelps, Dodge & Co. was not in existence; and, 2d, that whatever the transaction was, it was passed upon at the time by the courts, and decided to be entirely legal; and the attention of the House, at the conclusion of General Butler’s speech, being immediately called to the exact facts by Hon. Lyman Tremain and others, the lie and the refutation went on to the record and before the country conjointly. And, in the second instance, when it was charged by General Butler that the firm of Phelps, Dodge & Co. had procured the alteration of an Act of Congress, whereby the duties levied on certain articles had been changed to the advantage of the firm as importers, it was also shown—1st, that the alteration referred to was merely the correction of an error of expression in a law, and that the change in question was publicly authorized by Mr. Fessenden when Secretary of the Treasury, with the full concurrence of the proper law officers of the Government, 2d, that it was an absurdity on its face to suppose that a private firm or individual could, under any circumstances, alter a law of Congress after its enrollment and enact¬ ment; and 3d, that the change, so far from having been of any pecuniary advantage to the firm, was really to their disadvantage. This speech of General Butler’s was replied to immediately, amid great excitement on the floor of the House, by Hon. Ellis H. Roberts, of New York; Hon. Charles Foster, of Ohio; Hon. Lyman Tremain, of New York, and Hon. Henry S. Dawes, of Massachusetts, the last named gentleman being at the time chairman of the Committee of Ways and Means. In the course of this debate, which was protracted until nearly midnight, Mr. Foster, of Ohio, pronounced some of the statements made by General Butler to be “unequivocal falsehoods ;” and also charged that one of Mr. Foster’s letters, which General Butler read in his speech, and claimed to have been picked up in the street, was in reality stolen from his (Foster’s) pocket. Of the character of the other speeches the following extract, from that of Hon. Lyman Tremain, will serve as an example: AN ENTNAOI^DINANY IIISTOEY. 295 “No man can deny llie power of the g-cntlcman from ]']ssex. But lie has not the power to raise tlie dead; and until he has tliat power lie can never reverse the judgment of this House and of this country that the Sanborn contract and the manner of its performance con¬ stitute the most disgraceful and disgusting performance that has ever brought discredit upon the American name. With all his power to please, and to call down the plaudits of the giilleries, the gentleman from Massachusetts can never roll back the popular tide or reverse that judgment, which is the judgment of the American people, that the scenes which have transpired in New York, of which Phelps, Podge N Co. were the victims, are as deserving of the condemnation of an honest and justice loving community as were the diabolical transactions of the inquisition and of the star chamber. Sir, there is in all this broad land but one man who has the boldness to stand up against the judgemnt of an honest people—against the unanimous expresssion of this House— against the conscience and the honest opinions of a thoughtful and a truth loving community in regard to these transactions The time for making tlie defence was wlieii the gentleman from Massachusetts was invited and he did not come. He was sick 1 He will be sicker yet before he gets tlirongh with his connection with the Sanborn and the Jayne infamies. No man is able to stand up before the American people and sustain these atrocious pro¬ ceedings.'' Six months had not elapsed before the above prophecy and assertion of Mr. Tremain was made fact ; and Gen. Butler, by an overwhelming majority, was declared, by the constituents to whom he had again ap¬ pealed, unworthy to longer represent them in the halls of the national legislature. With the detail of this latter incident this extraordinary series of events for the present comes to a close. Whether in the future there is to be oc¬ casion for continuing the record ; whether the Government will do justice by paying back the money, time only can show. But of this we may be sure, that what has occurred and what has been written has passed per¬ manently into political and economic history, to be used hereafter for illus¬ trating how fiscal laws, enacted in disregard of true and acknowledged economic principles, and having for a purpose the subserving of objects other than the direct pecuniary necessities of the State, invariably work to the loss and demoralization of the whole people ; and also how, even under an acknowledged free and Republican form of Government, a system and practice of espionage and terrorism, the like of which would have been dis¬ graceful even under a despotic government of old Europe, becomes not only possible, but is justified and participated in by men occupying the first posi¬ tions in the State. “ Ill fares the land to hastening ills a prey, Where wealth accumulates and men decay.” DAVID A. WELLS.