37th Congress, ) HOUSE OF REPRESENTATIVES. ( Report 
 • 3d Session. j ( No. 49. 
 
 GOVERNMENT CONTRACTS. 
 
 March 3, 1863. — Laid on the table and ordered to be printed. 
 
 Mr. Fenton, from the select committee to inquire into contracts of the 
 government, made the following 
 
 REPORT. 
 
 The special committee of the House, appointed to inquire into all the facts 
 and circumstances connected with contracts and agreements by or ivith 
 the government growing out of its operations in suppressing the rebel- 
 lion, submit the following final report: 
 
 Since the last report, submitted 'to the House on the 17th day of 
 July, 1862. your committee have confined their labors principally to 
 the investigation with which they were charged by the resolution of 
 the House, of February 26, 1862, instructing said committee to 
 "inquire into the amount of moneys received by the federal officers 
 in the city of New York by virtue of their offices ; also as to the 
 ownership and rents of the bonded warehouses ) also the terms, con- 
 siderations, and profits of the labor contracts for the storing, hauling, 
 and delivery, &c. , of foreign goods in the city of New York ; when 
 made, by whom, and who are now interested in the same." 
 
 The labors of the committee have extended through a period of 
 twenty months, and their reports and the testimony taken will cover 
 nearly three thousand pages of printed matter. They have endeav- 
 ored faithfully to discharge the important and onerous duties confided 
 to them, and the result of their labors may be found in the many mil- 
 lions of dollars saved to the treasury through their investigations. 
 
 The disclosure of the transactions which brought reproach upon the 
 western department in the summer and fall of 1861, brought upon your 
 committee no small amount of obloquy and reproach from the parties 
 implicated in the frauds which were exposed. A court-martial, con- 
 stituted of distinguished officers of the regular army of high rank, 
 was convened to try 3Iajor Justus McKinstry, quartermaster of the 
 United States army, who was charged with corrupt practices as a 
 public officer while acting in that department. The sixty-one speci- 
 fications under the charge were nearly, if not quite, all based upon 
 the testimony taken by your committee. After a trial of almost 
 unprecedented length, in which the accused was allowed every lati- 
 tude for his defence, he was found guilty, in whole or in part, on 
 twenty-six specifications. He was convicted of the charge, and 
 
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37th Congress, ) HOUSE OF REPRESENTATIVES, j Report 
 3d Session. j ( No. 50. 
 
 GOVERNMENT CONTRACTS 
 
 March 3, 1863. — Laid on the table and ordered to be printed. 
 
 Mr. Van Wyck, from the select committee on government con- 
 tracts, submitted the following as the 
 
 VIEWS OF THE MINORITY. 
 
 PREFACE,. 
 
 On the 26th day of February, 1862, the following, on my motion, 
 was adopted unanimously by the House : 
 
 Resolved, That the committee on government contracts be directed to inquire 
 into the amount of moneys received by the federal officers in the city of New 
 York, by virtue of their offices ; also as to the ownership and rents of the 
 bonded warehouses ; also the terms, considerations, and profits of the labor con- 
 tracts for the storing, hauling, and delivering, &c, of foreign goods in the city 
 of New York ; when made, by whom, and who are now interested in the same. 
 
 The day after, I was informed that Mr. Washburne had prepared 
 a resolution to discharge this committee from its consideration, and 
 refer it to a committee to which Congress had refused the power to 
 send for persons and papers, or hold its sittings in any place except 
 Washington. I immediately saw and remonstrated with him. He 
 alleged that this committee had already work enough to occupy its 
 time. I assured him I would assume the labor of taking the testi- 
 mony, and thereb}^ the time of the other members would not be re- 
 quired. He requested me to see other members of the committee. 
 I immediately did — all who were present in the hall, Messrs. Hol- 
 man, Dawes, and Fenton. They consented that the resolution should 
 be retained by this committee, on condition that I should take the 
 testimony. I then informed Mr. Washburne of their conclusion, to 
 which he assented; and it was understood distinctly that the evidence 
 should be taken by myself. Such had previously been the uniform 
 practice of the committee, that testimony could be taken by less than 
 a quorum. Accordingly, on the 11th March I went to New York 
 city and commenced my labors. I then found the committee in ses- 
 sion with only one member, Mr. Dawes, who left that night. He re- 
 quested me to finish some investigations he had commenced. I 
 declined on the ground it would require all the time I could spare 
 to examine the matters of the above resolution. Mr. Dawes left the 
 
2 
 
 GOVERNMENT CONTRACTS. 
 
 same night. I continued the meetings of the committee with the 
 same stenographer and in the same room. I held session from day to 
 day until the 24th March, and had examined fifty witnesses. 
 
 Not one of them objected to testify, or raised the point that less 
 than a quorum had authority to administer oaths. 
 
 On the 22d March I was informed some of the custom-house officials 
 had stated that the evidence was not fairly taken, that all the testi- 
 mony of the witnesses had not been recorded. I immediately wrote 
 the following note: 
 
 March 22, 1862. 
 
 Gentlemen : I understand it is claimed that all your evidence was not taken 
 down by the stenographer of the committee. I wish you would appear to-day 
 at room 383 of the St. Nicholas, to have inserted in your evidence anything 
 which was omitted and to add anything thereto you may desire. 
 Yours, &c, 
 
 C. H. VAN WYOK. 
 Messrs. Wardell, Bayard, Hunter, Benedict, and Craig. 
 
 and the same day it was served on each of the above-named by the 
 acting sergeant-at-arms. All, or nearly all, of the witnesses appeared. 
 They were friends of the revenue officers: heard read their testimony, 
 expressed themselves satisfied, and pronounced it correct. 
 
 On the 24th day of March I received the following despatch by 
 telegraph: 
 
 Washington, March 24, 1S62. 
 I am instructed by the committee to direct that you proceed no further in 
 your investigations in New York until further orders. 
 
 E. B. WASHBURNE. 
 
 This despatch resulted from the clamor of the revenue officers and 
 their friends. I discontinued; returned to Washington; my regiment 
 was under marching orders, and in a few days moved with the army 
 of the Potomac, and was absent with it for many months. Up to the 
 time of my leaving it was not pretended to me that the testimony 
 was not regularly taken, or without the authority of the committee. 
 One of the committee, who evidently had been in communication with 
 the New York custom-house, and some others of the committee, 
 thought it was best, inasmuch as the revenue officers were claiming 
 that a quorum was not present, to delay further proceedings until a 
 quorum could meet; and it was not then lisped or intimated tome that 
 the evidence already taken was without authority of the committee. 
 The subsequent action of the committee showed it was clone by their 
 authority. 
 
 So much solicitude for persons implicated by evidence had not 
 been manifested before. When the honorable member from Penn- 
 sylvania, Mr. Davis, desired that his brother, a quartermaster, to 
 whom allusion had been made in the evidence taken by less than a 
 quorum, at St. Louis, should be sent for as a witness, I desired he 
 
GOVERNMENT CONTRACTS. 
 
 should be subpoenaed, but some of these same members said no: let 
 him come and he can be sworn, but we cannot put the government 
 to the expense of subpoenaing him. When General Fremont's friends, 
 after his operations in the west, had been questioned by testimony 
 taken by less than a quorum, desired he should be subpoenaed, I 
 urged that it be done, and the day before leaving Washington left a 
 written request with a member of the committee, so that my position 
 might not be misunderstood, asking that he should be subpoenaed. 
 Some of these same members said no; he can appear before the com- 
 mittee if he chooses, but we will not subpoena him ; yet when the 
 revenue officers of the city of New York waive the magic wand, these 
 same gentlemen order the investigation to be suspended. Nearly all 
 the testimony taken by this committee has been by less than a quorum: 
 at least seventy sessions have been so taken, sometimes by one, two, 
 and three members : sometimes the committee have been sitting at 
 two places at the same time. It may be said that a full meeting of 
 the committee authorized it to be so taken, but such was not always 
 the fact. The testimony I took was fairly taken. Among the number 
 I examined several from the custom-house. Now, I state distinctly 
 that the committee, in the spring of 1862, considered this testimony 
 as having been properly taken. In the first place, if 1 was taking it 
 without authority, why did the committee claim to control my action 
 by sending a despatch to discontinue until further orders? That shows 
 they had a knowledge of my doings, that I was acting by their au- 
 thority and approbation, and that I was under their control. 
 
 2. They procured from the stenographer a copy of the evidence so 
 taken and paid him for the same. 
 
 3. The House had by resolution ordered this inquiry, and they 
 would not have dared to violate the instructions by neglecting to take 
 testimony; yet they suffer the whole session to pass and really do 
 nothing until September 9, (although in April and May sessions 
 were held in New York city, at one of which Mr. Ogden was examined 
 by them, whose testimony occupied part of two pages,) and con- 
 sidering the testimony taken by me as the testimony of the committee r 
 proceed immediately to allow the defence to be heard, and examine 
 no witnesses except those of the household of the custom-house r 
 including Messrs. Barney, Andrews, Dennison, Isaacs, Archer, Brown r 
 &c, and the whole nature of the examination is to exculpate and 
 clear from the evidence taken in March last. The committee had 
 knowledge of the evidence, and the revenue officers had evidently read 
 or been informed of it. 
 
 The questions of the committee and the answers are predicated 
 upon the testimony previously taken and to contradict certain por- 
 tions of it. 
 
 The whole examination at that time, the form and spirit of the ques- 
 tions, teas to relieve and shield the officers from the evidence previously 
 taken. 
 
 It is unaccountable, if the committee considered the evidence taken 
 in March not taken by due authority, that they should have defiantly 
 ignored the resolution of the house, and in September employed only 
 
4 
 
 GOVERNMENT CONTRACTS. 
 
 one day in examining questions of varied import. No; the evidence 
 was tin n deemed valid, and when the custom-house officers had their 
 dav in court the work was supposed to be completed. Nothing fur- 
 ther was said or done about the matter until my return to the present 
 session, when action was insisted upon. 
 
 It was agreed to have a meeting in New York to conclude that and 
 other matters. 1 was informed in Washington that the custom-house 
 officers, or some of them, had threatened and denounced the com- 
 mitter, and would prosecute any person who should publish the evi- 
 dence taken in March. As far as I may be able, they shall have an 
 opportunity to commence a suit. 
 
 What took place in New York will be explained by the following 
 resolutions The first resolution was passed in my absence, when 1 
 was led to believe there would be no meeting of the committee. 
 
 On the 17th day of December it was — 
 
 " Resolved, That inasmuch as certain testimony has been taken by one mem- 
 ber of the committee, in the absence of a quorum, touching the official conduct 
 of certain federal officers in New York under objection from them, therefore the 
 committee will examine such testimony, and whenever it appears that the testi- 
 mony of any such witness so taken is found to affect the official conduct of any 
 such person, such witness shall be re-examined, and so far as his testimony on 
 re-examination affects the official conduct of any federal officer in New York it 
 shall be submitted to him for his inspection." 
 
 There is no pretence that the testimony ivas taken without the authority 
 and approbation of the committee. Mark, they do not object, but the 
 federal officers do. 
 
 When I ascertained the nature of the resolution I offered the fol- 
 lowing, which was voted down: 
 
 " Whereas, at a meeting of this committee at Washington, a few days since, it 
 was agreed and understood that a full meeting of the committee should be held 
 in New York city to complete the investigation relating to the New York cus- 
 tom-house and other matters ; whereas it was understood, before leaving Wash- 
 ington, that the committee should meet in the basement No. 14 Pine street, a 
 room tendered by Hon. E. Haight for the use of the committee; and whereas 
 a portion of the committee, in the absence of Messrs. Holman and Van Wyck, 
 Mr. Holman not yet having reached the city, and Mr. Van Wyck was at 14 
 Pine street awaiting the committee until he learned they had secured a room in 
 the custom-house, called on Hon. H. B. Stanton, deputy collector, was shown 
 the room in state of preparation for the committee, not yet cleaned or warmed, 
 who waited in the room of Mr. Stanton some time for the members of said com- 
 mittee, and when several of them had arrived it was understood that no meeting 
 should be held that day as there were no witnesses present, and Mr. Holman had 
 not arrived, yet before that interview a portion of the committee had met in 
 another room in the custom-house, not the one assigned to the committee, and 
 adopted the resolution of December 17th, therefore — 
 
 Resolved, That said resolution of December 17 be reconsidered. 
 
 I then asked leave to have the following protest placed on the 
 journal of the committee, which was denied : 
 
 C. H. Van Wyck, a member of the committee, desires to have entered upon 
 the journal of this committee his protest against any action by this committee, 
 whereby any part of tin? evidence taken by him in March last, in the city ot 
 
GOVERNMENT CONTRACTS. 
 
 5 
 
 New York, as to moneys received by the federal officers in the city of New 
 York, &c, shall be suppressed or not published. While he is willing that any 
 of the witnesses examined by him shall be allowed, at their own suggestion or 
 the request of any of the officers they implicate, to again appear before the com- 
 mittee and make any explanation or addition they desire, he is not willing to do 
 anything on his part which may be considered a relinquishment of his right 
 to have such testimony, so taken by him, published. 
 
 That all the witnesses examined by him appeared, and were examined with- 
 out any objection on their part. 
 
 By the committee's resolution of December 17 they recognized the 
 validity of the testimony. They do not object to any part thereof, 
 they only shoiv an amiable tenderness to those portions which reflect upon 
 the revenue officers, and propose to examine only the witnesses implicating 
 them. The other portions of the testimony they did not propose to disturb. 
 
 The committee did not then pretend the evidence had been taken without 
 their authority . I then and there declined to do any act which would 
 seem a waiver on my part of the right to use all the testimony pre- 
 viously taken. 
 
 This evidence was before the committee. The clerk of the com- 
 mittee had made an abstract of the same for its use; yet, most re- 
 markable of all, but two or three of the witnesses, reflecting upon the 
 public officers, are recalled, and the most important ones are not sum- 
 moned. The reason of this a discerning public will determine. 
 
 If there had been errors, injustice, and corruption in the custom- 
 house in other times, it had not evidently been purged under the ad- 
 ministration of the present officers; that was so plain that he who 
 runs may read. 
 
 The evidence was concluded in New York, and the journal shows 
 that on the tenth of January testimony was taken by one member of 
 the committee, Mr. Dawes, and on the twenty-sixth by one member, 
 Mr. Fenton; yet that evidence did not reflect on the revenue officers. 
 It possibly makes some difference whose ox is gored 
 
 On Monday evening, February 9, I called on Mr. Andrews, clerk 
 of the committee at Washington, to examine the evidence taken in 
 March, and was informed by him I could not see it except by order 
 of the committee. I inquired as to the journal, and if the resolu- 
 tion I had offered in New York, and had been voted down, was prop- 
 erly entered there. He replied, no; that the committee had ordered 
 it should not be entered in the journal. I called on each member of 
 the committee to. know about the order preventing an inspection of 
 the testimony, and every one except Mr. Washburne disclaimed any 
 knowledge of any such order or action of the committee. 
 
 A meeting of the committee was held on the evening of February 
 11, when I insisted upon my right, as a member, to examine such 
 evidence. By this act the committee recognized it as their evidence, 
 for had 1 taken it without authority then it belonged to me, and they 
 had no control over it, but there was a persistent determination on 
 the part of some of the members to prevent me from seeing it. At 
 that meeting Messrs. Fenton, Washburne, and Holman were present, 
 
6 
 
 GOV KRNMENT CONTRACTS. 
 
 and they were willing 1 should take the evidence if I would pledge 
 myself not to use it. 1 spurned the proposition, and treated it 
 as it deserved. What can be the motive lor such conduct? 
 Why were they afraid of the evidence? Was it because the cus- 
 tom-house officers had threatened? Was the evidence harmless, 
 then no body could be injured by its publication. Could it be contra- 
 dicted, then nothing more easy, for the custom-house did not want 
 for friends on the committee. Did it show corruption and criminate 
 tin officers, then duty required its exposure. However, a resolu- 
 tion was read by Mr. Washburne saying* it should be deposited with 
 the clerk of the House for the inspection of members of the com- 
 mittee, and the resolution, as read, substantially said no more. On 
 the next day I understood that the resolution contained the words 
 "that the testimony was taken without authority of the committee.'' 
 If such words were in the resolution they were omitted in reading, 
 evidently for a purpose, for I would not quietly have suffered that to 
 pass on the journal; and the next day I asked Mr. Holman if any such 
 words were read, and he emphatically denied it. I am thus minute 
 in this matter, for this attempt to falsify the record and interpolate, 
 first, to have a declaration of the committee against the evidence and 
 against myself, that I had acted without authority, gives me the right, 
 as a matter of the highest privilege, to vindicate myself, and is clearly 
 a justification for stating what took place in the committee room. 
 
 Since writing the above I have obtained, and have now in my pos- 
 session, the original resolution ; I give it entire, so the world may see 
 the motive which actuated, and the ends sought to be accomplished 
 by any means, no matter how unfair and dishonorable. The resolu- 
 tion was written at the room of Mr. Fenton, in the National Hotel, 
 where the committee was in session, by Mr. Washburne, and was writ- 
 ten with ink. The resolution, as read by Mr. Washburne, did not 
 contain the words which are now interlined. The interlinations are 
 in pencil and were not put in when first written, for ink w r as used; 
 and could not have been put in at that time, for he would not have 
 procured a pencil when pen and ink was by his side. The resolution 
 was drawn up just as Mr. Hollman and myself were leaving; here it 
 is, as read to the committee: 
 
 " Ordered, that certain testimony taken by Mr. Van Wyck, in New 
 York, be deposited by the clerk of this committee with the Clerk of 
 the House, with directions to the said Clerk to hold it in his posses- 
 sion, subject only to the inspection of any member of the committee. ,? 
 
 In the body of the resolution are three erasures in ink; one inter* 
 lination in ink erased in ink, and the word it interlined in ink. 
 
 The resolution as it how appears is as follows: 
 
 Ordered, that certain testimony taken by Mr. Van Wyck, in New 
 York, without the authority of the committee, be deposited by the clerk 
 of this committee with the Clerk of the House of .Representatives, with 
 directions to the said Clerk to hold it in his possession, subject only 
 to the inspection of any member of the committee.' ? 
 
 The words 11 without authority of the committee,'' 1 and ' l qf Repre- 
 sentatives" interlined in pencil. 
 
GOVERNMENT CONTRACTS. 
 
 7 
 
 That gives character and motive to the whole of the attempts to 
 suppress this evidence. Foolish man ! Did he expect by this leger- 
 demain to keep back the frauds of the custom-house? Vain hope! 
 Look for a moment at the resolution as drawn, read, and acted upon 
 by the committee wlio recognized it as testimony, and the committee 
 are making disposition of it as testimony of the committee; but after 
 it is discovered he was snared in his own meshes, then it is interpolated 
 to remove the difficulty, never believing that the evidences of the 
 mode of procedure would ever be seen by the public. 
 
 The next day the evidence was and now is deposited with the Clerk 
 of the House. I have printed with this report only a part; such 
 portion as illustrates the views I propose to offer in regard to the 
 matters embraced in the resolution. It will remain with the Clerk, to 
 be used by this or the next House of Congress if they desire. 
 
 MONEYS RECEIVED BY REVENUE OFFICERS. 
 
 By the resolution the committee were instructed to inquire — 
 First, as to the amount of moneys received by the federal officers 
 in the city of New York. This involved the. examination of many 
 witnesses, and in regard to the revenue officers a great diversity in 
 judgment. 
 
 One thing is remarkable: that the collector, Barney, surveyor, 
 Andrews, and naval officer, Dennison, are neither of them able to 
 say how much money they received, they will only swear that Mr. 
 Ogden, the auditor, has the account of it. Mr. Ogden, from his re- 
 port, made up in January last, shows from $21,000 to $22,000 
 yearly to each of those officers; while Mr. Cargill, formerly deputy 
 collector, and fully competent to know, fixes the amount of the last 
 four years, independent of salary, to each, $150,000, and Mr. George 
 D. Bayard, at present in the seizure bureau, capable of judging, 
 makes the amount $30, 000, annually, independent of salary. As if 
 these enormous sums are not enouuh for the collector, he has, in 
 addition, commissions on States' fees collected by his authority, viz: 
 harbor master's, health officer's, and the seaman's retreat hospital 
 fees, amounting to nearly $4,000. 
 
 There was, of necessity, in March last much inquiry as to the source 
 and the manner of obtaining penalties and forfeitures. And it would 
 appear that all the censurable practices of the custom-house are still 
 retained. It is not only unjust to persons charged with violations of 
 the revenue laws but to the honest and honorable importer. Honest 
 merchants have to pay an excess of duties in order to avoid the ra- 
 pacity of the system, and the practices which now prevail would dis- 
 grace a mock auction or Peter Funk establishment. 
 
 The evidence shows that nearly all the violations of the revenue 
 laws are not smuggling really, but introducing goods undervalued; 
 nine-tenths of the fines, penalties and forfeitures are from that source. 
 The evidence further shows that efficient and honest officers could 
 prevent or rather detect at the time of its commission such violations 
 of the laws. But the interest of the revenue officers is not to detect 
 
8 
 
 GOVERNMENT CONTRACTS. 
 
 and punish at the time, but to encourage such infractions, for it leads 
 to large sums in the future. 
 
 A man will be allowed to continue with slight undervaluations, 
 from time to time, and when a large stock of goods presents then 
 an army of custom-house officers come suddenly upon him. seize all his 
 goods, whether or not liable to forfeiture, take all his books, private 
 papers, <fcc, whether authorized or not; and the man must be bank- 
 rupted and ruined, or disgorge as may be demanded. 
 
 It may be said that this statement proceeds on the presumption that 
 the officers are actuated by cupidity. Most certainly, for so your 
 laws proceed. The giving a share of these fines and penalties to rev- 
 enue officers is wrong. It has been said that a few years since the 
 law was changed, and then the government obtained no fines and penal- 
 ties. And each one of the present revenue officers has argued that 
 under any other system the laws would not be enforced, thereby ad- 
 miting that they would not do their duty unless they can share the 
 plunder. They say that officers must be stimulated to duty through 
 the mean gratification of their avarice and cupidity, and they un- 
 blushingly claim that the obligation of an oath to perform duty is not 
 as binding as the privilege to enter some importer's store and confis- ✓ 
 cate his goods, whereby their own pockets are to be filled. 
 
 Such motives for duty are not more honorable than those actuating 
 the smuggler. The revenue officers claim that they incur great risk 
 and danger in making seizures, the evidence shows nothing of the 
 kind. The revenue officers, who receive $20,000, $30,000, or $40,000 
 per year, incur no risk or danger, neither do they themselves detect 
 frauds. Outsiders sometimes give the information, and frequently 
 the employes, or detectives, who are employed for that purpose, ferret 
 them out. These men are paid a salary : and although they are really 
 informers, and entitled to a share, yet they are never allowed to 
 claim it; and there is a rule possibly implied, although Mr. Dennison 
 endeavored to testify to the contrary, that an employe should not 
 claim the informer's share. Should he make application for it he 
 would not be long in receiving notice of dismissal. Now 7 , if detec- 
 tives and employes like Brown, Isaacs, Archer, and Graham can be 
 faithful to their employers on a salary without a share of the seizures, 
 why cannot Messrs. Barney, Andrews, and Dennison be equally so 
 to their employer, the government. Messrs. Barney, Andrews, and 
 Dennison are not censurable for taking all the law will give them, but 
 the fault is in the law itself. This House did, at its last session, pass 
 an act limiting the compensation of each officer to $10,000, but the 
 Senate refused to concur, and there the responsibility rests. 
 
 When an importer's goods are seized he must either pay the 
 amount demanded or be ruined; such is the machinery of the pro- 
 ceedings, that he knows, and that the revenue officers know it 
 is not unlikely the seizure proceeds as upon that hypothesis. 
 In this connexion is the significant fact that most of the seizures 
 are made of foreign houses, who do not fully understand the 
 ways of the system until taught by dear experience. The testimony 
 shows that smuggling could be stopped as easily as the fitting out 
 
GOVERNMENT CONTRACTS. 
 
 9 
 
 slavers. Y"et the fact is notorious, that violations of the revenue laws 
 are increasing, while the efficient marshal of New York has entirely 
 broken up the fitting out of slavers; it is to the interest of the revenue 
 officers that smuggling should not be discontinued. 
 
 The honest, honorable importer also suffers. The evidence is 
 abundant that many of them increase the invoice price of their goods 
 beyond the actual value, so that they may be entirely free from the 
 possibility of a seizure and ruin. This is unjust. A great govern- 
 ment should protect its citizens from any such reproach. In many 
 seizures, after taking all his goods, books, and private papers, they 
 manifest a great interest in the welfare of their victim, and are per- 
 sistent in recommending counsel. The bevy would besiege him, by 
 turns, generally recommending Mr. Dunning r Craig. I would say 
 nothing derogatory to the character of either of those gentlemen, 
 but I do aver that the men who had seized the prize would not do 
 anything willingly to have it escape. Many of the witnesses state 
 the whole detail of this mysterious procedure, but the testimony of 
 Mr. Mendelson is so intelligent and complete. I have annexed his 
 statement entire. 
 
 In such cases the revenue officers would never give a receipt, but 
 always exacted a written consent from the unfortunate man, so that 
 he could not prosecute. Mr. Ogden in his evidence explains fully 
 why they armed themselves with this precaution. Such conduct can 
 only be explained on one theory. 
 
 The custom-house has presented no record of the amount or distri- 
 bution of money received as bribes. A remarkable fact is stated in 
 Isaac's testimony of September 9 : 
 
 "I have never in my life received a shilling from any individual, 
 except where it has been paid to the collector, surveyor, or naval 
 officer as money presented to me as a bribe. For instance, here is 
 money (showing a roll of bills) which was offered to me this morning 
 as a bribe. I received it, and then seized the man's goods, and sent 
 them to the public store. We often take such money when offered to 
 us as a bribe, but we always deliver it to the custom-house officers.' 7 
 
 It may be difficult to make some persons believe that the smug- 
 gling fraternity would part with money without receiving or being 
 fully assured of a valuable consideration. 
 
 The law in all cases requires that where the value of the goods 
 seized exceeds one hundred dollars, the matter shall pass through the 
 hands of the district attorney; yet the present revenue officers, for 
 the first time in the history of the custom-house, openly set at de- 
 fiance this law. and ignore it entirely; and when some of the subor- 
 dinates remonstrate and warn them, upon mature deliberation they 
 determine to continue its violation, alleging as the only reason that if 
 the law is complied with fees of other officers are taken from the pro- 
 ceeds, and not so much will therefore find its way into their pockets, 
 designedly breaking the law for their own gain. The evidence is 
 clear on this point; vet these are the men who are to be allowed com- 
 pensation beyond that of the President of the United States, five times 
 
10 
 
 GOVERNMENT CONTRACTS. 
 
 that of cabinet ministers and judges of the Supreme Court, and ten 
 times that of senators of the United States; and then, as I have been 
 informed, have the reeklessness to threaten a committee of investi- 
 gation, if it does not suppress evidence ! 
 
 The concurrent testimony of many witnesses, uncontradicted even 
 by the evidence furnished from the custom-house, establishes the fore- 
 going statements; yet it was deemed necessary to introduce only the 
 following- : 
 
 Henry A. Cargill, sworn: 
 
 Question. Have you been for some time past employed in the New York 
 custom-house ? 
 Answer. Yes, sir. 
 
 Question. For how long, and up to what time I 
 
 Answer. I have been twice in the custom-house ; once under Lawrence, under 
 Polk. After that, I have been deputy collector two years last April. Before 
 that 1 was chief clerk in the invoice department, I think six or eight months. 
 I have been deputy collector for two years last April. 
 
 Question. When did you leave the office ? 
 
 Answer. I think the 12th of April last. 
 
 Question. What position did you occupy the last time you were in office ? 
 Answer. Deputy collector. 
 
 Question. Who succeeded you in your department ? 
 
 Answer. Mr. Coventry D. Wardell, who is the head of the department, and 
 Mr. George D. Bayard, in the seizure department. 
 
 Question. Does Mr. Wardell occupy the same position you did ? 
 Answer. Mr. Henry B. Stanton does. 
 Question. Who would be likely to know of this book ? 
 Answer. Mr. Wardell and Mr. Bayard. 
 
 Question. Had you in your office, or anywhere, a memorandum of seizures 
 made upon land and upon shipboard w r hile you were chief clerk 1 
 
 Answer. Yes, sir ; there was a book of that kind made out by George D. 
 Bayard, at the instance of Mr. Schell, about four months before I left. I rather 
 think Mr. Schell has got that in his possession, but the auditor has got all that 
 information on his books with regard to the final settlement of cases and the 
 amount paid in each case. He made up, at the instance of Mr. Schell, a book 
 of all the cases at the time. I have a book also myself that would give a great 
 deal of information. I had to go through and select out everything outstanding 
 that had not been settled. I made up a book of that kind, and that is in 
 the office. I made it up of all cases that had not been prosecuted from the 
 time Mr. Schell came into office until he left, that is to say, until six or eight 
 months or a year before he left. That book was too small, and I transferred it 
 to another larger book. But there is simply the name of the case and how they 
 were settled, that is to say, it was a sort of memorandum book. 
 
 Question. That book was continued up to the time you left ? 
 
 Answer. It was about a year before I left. 
 
 Question. You did not get down everything that was compromised ? 
 Answer. No. 
 
 Question. This book was kept for cases where there was a contest ? 
 
 Answer. Yes, sir. When this book ran out, I got a new book, and had all 
 those cases that stood open copied into this other book, Of those settled there 
 is a memorandum made of how they were settled. 
 
 Question. Does this last show the number of all cases settled and unsettled ? 
 
 Answer. No, sir. The two books together show all the unsettled cases at the 
 time I took charge of it . 
 
GOVERNMENT CONTRACTS. 
 
 11 
 
 Question. What was Mr. Craig's business in the custom-house? 
 Answer. He was chief clerk of the collector when I first went into the office, 
 and had charge of all the seizure business at that time. 
 Question. What was his salary? 
 
 Answer. Twelve hundred dollars ; but before Mr. Schell went there he had 
 one-third of Mr. Redlield's profits ; but Mr. Schell never gave him anything of 
 the kind. He became dissatisfied, and after some negotiation with the naval 
 officer went into outside business. I was then called upon to know whether I 
 could undertake the business of this office. And I took it for my own salary, 
 $2,500 per annum. 
 
 Question. Mr. Craig received one-third from Mr. Redfield ? 
 
 Answer. He told me Mr. Redfield had always given him that. 
 
 Question. Why should they give him one-third ? 
 
 Answer. Not one-third of the whole, but one-third of the collector's share, 
 because of the vigilance with which ^he thing was done. 
 
 Question. How much money did it amount to during the four years \ 
 
 Answer. During the four years I always thought it amounted to 8150,000 
 apiece — to the collector, the naval officer, and the surveyor. 
 
 Question. You had the whole control of it during the time you were there \ 
 
 Answer. Yes, sir ; but not the receiving of the money. The letter books 
 will show the amounts that were prosecuted for. The letter books were under 
 the control of the deputy collector, Church. They show every case ; for in- 
 stance, when prosecution took place, and consent to receive an amount agreed 
 upon, and consent to the condemnation of the goods. Whenever they have 
 agreed to the amount, it is prosecuted for that amount, and then a letter is 
 written up to the district attorney stating that they think it best for the govern- 
 ment that this amount should be taken. 
 
 Question. You also knew from the making up of this book, not only the two 
 years you were in, but also from the examination of the letter books the two 
 years previous ? 
 
 Answer. Yes, sir ; I knew the cases unsettled. 
 
 Question. Where did the settled cases go that you did not have in your 
 memorandum ? 
 
 Answer. In the letter book. 
 
 Question. Does the auditor have that also ! 
 
 Answer. Yes, sir. 
 
 Question. Then the letter book shows every case that is settled ? 
 Answer. Yes, sir. 
 
 Question. From all this you judged they received $150,000 apiece ? 
 Answer. Yes, sir. I think each one would get in four years pretty near 
 $150,000. 
 
 Question. Do you think the letter book shows this ? 
 
 Answer. Yes, sir ; they are bound to show the exact amount they receive. 
 If there is an informer he gets one-third of the whole amount. The govern- 
 ment gets one half, but there are very few informers, not more than a dozen; 
 they would not allow an officer to become an informer. I have heard Mr. 
 Brown, Mr. Isaacs, and Mr. Archer all say it, and have heard that Mr. Hart 
 said that he would not have an officer in the place that would insist upon becom- 
 ing an informer, because it was their duty to do this; that he had given them 
 a good berth, with little or nothing to do, except when called upon on express 
 occasions. ■ 
 
 Question. What officers did he refer to ? 
 
 Answer. Brown, Isaacs, and Archer, the three principal ones, aud Mr. Gra- 
 ham, I believe. 
 
 Question. Their business related to seizures ? 
 Answer. Yes, sir. 
 
12 
 
 GOVERNMENT CONTRACTS. 
 
 Question. Those were the men he would not allow to be informers ? 
 Answer. Yes, sir. 
 
 Question. They must do this work and receive their salary and not receive a 
 part of the proceeds of the sale ? 
 
 Answer. Yes, sir ; they were not entitled to it unless they they actually be- 
 came informers. 
 
 Question. They were required to give information without becoming in- 
 formers ? 
 
 Answer. Yes, sir. I knew of a case under Mr. Barney, when there was a 
 compromise between $12,000 and $25,000; I think that was four or five months 
 ago. The way I knew was, I had a tenant who was an informer, and he expected 
 to get $5,000 or $6,000. It was a case of leather. The parties lived in New- 
 ark. Ines, I think, is one of the names. That was settled. A case was made 
 out and the money was paid into court, TJhe informer was one Franklin, who 
 was doing business for E. K. Alburtis, 17 Wall street. They came to a deter- 
 mination to receive so much, and that was paid into court and distributed. He 
 was to get one quarter, but they disputed it with him. They said they had 
 the information beforehand, and would not allow him so much, and for politi- 
 cal purposes they cut down his one quarter. He told me he ought to have re- 
 ceived more than he did. He wrote a letter to the collector stating that he 
 claimed one quarter of that whenever paid into court, and he also gave informa- 
 tion that he was informer as to three or four other cases. 
 
 Question. What do you mean by "political purposes?" 
 
 Answer. I do not know ; he said there was some arrangement between them ; 
 he did not want to be too strong, for fear he would not get anything ; they pre- 
 tended to have had the information beforehand. 
 
 Question. But most of the information is furnished by officials in the custom- 
 house ? 
 
 Answer. Yes, sir. 
 
 Question. You never knew of a case when a good official ever received any 
 part of the forfeiture ? 
 
 Answer. I do not know of one. I think one or two tried to get it, but whether 
 they succeeded or not, I do not know. I know of a police officer who received 
 something as an informer. 
 
 Question. Do you know of the employment of a middle man, to whom those 
 violating the revenue laws are referred 1 
 
 Answer. Well, they would simply refer them either to Mr. Dunning (of the 
 firm of Dunning & O'Conner) or to Mr. Craig. Those are the two principals 
 who attend to the special business, because a lawyer who was not acquainted with 
 the revenue laws might advise the party to fight the case, which might not be 
 for the interest of the government. 
 
 Question. Do you know why it is that the Secretary of the Treasury in his 
 papers shows only between seventy and eighty thousand dollars received in 
 four years ? 
 
 Answer. I cannot imagine so small a sum as that. 
 Question. Y T ou did not include the salary in this $150,000 ? 
 Answer. No, sir. 
 
 Question. It was simply from fines and forfeitures ? 
 
 Answer. Yes, sir ; I have always thought so; that would make, I believe, 
 $900,000 in four years. 
 
 Question. You mean what the government gets and what they get ? 
 
 Answer. Yes, sir ; there must be over a hundred thousand dollars received 
 by each ; I never gave my attention, except to the time that I was there. 
 
 Question. You do not mean to include in that the salaries they received ? 
 
 Answer. Not at all, only the fines and penalties ; the idea that it does not 
 amount to $70,000 or $80,000 in four year is all nonsense. 
 
GOVERNMENT CONTRACTS. 
 
 13 
 
 Question. You say you were until August under Mr. Barney ? 
 Answer. Yes, sir. 
 
 Question. The detection of the smuggled property results more from the vigi- 
 lance of the employes of the custom-house than it does from the investigations 
 of the collector, the naval officer, or the surveyor ? 
 
 Answer. Yes, sir ; they have nothing to do with it, except from the vigilance 
 of the officers. L. C. 
 
 John W. Hunter, sworn: 
 
 Question. Who is with you in the custom-house 1 
 Answer. Samuel Gr. Ogden is auditor. I am assistant auditor. 
 Question. Does any part of the matter of seizures come within your knowl- 
 edge ? 
 
 Answer. The distribution of the money after it goes through the hands of 
 the court. 
 
 Question. Suppose a party has been defrauding the government year after 
 year, and the custom-house officials come down upon him suddenly and settle 
 with him ; that does not go into court ? 
 
 Answer. No, sir. 
 
 Question. But the money comes into your hands the same as if it went into 
 court ? 
 
 Answer. Yes, sir. I never knew of a case where money has been received 
 without its passing through our office. 
 
 Question. What is the annual amount of proceeds from seizures, whether they 
 are paid into court or are voluntarily paid for the purpose of preventing a suit ? 
 
 Answer. We could show by the books. 
 
 Question. Has there been much money paid out to informers ? 
 Answer. Not a great deal. 
 
 Question. Will your books show what has been paid out to informers ? 
 Answer. Yes, sir. 
 
 Question. Who are the men who go into the stores upon land and on ships 
 for the purpose of ascertaining if there be any breach of the revenue law 1 
 
 Answer. Persons connected with the custom-house. The collector may assign 
 anybody to that duty. 
 
 Question. The three revenue officers personally do not attend to it ( 
 
 Answer. Xo, sir. I suppose they go if it becomes necessary. 
 
 Question. The ferreting out is done by men under them ? 
 
 Answer. Yes, sir ; men in their employ and in the employ of the government ? 
 
 Question. Persons who do this ferreting out do not receive any part ? 
 
 Answer. Xo, sir. 
 
 Question. You know there is a rule that a government employe cannot be an 
 informer ? 
 
 Answer. Xo, sir. I do not know that to be a rule, and do not believe in it. 
 The employe does not say he claims to be an informer. 
 Question. Why not 1 
 Answer. He endangers his position ? 
 Question. How so ? 
 
 Answer. He is an appointee of the collector, and if he claims his portion as 
 an informer he detracts so much from the collector's share. He would be liable 
 to be removed from his office if he claimed to be an informer. 
 
 Question. Then you never knew of a government employe, even though he 
 ferrets out the whole matter, putting himself in the position of an informer so 
 as to draw anything 1 
 
 Answer. Xo, sir. 
 
 Question. So that the ferreting out, after all, and the saving to the govern- 
 
14 GOVERNMENT CONTRACTS. 
 
 ment, and the punishing for violations of the revenue law, are done principally 
 by men who receive no share of the proceeds of the sale ? 
 
 Answer. No share, unless it is given to them clandestinely. 
 
 Question. Then, how do you suppose it was that, when Congivs< passed the 
 law prohibiting the revenue officers from having a share of this money, seizures 
 should have ceased I 
 
 Answer. I suppose that they did not require the vigilance on the part of the 
 others that they would when they are interested. They do not voluntarily run 
 into danger unless they are profited by it. I think the officer who discovers a 
 fraud should be allowed to come in as an informer. It does not detract anything 
 from the United States. 
 
 Question. Under the law he may become an informer ? 
 
 Answer. I think Mr. Woodbury many years ago decided that he might. 
 
 Question. I understood that Mr. Hart made a rule that no government em- 
 ploye should be an informer, so, I suppose, that he should not take part of the 
 government plunder ? 
 
 Answer. There is no doubt about that. 
 
 James L. Benedict, sworn : 
 
 Question. Do you reside in this city ? 
 Answer. Yes, sir. 
 
 Question. Employed in the custom-house ? 
 
 Answer. I am deputy surveyor. 
 
 Question. How long have you been ] 
 
 Answer. Nine years. I came in with friend Cochran. 
 
 Question. What are the duties of your office principally; what have you in 
 charge ? 
 
 Answer. 1 am special deputy. 1 have general charge for the surveyor — act- 
 ing surveyor almost; that is to say, when the surveyor is away I have special 
 warrant to act as surveyor. 
 
 Question. Which of the revenue officers has principal charge of seizures for 
 violation of the revenue laws, whether they are upon shipboard or upon land ? 
 
 Answer. The seizures are always made by the officers, under the direction of 
 the surveyor. 
 
 Question. There are a few men who are assigned specially to that business 
 in the surveyor's office ? 
 
 Answer. There are three or four men who are specially assigned to that busi- 
 ness and a variety of other business — not exclusively to that; they have that 
 business especially to look after, although all the other officers of the custom- 
 house are obliged to look out for that thing. But they have men who specially 
 understand the business. 
 
 Question. Who are they? 
 
 Answer. Isaacs, Brown, Archer, and Graham are the four inspectors who 
 most often do that ; and Deputy Surveyor Brown, who was for eight years in- 
 spector, and made a deputy by Mr. Andrews. Complaints are generally passed 
 over from the surveyor to him, and they make the seizure. 
 
 Question. Do these government officials who make the seizures receive any 
 portion of the proceeds ? 
 
 Answer. No, sir; unless they get it as a gratuity from the office. 
 
 Question. Not as informers ? 
 
 Answer. They do not inform of all the seizures that are made; they know 
 nothing about it in nine cases out of ten, except the seizures are made from pas- 
 sengers on steamers and except as they are directed by the surveyor. 
 
 Question. Who reports to the surveyor ? 
 
 Answer. I cannot tell you how he gets his information. A great deal of in- 
 formation is sent to the surveyor by anonymous communication. 
 
GOVERNMENT CONTRACTS. 
 
 15 
 
 Question. At all events, some detections are made by government officials, 
 but these gentlemen do not receive any portion of the proceeds of the sales 1 
 
 Answer. These seizing officers 1 Xo ; it is a part of their official business. If 
 the appraiser or any other officer discovers a fraud, it is his duty to communi- 
 cate it. 
 
 Question. The law gives one-fourth to the informer '? 
 
 Answer. Yes, sir; but I have always understood that to mean an outsider — 
 one not connected with the government in any way. 
 
 Question. Was the rule established in any administration — it is acted upon, 
 at all events — that they cannot be informers ? 
 
 Answer. It has always been acted upon since I have been in the custom- 
 house. I have never heard of their being paid. 
 
 Edward M. Marsh, sworn : 
 Question. Do you reside in this city I 
 Answer. Yes, sir. 
 
 Question. Have you been employed in the custom-house ? 
 Answer. Y^es, sir ; three years and ten months ; left October last. 
 Question. What is your business ? 
 Answer. Inspector. 
 
 Question. Can you state anything about the way business has been conducted 
 in the custom-house with any party ? 
 
 Answer. Yes. sir. Brown, Isaacs, and Archer seem to be the privileged 
 characters ; they take upon themselves full authority about examining baggage, 
 and they examine baggage which no other inspector dare undertake to examine ; 
 and, in fact, they passed baggage without examining which no other inspector 
 dares to pass ; by whose instruction nobody knows but themselves, and in a 
 great many cases they receive money for passing baggage. Mr. Oldering is one 
 of the men through whose hands money has been passed to Mr. Brown, I think. 
 
 Wm. C. H. Waddell, sworn : 
 
 Question. Do you reside in this city 1 
 Answer. Yes, sir. 
 
 Question. Are you employed in the custom-house 'I 
 
 Answer. Yes, sir. 
 
 Question. In what capacity ? 
 
 Answer. Special clerk. 
 
 Question. How long have you been there ? 
 
 Answer. I have been there since August, 1860. 
 
 Question. Been special clerk all the time ? 
 
 Answer. Yes, sir. 
 
 Question. What are the duties of your office ? 
 
 Answer. It is in the law department now ; that is the term attached to it, and 
 the duties I have are connected with the courts and the custom-house suits. 
 Question. Have you anything to do with seizures 1 
 Answer. Yes, sir. 
 
 Question. You have been in that business since you have been there l 
 Answer. Yes, sir. 
 
 Question. Have you no record in your office for anything except what goes 
 to the United States courts ? 
 
 Answer. Xo, sir ; except those cases under a hundred dollars. 
 
 Question. So if any violation of the law is compromised, upon which no suit 
 is brought, you have no record of it and know nothing about it ? 
 
 Answer. I cannot answer that way. Any part of the record by me is so, 
 but of late on the books there are several instances noted where it did not go up 
 
16 
 
 GOVERNMENT CONTRACTS. 
 
 to the court. Those arc made by Mr. Bayard He said he did not think it was 
 right to be so. The naval officer and the deputy naval officer say it can pass 
 so. These arc cases in rem and cases of seizure which were entered on the 
 books. 1 do not know the cases themselves. 
 Question. What is the nature of the cases ? 
 
 Answer. Cases of seizure where the amount has been paid in. I have stated 
 to you before all the knowledge I had of the amount paid into court. This 
 is paid to the auditor direct. Now, I never paid any money to the auditor 
 direct, but money has been paid, so they inform me. 
 
 Question. Then it is true that cases are settled without going through the 
 court ? 
 
 Answer. So I understand, but I am not conversant with the cases myself. 
 Mr. Bayard says he thinks so. 
 
 Question. You say. that has been done of late ? 
 
 Answer. I have not heard of it over a few months, I suppose. 
 
 Question. Previous to that time you never heard anything of it ? 
 
 Answer. No, sir ; in no instance have I been cognizant of the particulars in 
 the case in which the payment went directly to the auditors, but I have no doubt 
 it is so. 
 
 George D. Bayard, sworn : 
 
 Question. Where do you reside ? 
 
 Answer. In Brooklyn. 
 
 Question. Employed in the custom-house ? 
 
 Answei\ Yes, sir ; I am one of the officers of the seizure bureau. 
 Question. How long have you been in that bureau? 
 
 Answer. I have been in it since it was organized. It was organized by Mr. 
 Oargill and myself. 
 
 Question. What is your duty? 
 
 Answer. Our duty is to have control of all the seizure records, books, &c. 
 
 Question. Have you not heard that there have been some seizure cases which 
 have not been sent to the office of the district attorney ? 
 
 Answer. I can only say that I have gone through the forms of one case, up 
 
 to the auditor's department, where it naturally closes, and as far as I was related 
 
 to it, it did not go to the district attorney's office. 
 
 ##*##*##* 
 
 Question. What was done with the goods after they were taken ? 
 Answer. They were placed in the custody of the collector. 
 Question. Where did he put them ? 
 Answer. In the safe. 
 
 Question. Who was collector at the time ? 
 
 Answer. Mr. Barney. I think it was in October last. 
 
 Question. This case you think did not go to the district attorney ? 
 
 Answer. I do not think it did. 
 
 Question. Have you stated that latterly in the custom-house seizure cases 
 sometimes have not gone to the district attorney's office ? 
 
 Answer. Our usual practice has always been to send these cases up to the 
 district attorney, but in this case of Fillner, I understood from the remarks 
 which were made to me, that it was not the intention of the parties to send it 
 to the office of the United States district attorney. 
 
 Question. Why not ? 
 
 Answer. I do not know. 
 
 Question. Who told you it was not the intention ? 
 Answer. I understood it from remarks. 
 Question. Who made the remarks ? 
 Answer. Mr. Dennison, the naval officer. 
 
GOVERNMENT CONTRACTS. 
 
 17 
 
 Question. Did he say why it was not to be sent 1 
 
 Answer. The ground of it, I believe, was that the fees of the clerks and 
 other officers were so great as to consume almost altogether the amount received 
 from the goods, and it would be no object to send where such extraordinary 
 fees and assessments were made upon the sums which might be received. I had 
 a conversation with the deputy naval officer on that subject, contending that, 
 under the eighty-ninth section of the act of 1799, all forfeitures were to be sent 
 to the district attorney's office and in all cases. That was my view of the 
 subject, and I had a discussion with him at the time, understanding, from what 
 I had heard, that a different practice was about to obtain. 
 
 Question. Now, have they not continued to do so from that time down ? 
 
 Answer. I cannot say as a matter of knowledge. 
 
 Question. Have you not understood so 1 
 
 Answer. Yes, sir; not directly from anybody, but the practice involves certain 
 forms deviating from the forms of the old practice, and hence, without any 
 direct communication from anybody, by the mere fact that forms are changed, 
 I know there has been a change in the practice. 
 
 Question. Did you ever have any conversation with Mr. Barney or Mr. An- 
 drews about that 1 
 
 Answer. Yes, sir; I have had a conversation with both of them about it. 
 Question. What did Mr. Barney say about it ? 
 Answer. He disapproved of it. 
 Question. What did Mr. Andrews say 1 
 
 Answer. Well, he did not seem to have any decided views one way or the 
 other in all the conversations I had with him. 
 
 Question. Did he say he would leave it to Mr. Dennison ? 
 
 Answer. Mr. Dennison and he have co-operated in the conduct and manage- 
 ment of this business. 
 
 Question. Did you or Mr. Cargill ever make up any books down there ? 
 
 Answer. We have a record of all the seizures. 
 
 Question. Did you make up any book from the old ones ? 
 
 Answer. Yes, sir; two or three; we made a record of unsettled cases. 
 
 Question. You were private secretary of Mr. Schell ? 
 
 Answer. Yes, sir ; after the resignation of Mr. Craig. 
 
 Question. Did you never have any conversation with Mr. Waddell or Mr. 
 Cargill ? 
 
 Answer. We speculated about it. 
 
 Question. You fixed on some amount, did you not T 
 
 Answer. No, sir. 
 
 Question. How could you talk about the amount without saying some amount 1 
 Answer. Because our conversation was not conducted with any idea of getting 
 at any numerical result. 
 
 Question. Did you say nothing about the amounts received 1 
 
 Answer. Never ; we merely spoke of the offices as being lucrative ones. 
 
 Question. How lucrative did you think they were ? 
 
 Answer. We regarded the general character of the sources of that income. 
 
 Question. You could not possibly stop there ; the idea would necessarily 
 come, how much it amounted to. 
 
 Answer. We never made any calculation as to the amounts received. 
 
 Question. Did you never form any opinion in your own mind as to how much 
 they received ? 
 
 Answer. Yes, sir; about $30,000 a year, possibly, over and above their sal- 
 aries, being the proceeds of fines, penalties, and forfeitures. 
 Question. What did you base that opinion upon 1 
 
 Answer. Upon my knowledge of the business of the office in which I was 
 engaged. 
 
 H. Rep. Com. 50 2 
 
18 
 
 GOVERNMENT CONTRACTS 
 
 Question. Based upon your actual business and records in the office ? 
 Answer. Yes, sir. 
 
 James B. Craig, sworn : 
 
 Question. You say that the collector is personally responsible for a wrongful 
 seizure ? 
 
 Answer. Yes, sir. 
 
 Question. No other revenue officer 1 
 
 Answer. The seizure is generally made in the name of the collector ; the other 
 officers give him a bond to bear their proportion of the damages. 
 
 Question. In the last twelve years have you heard that the collector has sus- 
 tained any damage ? 
 
 Answer. I have known of the matter only since 1853. 
 
 Question. Since 1853 have you heard that the collector has incurred any 
 damage by his seizures ? 
 
 Answer. There has not, in that time, been any judgment for damages obtained 
 against the collector. 
 
 Herman Batzer, sworn : 
 
 #*#*##**# 
 
 Question. You did not negotiate this thing yourself, except through your 
 attorney ? 
 
 Answer. I did not ask my own attorney about it. I did not want to have a 
 lawsuit about it. Mr. Dunning being the attorney — I was advised to go to him 
 by the men who came into my store — I tliought I would go there and have it 
 fixed. 
 
 Question. You understood he was interested with those men ? 
 Answer. He did. not speak so. I should judge he was; and then I do not 
 doubt at all he was interested. 
 
 Question. They were very anxious to have you go to Mr. Dunning ? 
 Answer. To be sure ; they immediately took me around to Mr. Dunning. 
 Question. Who were these men who took you around ? 
 
 Answer. One was Brown and the other was Isaacs. Of course these were 
 only servants. The other fellow, Hart, was the man who was surveyor at the 
 time. 
 
 Question. These were the two men who pounced upon you, Brown and Isaacs? 
 
 Answer. They were left in the store to watch it. They took hold of all the 
 books; even went so far that Dunning said, "Oh, well, you had better settle 
 for $4,000." I said, "I cannot pay §4,000, because my circumstances would 
 not allow me to do it." The only reason I paid anything is because I did not 
 want to have a lawsuit about it. "Well," he said, " they have your books, and 
 say that you can afford to pay the amount." 
 
 Question. It was Brown and Isaacs who wanted you to go to Mr. Dunning ? 
 
 Answer. They took me by the aim and said, " You had better go down and 
 see him." I think Isaacs went with me ; went to show me there. 
 
 Question. Did he go in the room with you and introduce you ? 
 
 Answer. One — Isaacs or Brown — did. 
 
 Question. What did he say when he brought you to Mr. Dunning ? 
 Answer. He introduced me very friendly, and said that Mr. Batzer had a little 
 trouble and wished to be relieved. 
 
 Question. What said Mr. Dunning then? 
 
 Answer. He talked very smart about it; of course he never appeared to me 
 or wanted to show that he was any way interested, and, of course, he went with 
 me and tried to play my counsel before the others — went with me several days. 
 
 Question. Where did he call? 
 
 Answer. At the custom-house, to see Mr. Hart. And they taxed me accord- 
 
GOVERNMENT CONTRACTS. 
 
 19 
 
 ing to the goods I had in store ; they found all the goods I had, and taxed me 
 according to the goods I had. I was asked how many goods I had. I told 
 them I had such and such goods. They then found out I had not given up all 
 the goods for them to take hold of, because the goods were not in the invoices. 
 They found it out and then they say: "now you should not do so, because we 
 can tax you for a good deal more if we choose to." 
 
 Question. They took the goods that were not mentioned in the invoices they 
 complained of? 
 
 Answer. They took the whole; all I had. 
 
 Question. Had you goods in your store that did not come in the invoices ? 
 Answer. To be sure I had. 
 
 Isaac Hamburger sworn: 
 
 Question. Do you live in this city? 
 Answer. Yes, sir- 
 Question. What is your business 1 
 Answer. Importer of fancy goods. 
 
 Question. Have the custom-house officials made any seizures of your goods ? 
 Answer. Yes, sir. 
 Question. When 1 
 
 Answer. The latter part of J anuary . 
 
 Question. What did they seize ? 
 
 Answer. The whole stock of goods. 
 
 Question. Did they the first day speak about settling 1 
 
 Answer. The first day they told me to come around and see the naval officer. 
 
 Question. Did you go ] 
 
 Answer. Yes, sir; I went with a lawyer. 
 
 Question. Who did you take with you ? 
 
 Answer. Mr. Dunning. 
 
 Question. How came you to go to Mr. Dunning ] 
 Answer. They told me to go to Mr. Dimning. 
 Question. What was the point ? 
 
 Answer. That the duty, in some instances, had not been paid on the inland 
 freight in Europe, and, in some instances, the duties had been paid on those 
 charges. I consulted about half a dozen lawyers on that point. In some in- 
 stances these charges were not put on the bill, because Ave were under the im- 
 pression, at least so far as we knew the revenue law, it was not any part to have 
 duty paid on, and I believe in some instances it is not done. At any rate, those 
 lawyers told me that, in this case, when the neglect of such a revenue law is not 
 intentional, they could only raise the duty. 
 
 Question. Was this done with the intention of evading the revenue law ? 
 
 Answer. No, sir. 
 
 Question. You say that the opinion was that where it was not intentionally 
 done there could be no seizure. 
 Answer. So I understood. 
 
 Question. Did they first fix a price in money which they wanted you to pay ? 
 Answer. As far as I could learn the negotiation was something near $5,000. 
 The proposition was not made to me, but my lawyer. 
 Question. What did you say about that 1 
 Answer. I would not pay that. 
 Question. What then was done ? 
 
 Answer. So things went on for four or five days, going to and fro, and finally 
 it interfered a good deal with our business. They had charge of the store day 
 and night. We could not ship any goods, and had no books to do anything. 
 Considering all this and not wishing to have the trouble of a lawsuit, and con- 
 
20 GOVERNMENT CONTRACTS. 
 
 eideriii£ (although we could, as I was informed, recover our goods by giving 
 security, &c.) that it would injure us a good deal, even if we could gain. 
 
 Question. Who did you pay that money to? 
 
 Answer. It was paid by Mr. Dunning to the naval officer. 
 
 Question. Were you present? 
 
 Answer. Yes, sir. 
 
 Question. You went to the naval officer and paid it there ? 
 Answer. Yes, sir. 
 
 Question. When was this money paid ? 
 Answer. It was on the 1st of March — on Saturday. 
 Question. Did you get a receipt ? 
 Answer. No, sir. 
 
 Question. Did you ask for a receipt ? 
 
 Answer. Mr. Dunning told me beforehand that I could not get a receipt. 
 Question. How came he to tell you that ? 
 
 Answer. I told him in paying the money I would like to get a receipt, and 
 see that things were done straight. He said it was all right. It was paid to the 
 officer there, and I understood it was all right. 
 
 Question. When you spoke to Mr. Dunning about getting a receipt, he said 
 you could not get a receipt ? 
 
 Answer. Yes, sir ; he said it was not customary to get a receipt in paying 
 such money into the treasury. 
 
 Question. Were these goods in the store that they found fault about ? 
 
 Answer. No, sir. 
 
 Question. And at the time you had no goods that were on the invoice that 
 they found fault with ? 
 
 Answer. There was no particular claim raised. 
 
 Question. There was no particular lot of goods they were after ? 
 
 Answer. No, sir ; and the goods mentioned in the invoice they found fault 
 about was not in the store. 
 
 Question. Do you remember who recommended you to Mr. Dunning ? 
 
 Answer. Mr. Isaacs. 
 
 Robert Lee, sworn: 
 
 *##*#**#* 
 
 Question. What was his name ? 
 Answer. Thomas Brown. 
 
 Question. Do you know of any other case where he passed baggage without 
 examining it. 
 
 Answer. I saw him pass baggage several times without examining it. 
 Question. Did you see Isaacs do the same ? 
 Answer. Yes, sir. 
 
 Question. Did you ever see whether any money was paid by the passengers 
 to these men for passing their baggage without examination. 
 
 Answer. No, sir ; but I have heard rumors that they would go to the stores 
 and get presents. 
 
 Question. You never saw anything of it yourself ? 
 
 Answer. No, sir; a great many passengers would come and inquire for Mr. 
 Isaacs or Mr. Brown. 
 
 Question. Would they inquire specially for them ? 
 Answer. Yes, sir. 
 
 Question. When there were other custom-house officers there ? 
 Answer. Yes, sir ; they would inquire specially for them to save the trouble, 
 I suppose, of opening their trunks. 
 
GOVERNMENT CONTRACTS. 
 
 21 
 
 Question. The law requires trunks and everything to be opened and exam- 
 ined? 
 
 Answer. Yes, sir. 
 
 Henry A. Warts, sworn : 
 
 Question. What department were you in? 
 
 Answer. I was formerly inspector, recently in the warehouse department, 
 termed warehouse clerk, in charge of the store at 5 Whitehall street some three 
 years. 
 
 Question. Where goods were stored under general order ? 
 
 Answer. A bonded warehouse. I was an inspector in 1853 and 1854. Mr. 
 Isaacs, that now holds a position in a department, was on special duty with me 
 some five months. We made a seizure at Jersey City, consisting of some gold 
 watch movements and a lot of laces, and ladies' apparel, that is, under clothes, 
 chemisetts and sleeves, and Honiton lace and things of that character. We re- 
 covered these goods in a hotel in Jersey City. They came from the steamer 
 Alps, and Mr. Isaacs and Captain Rogers, who were storekeepers, appropriated 
 a large lot to their own use. 
 
 Question. They appropriated a good deal to their own use. 
 
 Answer. Mr. Isaacs and myself seized these goods in Jersey City, and had 
 them in Rogers's office. Mr. Rogers, Mr. Isaacs and myself were the only per- 
 sons present at the time. They were very nice things to look at, and having a 
 large family, Mr. Isaacs made the remark to me : Said he, "Harry, you had 
 better take some of these ; they will be very good for your daughters." I said 
 I have no right to these things. The property will be sold for a small price by 
 the government, and I said I should attend the sale and purchase there. Mr. 
 Isaacs and Mr. Rogers appropriated a number of articles to their own use. 
 The balance they took to the collector. 
 
 P. J. JOACHIMSON. 
 
 • *»#•**#*• 
 
 Question. Are they still doing that? 
 
 Answer. I do not know, for the custom-house, so far as the bar is concerned, 
 is a close corporation, Mr. Craig or Mr. Dunning being generally the counsel for 
 the other side. I have known instances where my clients reported to me that 
 they were directed by the custom-house officers to go to Mr. Dunning or to Mr. 
 Craig. * * * I know one man from Chicago came to me in a seizure case, 
 where a number of diamond rings had been taken off his wife's fingers. They 
 were appraised to the amount of $2,000 or more. They charged he was smug- 
 gling, and while I was negotiating he was actually taken by a custom-house 
 officer to Mr. Dunning. * * * The man came to consult with me, and the 
 next time he came and saw me with his friend he showed me Mr. Dunning's 
 direction in Mr. Isaac's handwriting, given him by Mr. Isaacs, telling him to go 
 to that man and he would settle it. They pretend that they will take the men 
 •to Mr. O'Conner, the greatest lawyer in New York. 
 
 Question. What is the effect of the present system of collecting the revenues, 
 or rather of enforcing the revenue laws ? 
 
 Answer. The present system is a very unsatisfactory one. It protects neither 
 
 the rights of the importer. It makes the whole thing a matter of dollars and 
 
 cents as between the revenue officers and the importers, with this disadvantage 
 
 to the importer : that no merchant, for the sake of his credit, can afford to have 
 
 it known that he has any difficulties with the custom-house. It ruins him. 
 ###*###### 
 
 Question. Is it not as easy, in the honest discharge of duty, to prevent smug- 
 gling in this port as it is to prevent slavers going out of this port % 
 
22 
 
 GOVERNMENT CONTRACTS. 
 
 Answer. It is more so if the intent and spirit of the law is fairly carried out. 
 
 Question. The fact that subordinates accept presents from merchants and 
 others, and the fact that the revenue officers will compromise for less than the 
 appraised value, would have a tendency to encourage smuggling? 
 
 Answer. It does. The fact that a man is not liable to personal penalty has 
 a tendency to make the thing a matter of dollars and cents and mere specula- 
 tion. 
 
 Question. What is the efTect of this system of administering the revenue 
 laws on the part of the revenue officers upon the honest merchant doing busi- 
 ness kere? 
 
 Answer. The merchant who desires no trouble with the custom-house will 
 have invoices at higher rates than the market value, having his private invoices 
 and selling at lower rates. ####*# 
 
 Question. When goods are seized in the store of the merchant, though im- 
 properly by the revenue officers or their subordinates, what remedy has the 
 merchant ? 
 
 Answer. None whatever. He must await the decision of the suit. 
 Question. Then the merchant is entirely at the mercy of the collector and his 
 subordinates ? 
 
 Answer. Yes, sir; and not until after the suit against the goods has been de- 
 termined has he any rights whatever. * * * * * 
 
 Question. I understand you to say that in many cases the merchant, to save 
 his credit and reputation at home, and with the houses abroad, would settle by 
 paying money when he felt that there was no just claim against him ? 
 
 Answer. Yes, sir ; and it is the constant advice given. 
 
 Question. Is there an additional reason to save embarrassment of their busi- 
 ness by the revenue officers? 
 
 Answer. Certainly. Men who have difficulty with the custom-house find 
 themselves embarrassed in all their subsequent transactions by delay, &c. 
 
 Samuel G-. Ogden, auditor in custom-house, sworn : 
 
 Question. Where money is paid voluntarily do you give receipts 1 
 Answer. The collector has given receipts, but where he has done it he has 
 required a consent from the counsel of the parties, because otherwise there might 
 be a claim upon him for having extorted the money or something of that kind. 
 
 Question. Is it proper for him to give a receipt where money has been paid 
 voluntarily ? 
 
 Answer. Yes, sir ; and this consent of the parties shows that the thing it 
 voluntary upon their part ; that it is not exacted ; that it is not levying black 
 ?nail. 
 
 Horatio F. Averill, sworn: 
 
 Question. How came you to go to Mr. Dunning ? 
 
 Answer. Isaac suggested that Mr. Dunning was familiar with the practice. 
 Question. Was he anxious you should go there ? 
 Answer. Rather ; he seemed to be. 
 
 Simon Mendelsox, sworn : 
 Question. Where do you reside ? 
 Answer. In this city ? 
 
 Question. Have you had any business connexion with the New York custom- 
 house ? 
 
 Answer. Yes, sir; they have seized my goods. 
 Question. When was this? 
 
GOVERNMENT CONTRACTS. 
 
 23 
 
 Answer. Quite recently ; in December last. One day they came to my store ; 
 the office is quite small, but there were eleven custom-house officers in it. * * * 
 Question. Who were present ? 
 
 Answer. There was of the chief authorities Mr. Dennison, the naval officer; 
 there was Mr. Andrews, he was there only for a moment ; there was Mr. Brown, 
 chief, I believe, of subordinates, and Isaacs and Archer. 
 
 Question. Who said it was implied in the warrant to seize your books 1 
 
 Answer. The man who read the paper, I believe it was Mr. Brown. 
 
 Question. Was there any such authority in the warrant ? 
 
 Answer. No, sir ; only to seize my goods. 
 
 Question. Did they seize on the books ? 
 
 Answer. They had ; I was not in when they came ; when I came the clerk told 
 me. The first thing they did was to jump to the safe and take out the books and 
 handed them to one man, who went down stairs and away with them. While I was 
 there they opened every drawer, and wanted me to open a private book having 
 a lock on it. I said I have nothing to fear ; I can open it if I want to, but I 
 said I do not like to see such proceedings ; I do not think you have a right to 
 come into my office ; but as they were going to wrench the lock off I opened it. 
 
 Question. What was the book that had the lock on ] 
 
 Answer. It was a private ledger, which had no reference to the business. 
 
 Question. They took that ? 
 
 Answer. Yes, sir. 
 
 Question. Did they take your bank book? 
 Answer. No, sir. 
 
 Question. Did they take your private papers ? 
 
 Answer. They made a selection. 
 ■ Question. What then did they do ? 
 
 Answer. They said the next morning I should go to the custom-house, I 
 believe to the surveyor's ; and they told me to go to the naval officer. I went 
 there, and I said, " Mr. Brown was yesterday in my store, will you now tell me 
 what the object of the seizure was, and what are your charges against me ? " 
 They said, "you are charged with having made fraudulent entries, with having 
 defrauded the United States of duties." I said I am not aware of it. Where 
 is it 1 They said it would take some time to make it out. They would in a 
 few days show me the charge. It took some days : I forget how many. 
 
 Question. They could not tell you right away ] 
 
 Answer. They could tell the nature of the charge but they could not specify. 
 They said they must first look at the books ; they must make it up, in fact, and 
 that would take some time ; and, in fact, they said they wanted a translator to 
 translate French letters, &c. Some time afterwards I went up again and asked 
 them if they were ready to tell me the charges against me. I wanted to know 
 the specification. They showed me a paper about eighteen inches long, on 
 which they made out, as the sum and substance, that I had not paid the duties 
 on $1,500 worth of goods. These $1,500 were made up by a dozen or more 
 importations. 
 
 Question. Different invoices ? 
 
 Answer. Yes, sir. 
 
 Question. At different times 1 
 
 Answer. Yes, sir ; a dozen or more invoices, imported at different times, which 
 they found did not quite correspond with figures they found in the books. I 
 have paid the United States about 840,000 duties. Do you think, I asked the 
 naval officer, that, for the sake of saving a paltry $200, that I would go to de- 
 frauding the United States, when the duties actually paid are of that amount ? 
 They said that was all very well, but they would proceed against me. Well, I 
 told them they might. They had taken away all the goods I had in the store, 
 
24 
 
 GOVERNMENT CONTRACTS. 
 
 still the specifications which they made did not include but one single case of 
 what they found in the store. 
 
 Question. After they took away your books what did they do with your goods 
 in the store ? 
 
 Answer. They put officers in charge. 
 
 Question. What then ? 
 
 Answer. They next said they would proceed against me. 
 Question. What did they do with your goods ? 
 Answer. Afterwards they took the goods away. 
 Question. All the goods in your store ? 
 Answer. Yes, sir. 
 
 Question. Where did they take them ? 
 
 Answer. Corner of New street and Exchange place. 
 
 Question. What was your business ? 
 
 Answer. Leather, calf skins ; they took even domestic goods I had in the 
 store. 
 
 Question. Even goods never imported ? 
 Answer. Yes, sir. 
 
 Question. How many of the goods they took away were mentioned in the 
 invoices which they claimed to be fraudulent ? 
 
 Answer. Only one single case. I am sorry I do not know the amount, but 
 was not $500 out of $20,000 or $16,000. 
 
 Question. You had about $16,000. 
 
 Answer. Yes, sir. 
 
 Question. There was not over $500 mentioned in the fraudulent invoices, as 
 they claimed. 
 
 Answer. Not over $500. 
 
 Question. Did you remonstrate with them on that point ? 
 
 Answer. Yes, sir. I said, you have taken away all my goods ; in the speci- 
 fication there are but one or two cases that can come under this. They said, 
 Oh, well, that is not so. 
 
 Question. You know it was so ? 
 
 Answer. I know that it was so. 
 
 Question. Did your books show as you have stated? 
 
 Answer. They showed me the specification in which they said so and so. 
 There is a difference of $50 on this invoice ; on this invoice is a difference of 
 $20 ; on this invoice a difference of a $100. 
 
 Question. How did they make out this difference? 
 
 Answer. By difference in charges they made out, in fact, in a dozen invoices 
 that there was an undervaluation of $1,500. On a single importation that 
 would be a very trifle. 
 
 Question. How long a time have these computations been running through? 
 
 Answer. I have been in business in New York since the month of August, 
 1860. 
 
 Question. They claimed a little on one invoice and a little on another. 
 
 Answer. Yes, sir ; and in that way. You know the charges on goods are 
 considered as belonging to them, such as charges for packing and shipping, 
 charges on the other side, for instance, from the place of manufacture to the 
 place of shipping. 
 
 Question. Was that the matter they went into? 
 
 Answer. They did not go into details. 
 
 Question. Did they charge that the goods were undervalued, or that the in- 
 voices did not have the charges on the other side ? 
 
 Answer. They did not go into details. They said I had defrauded the United 
 States on duties on $1,500. 
 
GOVERNMENT CONTRACTS. 
 
 25 
 
 Question. You did not understand whether it was an undervaluation or an 
 omission to put on the charges on the other side ? 
 Answer. They said it was undervaluation. 
 
 Question. They took those goods as stated, and of all those goods there was 
 but one case covered by the invoices ? 
 
 Answer. Yes, sir. They took also an importation, I forget how many cases, 
 which had come in at that time. 
 
 Question. They took those from the ship ? 
 
 Answer. Yes, sir. 
 
 Question. Did they charge that those were undervalued 1 
 Answer. Yes, sir; all was included in the $1,500; in fact, they wanted to 
 make out that, perhaps, on $200,000 the duties had not been paid on $1,500. 
 Question. Had those goods been undervalued, in your judgment? 
 Answer. Not a particle. 
 
 Question. In your judgment, you had paid the full and legal amount of duty 
 to the United States ? 
 
 Answer. Yes, sir. I also said, if you consider me dishonest it is very easy 
 to get at the true value of the article ; there are plenty of people that deal in it. 
 I also told them they should compare my invoices with the invoices of others 
 in the same business. I was answered, we don't believe in invoices ; in other 
 words, all the world are rogues. 
 
 Question. They took away your goods and you got their charges against you. 
 What else was done % 
 
 Answer. I told them to proceed against me. The next step to proceed against 
 me was to have those goods valued, and then I would have to give bail, two 
 sureties, each for double the amount of the goods. 
 
 Question. That would have been over $30,000 ? 
 
 Answer. Yes, sir; I would have to give 8100,000 security. 
 
 Question. Did you consult a lawyer? 
 
 Answer. Yes, sir. 
 
 Question. Who? 
 
 Answer. Mr. Dunning. 
 
 Question. How came you to consult Mr. Dunning ? 
 Answer. He was recommended. 
 Question. By whom ? 
 
 Answer. I know it was one of them ; but, surely, I could not tell the name. 
 There were three different people who took me aside and told me I should em- 
 ploy this man and that man. 
 
 Question. Who took you aside ; these custom-house officers ? 
 
 Answer. Yes, sir. 
 
 Question. Who did they tell you to employ ? 
 Answer. Mr. so and so. 
 Question. Who did they name ? 
 
 Answer. Mr. Craig ; one said Mr. Craig or Mr. Dunning. 
 Question. Did they name any others that you remember ] 
 Answer. No, sir. 
 
 Question. Who named them to you 1 
 
 Answer. That I could not be sure of. 
 
 Question. What did they say when they took you aside ? 
 
 Answer. All said this matter will be blown over soon. Of course, I looked 
 rather glum. I saw this was the commencement of ruiu, which it really might 
 have proved. They said go to this man. As I heard that Mr. Dunning was 
 partner of Charles O'Connor, as I knew that, or got to know that, I went to Mr. 
 Dunning. 
 
 Question. When I first asked you who first recommended you to go there, 
 you hesitated to answer. 
 
26 
 
 GOVERNMENT CONTRACTS. 
 
 Answer. Yes, sir. 
 
 Question. Why should you hesitate to answer ? 
 
 Answer. I do not know who told me so, and when I have employed a lawyer 
 I do not like to bring him into any trouble. I do not know that he has done 
 any wrong in it. 
 
 Question. They advised you to see Mr. Dunning, and you went there ? 
 
 Answer. Yes, sir. 
 
 Question. What did you do then ? 
 
 Answer. Mr. Dunning went at it to get the matter in shape. I thought if I 
 proceeded against them, or let them proceed against me, (I threatened to sue 
 them if they did not sue me quick,) I would get my books back, so I could 
 proceed with business ; but I never could get my books, still less could I get 
 my goods ; it was so clear and patent that they wanted to force me into some- 
 thing. 
 
 Question. They were not willing to let you have your books ? 
 
 Answer. No, sir ; they said they wanted them. When I wanted any satis- 
 faction, they said, in a little while ; and the little while ran on, and ran on ; in 
 fact, I would have been ruined if I bad not come to something. They would 
 have kept my goods on the strength of what they called a seizure. They 
 could proceed against but one case. They might as well have given back the 
 others ; but there was nothing of the kind done. Times were not easy at the 
 time, and it was not easy to find securities for $60,000 each ; besides, I did not 
 like to ask friends to go security. Moreover, if I had brought those securities 
 I was told it was their option to reject them. 
 
 Question. Who told you that? 
 
 Answer. Mr. Dunning. And then I should have to leave them the goods ; 
 and I was told, and I knew also, that a suit with the custom-house might take 
 a couple of years. 
 
 Question. Who told you that? 
 
 Answer. Mr. Dunning ; and I believe it is so. I saw it shown among mer- 
 chants that, if you have a suit with the United States to recover anything 
 from the United States, it requires a couple of years to come to a decision. I 
 saw if I could not get my books or goods, if I let the thing run on, I would 
 be a ruined man, because the business season was approaching. I was then 
 told the matter could be compromised. 
 
 Question. Who told you that? 
 
 Answer. Mr. Dunning. 
 
 Question. What then? 
 
 Answer. I had strenuously opposed any compromise, until I came to the full 
 conviction that, if I did not do such a thing, I could not get my books and 
 could not import anything; in fact, that I was entirely under their power. 
 Finally I consented to compromise. 
 
 Question. Had Mr. Dunning advised a compromise before this time? 
 
 Answer. No, sir ; Mr. Dunning did not. 
 
 Question. Who did recommend a compromise ? 
 
 Answer. He told me that they wanted a compromise ; he told me such a 
 thing could be compromised. 
 
 Question. He reminded you why it had better be done — how long it would 
 take? 
 
 Answer. Yes, sir ; he told me the chances ; he did not advise it. At last 
 they got me so that I could not go on with my business. 
 Question. What was then done ? 
 Answer It was compromised. 
 Question. What did they first ask you ? 
 
 Answer. I told Mr. Dunning I wanted to know what they would let me off 
 for. The answer was, it was to correspond to the amount of importation — the 
 
GOVERNMENT CONTRACTS. 
 
 27 
 
 amount of goods seized ; it was something like $10,000 or $12,000. I was 
 given to understand that. I never saw them directly. Mr. Dunning told me 
 so ; that was their estimate. 
 
 Question. They wanted $10,000 when their only charge against you was the 
 deficiency of duty on $1,500? 
 
 Answer. Yes, sir. 
 
 Question. What then ? 
 
 Answer. They took $5,000. I finally told them I would not mind a couple 
 of thousand dollars to get rid of them ; finally they said $6,000 or $7,000 ; 
 finally they took $5,000. I considered it an extortion, and nothing else. 
 
 Question. When they took these goods in your store, did they have them 
 appraised ? 
 
 Answer. No, sir ; they were going to have them appraised ; they were going 
 to proceed against me ; they were going to do everything. 
 
 Wm. W. Thomas, a custom-house broker, sworn : 
 
 Question. Do you know whether respectable merchants, for fear of difficulty 
 with custom-house officials here, also have their goods charged higher than they 
 are required to do in their invoices ? 
 
 Answer. Yes, sir ; I have had a case within the last two months, where I had 
 a large invoice of tobacco. I was ordered by the importer to enter it, making 
 an addition, at the time of the entry, of, I think, 15 per cent., for the purpose 
 of avoiding any trouble — the party at the same time representing that the 
 tobacco was invoiced at the correct value ; but, in consequence of difficulties 
 which other parties had had, or which he feared rather than have any trouble, 
 he would pay the duty on the additional 15 per cent. 
 
 Question. Was this an honorable house ? 
 
 Answer. A house of very high standing. * * * I make it a point in 
 my business, whenever this question is submitted to me, to advise the importer, 
 in all cases where he has any doubt in the matter, to make a heavy addition, so 
 as to avoid any difficulty, even when the invoice price is fair and honest. 
 
 Question. Is that frequently done ? 
 
 Answer. Yes, sir, it is ; it is of very common occurrence. 
 Question. With our best importers ? 
 
 Answer. Yes, sir; and on articles of their own purchase, where they think 
 another party may have paid more for them. 
 
 Question. Where they purchase goods for themselves, pay the price in the 
 foreign market, they make an addition beyond that 1 ? 
 
 Answer. Yes, sir; for instance, two parties go abroad; one buys heavily with 
 cash in hand, having an advantage over an order sent from New York. He 
 buys a large quantity of goods. In such cases as that cautious men are in the 
 habit of adding to their entries to prevent difficulties. I do not suppose that 
 during the last two years I have scarcely entered any article of brandy without 
 making an addition beyond the price for which it was purchased. * * * 
 
 Question. What class of houses have generally had their goods seized? 
 
 Answer. Generally the houses of foreigners. 
 
 Question. Have you any reason in your mind why they should seize foreign 
 houses rather than others? 
 
 Answer. They are less prepared with friends to assist them, and there is great 
 delicacy in foreign houses as to asking other houses to bond their goods. Foreign 
 houses are pretty cautious about signing their names to bonds. 
 
 Question. If I understand you right, as to the machinery of the custom-house, 
 the importer is entirely in their hands as to the appraisement of the goods ? 
 
 Answer. Entirely, sir; he has no voice at all in the matter. * * * 
 
 Question. Can efficient officers, to a great extent, prevent smuggling in this 
 port? 
 
28 
 
 GOVERNMENT CONTRACTS. 
 
 Answer. I think they can prevent it entirely. I think that whenever any 
 smuggling is committed it is owing to the negligence of the officers of the port, 
 to a great extent. 
 
 Question. Is it not as easy, in your judgment, to prevent smuggling as to pre- 
 vent fitting out slavers in this port? 
 
 Answer. Quite as easy ; and with regard to undervaluation there is no diffi- 
 culty whatever, that the board of appraisers, properly constituted, should prevent 
 anything of that kind. 
 
 Question. Is there any necessity, in an efficient and honest discharge of duty 
 on the part of the custom-house officers, that invoices should run from month to 
 month and from year to year without undervaluation being detected ? 
 
 Answer. No, sir. 
 
 Question. Ought it not to be detected at the time the goods are present to 
 answer ? 
 
 Answer. Yes, sir. 
 
 Question. Can you find any excuse for the custom-house officers, after the 
 lapse of six months or a year, to then pretend to discover that there has been a 
 fraud? 
 
 Answer. No, sir ; if the proper appointments are made it is impossible for 
 goods to pass undervalued, except at a slight percentage. 
 
 Question. It would not then be possible for the goods to get from the ware- 
 houses into the merchants' stores at an undervaluation? 
 
 Answer. No, sir; there might be a slight undervaluation; there might be a 
 difference of opinion sometimes from five to ten per cent. 
 
 Question. If these men understand their business they will detect the under 
 valuation at the time the goods are in port? 
 
 Answer. Yes, sir. 
 
 Question. Are not these men as capable of knowing the undervaluation at the 
 time they are first entered into the port as years afterwards? 
 
 Answer. Yes, sir; they ought to know them at the time, because the valuation 
 is to be at the time of the shipment. Here are, for instance, half a dozen men 
 importing goods of the same kind ; out of this half dozen they know there are 
 several correct men, and they can take those as standards and test the value by 
 these standards. 
 
 THE LABOR CONTRACT. 
 
 The next subject of inquiry was, what is generally known as the 
 labor contract for hauling goods from ships and bonded warehouses to 
 the appraiser's store, and all the labor of handling while there, made 
 in August, 1859, to extend three years from the 5th day of September 
 following. 
 
 This contract was made by collector Schell, approved by Howell 
 Cobb, then Secretary of the Treasury, on the one part, and W. N. Mc- 
 Intire and his associates on the other. 
 
 This labor was formerly employed by the collector, and it was 
 claimed much was to be saved to the government by this contract. 
 Many democrats during Buchanan's administration opposed it; and in 
 the 36th Congress a committee was appointed to examine in relation 
 to the same ; but the attempt to annul it was unsuccessful. At the 
 commencement of this administration, Mr. Mclntire and his associ- 
 ates were fearful that it would not be sanctioned, if in their hands — 
 they being democrats ; and they sold or pretended to sell their in- 
 terest in the contract to Simon Stevens and Luther B. Wyman . 
 
GOVERNMENT CONTRACTS. 
 
 29 
 
 On the 5th day of February, 1862, I introduced the following, 
 which was unanimously adopted in the House : 
 
 Resolved, That the Secretary of the Treasury be directed to furnish this 
 House with a copy of the contract made by him or his department for hand- 
 ling, opening, assorting, and general delivery of foreign goods in the city of 
 New York, usually called the labor contract or general orders contract ; and 
 shall also inform this House whether the said labor is now done by the original 
 parties to said contract, or whether said contract has been assigned ; if so, to 
 whom, and for what consideration. Also, who are the owners of the ware- 
 houses where said goods are stored, and what rents are paid for their use. 
 
 This contract was profitable, and party machinery must be brought 
 into play, if possible, to save it. 
 
 Mr. Stevens was one of the parties who advanced, in fact, but 
 little of the money, and Mr. Wyman the other, who seems to have 
 not been known in the transaction at all, further than using his name, 
 while William Allen Butler, then and now law partner of Collector 
 Barney, was the lawyer of the transaction, and who received Mr. 
 Wyman' s share of the contract. He says " that the nominal consid- 
 eration for this transfer was $20,000. I understood that, to a consid- 
 erable extent, an interest of the original contractors was retained." 
 Speaking of Mr. Wyman, he says, " my knowledge of him led to his 
 being selected, with the consent of all parties, to act as attorney in 
 conjunction with Mr. Stevens, and to take the transfer jointly with 
 him." 
 
 So everything was supposed to be quietly arranged in the law office 
 of Barney & Co. to weld that contract on this administration, but the 
 whole matter was so apparent that when the attention of Secretary 
 Chase was called to it he refused to renew it. 
 
 A very significant fact is the overshadowing influence which the 
 contractors had over Collector Barney in removing and appointing to 
 office. Whether the mere fact that the business was transacted in 
 his office, or more substantial reasons weighed, the public must judge 
 from the circumstances. 
 
 The country is benefited by the breaking up of this contract, for 
 Mr. Barney swears it will probably save to the treasury $37,000 annu- 
 ally. I have no doubt that a labor contract let to the lowest bidder 
 would save an additional $37,000. 
 
 The original contractors had also a large portion of the general 
 order business on the North river, in fact, the most lucrative part of 
 that monopoly. It will be remembered that the collector has control 
 and can designate those stores which shall be allowed to store goods 
 on general order. It was not only suggested to the original firm that 
 there was danger that a republican administration would fail to renew 
 this contract in democratic hands, but it was intimated that the gen- 
 eral order ^business would be taken from them unless other parties 
 were taken in the contract. Mr. Barney had control of the general 
 orders, and the contractors must have been fully satisfied that some 
 one had authority to speak for Mr. Barney; so, rather than loose the 
 whole, they surrendered a part. 
 
30 
 
 GOVERNMENT CONTRACTS. 
 
 The following is a portion of Mr. Stevens's testimony, taken 
 December 22 : 
 
 Question. Were you, or were you not, interested in what is called 
 the labor contract at the public stores? 
 Answer. I was. 
 
 Question. From what time to what time? 
 
 Answer. From the 11th of May, l&Gl, until about the 6th or 7th of 
 September, 1802. 
 
 Question. Who else was interested with you in the contract during 
 that time? 
 
 Answer. Mr. Luther B. Wyman. 
 
 Question. Any other person? 
 
 Answer. 1 know of no other person directly interested. 
 Question. Any other person indirectly? 
 
 Answer. I represented one half the contract and Luther B. Wyman 
 represented the other half. 
 
 Question. Be kind enough to tell us whether anybody else had any 
 direct or indirect interest in it? 
 
 Answer. I represented one half of it; it was in my name; I bought 
 it and paid for it. * * * * * * 
 
 Question. Did anybody have any indirect interest in any portion of 
 the contract except what you represented? 
 
 Answer. I have only my suppositions. 
 
 Question. What do you know about that matter? 
 
 Answer. That I was requested to pay one half of the profits, what- 
 ever they might be, over and above expenses, to William Allen But- 
 ler. Mr. Butler stated that he was the attorney for Mr. Wyman. 
 Payments were so made and receipt therefor given by William Allen 
 Butler, as attorney for the first two payments. Subsequently receipts 
 were given by him for money paid to him, signed in initial, " W. A. 
 B." Then and from that day all payments were made to him and 
 receipts given by him, and so signed, with the exception of some few 
 payments which were made to George W. Parsons, who sometimes 
 receipted for them, simply " G. W. P.;" on some occasions tk W. A. 
 B. per G. W. P.," and sometimes " G. W. P. for W. A. B." 
 
 Question. Who is this William Allen Butler? 
 
 Answer. He is of the law firm of Barney, Butler & Parsons. 
 
 Question. Who is this Mr. Parsons ? 
 
 Answer. He is of the firm of Barney, Butler & Parsons. 
 
 Question. Who is the Barney of that firm? 
 
 Answer. Hiram Barney, collector of the port of New York. 
 
 Question. Is that firm now in business here? 
 
 Answer. Yes, sir. 
 
 Question. Did you pay any of these proceeds to Mr. Wyman him- 
 self? 
 
 Answer. No, sir. 
 
 Question. Did Mr. Wyman himself direct you where to pay those 
 proceeds? 
 
 Answer. He did not. 
 
GOVERNMENT CONTRACTS. 
 
 31 
 
 Question. Did you have any authority directly from Mr. Wyman 
 to pay them as you did ? 
 
 Answer. Simply on the day of the execution of the papers Mr. 
 William Allen Butler said, in the presence of Mr. Wyman, this in 
 purport: " As I am the attorney for Mr. Wyman, the net proceeds of 
 this contract will be paid to me." 
 
 Question. Did Mr. Wyman assent to that? 
 
 Answer. Mr. Wyman nodded assent. 
 
 Question. You took no paper to protect you for such payments ? 
 
 Answer. I did not, nor have 1 any such papers. 
 
 Question. Do you know, from Mr. Wyman or otherwise, whether 
 Mr. Wyman had any interest in this contract beyond the use of his 
 name ? 
 
 Answer. Mr. Wyman has on several occasions stated to me that he had 
 no interest, direct or indirect, in the contract otherivise than the use of 
 his name. 
 
 Question. Did he tell you who had the interest represented by his 
 name ? 
 
 Answer. He said he knew of nobody in this matter except William 
 Allen Butler, who claimed to act as attorney for the parties actually in 
 interest. 
 
 On the 3d day of January Mr. Butler was sworn. I was not 
 present at his examination. I say this in justice to myself, for 
 it seems almost impossible that his examination should have been 
 concluded and he not asked who were the real parties in interest 
 whom he represented when that was one of the subjects of investi- 
 gation. Only three questions were put to Mr. Butler. The first as 
 to his residence and business ; the second, "have you read the tes- 
 timony taken before this committee touching the transfer of the labor 
 contract?" and the third, "have you any statement to make touching 
 your connexion with that transfer of interest under the so-called labor 
 contract V* Mark the gentleness of the interrogatories. Was it be- 
 cause he was law partner of Mr. Barney ? I know not. Among other 
 things, to the last question, he says: "But whatever information I 
 had on the subject was derived in the course of my professional em- 
 ployment, and I acquired no positive knowledge about it. Funds 
 were placed in my hands by parties in interest." He evidently did 
 not mean Stevens or Wyman ; he nowhere states who were the parties 
 in interest, and most strange of all, he was not asked. 
 
 The connexion of the general orders with this contract shows 
 irresistibly who were behind the scene, because they there worked in 
 happy unison. 
 
 The following evidence will establish the positions above stated: 
 Henry A. Cargill, sworn: 
 
 Question. Do you know about the general order business ? 
 Answer. It was not under my supervision. I had charge of the labor contract 
 then. I had charge of 12 Broad street. I was deputy collector of that division. 
 Question. Were you there before that labor contract was given out? 
 Answer. Yes, sir; I had charge of the labor contract then. 
 Question. This contract was held by Bixby, Mclntire & Co.? 
 
32 
 
 GOVERNMENT CONTRACTS. 
 
 Answer. Yes, sir ; Mr. Craig was one of the partners. 
 Question. They held that until what time? 
 
 Answer. I do not know the exact month, but it must have been until Mr. 
 Barney had been there three or four months. 
 Question. How came they to sell out? 
 
 Answer. They we?e compelled to sell out ; I heard that they could not keep 
 the general order store, that it would be given to some one else if they did not 
 sell out this contract. They sold out, and got $21,000 cash for the labor con- 
 tract. They got a check from Barney, Parsons & Co. for a part of the amount. 
 I never saw the contract, and know of it simply from what Mr. Stevens and 
 Mr. Mclntire told me. I asked them what the contract was worth to them, 
 and they told me about $10,000 each, but now it appears there was so little 
 doing, and so little cartage, they would make at least $60,000 a year after this. 
 As long as there was no business doing they cut down the quantity of labor. 
 
 Question. Who told you this? 
 
 Answer. The conversation happened between Mclntire and myself, and 
 Simon Stevens, who bought the contract out. He said it was a little thing, and 
 that it was all right at headquarters. I asked him who was in it, and he said it 
 was all right. He said to me, you are all perfectly straight, and you need give 
 yourselves no uneasiness. I had offered to resign. After he came he wrote and 
 said he was not ready to accept my resignation. I had charge of 12 Broad 
 street, and he told me he wanted me to work the contract. He wanted me to post 
 him up. I was perfectly safe there. He told me it was a little ring ; it had 
 been all settled up, and the same intimation was given me by Mr. Mclntire. I 
 understood from Mr. Mclntyre that he could not hold it any longer, that he was 
 compelled to sell it, that the contract would be broken up, and he was compelled 
 to sell out. 
 
 Question. At this time Mather & Co. had the store for the general orders ? 
 Answer. They had the general order store for all the goods sent to the east 
 part of the city. 
 
 Question. Have they still possession of them ? 
 Answer. They had to sell them out with the contract. 
 
 Question. They could have held their labor contract, and all that Mr. Barney 
 could have taken away was the general order ? 
 
 Answer. They could have taken away the general order, but they could have 
 held the contract, except that they might have made a row about it and broken 
 it up. 
 
 Question. Why was not this labor contract good ? 
 
 Answer. They could only have broken it up by bringing it before Congress, 
 and they thought best to sell out because of intimations made to them. 
 Question. Do you know who negotiated with Mclntire & Co.? 
 Answer. I heard, but do not remember. 
 Question. What interest had Mr. Stevens? 
 Answer. I do not know. 
 
 Question. Do you know whether any percentage is paid for general orders ? 
 
 Answer. I never heard of it ; whether there is anything of that kind going 
 on I have no idea ; they used to say that Waldron made a good deal of money ; 
 he was poor when he went in there, but he went out worth seventy or eighty 
 thousand dollars? 
 
 Question. What is the effect or result of allowing revenue officers to have a 
 part of the property or money resulting from the sale of seized goods ? 
 
 Answer. Well, sir, it leads to a grasping disposition on the part of the collec- 
 tor, the naval officer, and the surveyor, to get a large sum of money; and very 
 frequently great injustice to the parties. 
 
 Question. Is it necessary to prevent smuggling that a part of the proceeds 
 should be distributed among the revenue officers? 
 
 Answer. Not at all, if men do their duty for which they are paid. 
 
GOVERNMENT CONTRACTS. 
 
 33 
 
 Question. In your opinion would not the laws be better administered, and 
 justice done better to all, by not allowing the revenue officers to share in the 
 seized goods ? 
 
 Answer. I do not think there would be as much vigilance, perhaps; it is all 
 done to get this large sum of money; it is not done to stop frauds as much as 
 to get this large sum of money. 
 
 Question. But the real watchfulness is by the men who receive no share in 
 this forfeiture 1 
 
 Answer. Yes, sir. 
 
 Cyril H. Brack ett, sworn : 
 Question. Where do you now reside I 
 Answer. In Brooklyn. 
 
 Question. Have you been employed in the custom-house 1 and if so, state 
 how long, and when. 
 
 Answer. My office is 115 Nassau street, New York city. A clerkship was 
 created, to which I was appointed by Secretary Guthrie, in July, 1856. 1 re- 
 mained employed in the custom-house until October, 1861 — first for a little over 
 three years, in the custom-house proper, fourth division. I was then transferred 
 to the sixth division, to a place as a clerk in the United States public store, 
 (then at 12 Broad street.) I went to 12 Broad street in October, 1859; was 
 there for two years. I became, while in the United States store, familiar with 
 the duties of the place I kept and the general duties of those surrounding me. 
 About two months previous to my going there the contract for doing the work 
 and labor of the United States store was made by Mr. Schell, who represented 
 Howell Cobb, Secretary of the Treasury, with John 0. Mather and his asso- 
 ciates. Very soon after I went to the United States store as clerk I became 
 satisfied that the contract was a bad one for the government — pernicious in its 
 influence. I took occasion to say so to my friends and other parties. I also 
 wrote two or three articles for the Brooklyn and Kentucky papers, calling atten- 
 tion to it, and expressing a hope that as the Secretary of the Treasury had, at 
 that time, retained the right of rescinding it, he would do so. Soon afterwards, 
 to wit, in November, I was called upon by John C. Mather at my desk, who 
 gave me to understand that he had perused my articles and heard of my speak- 
 ing against the contract. Upon that occasion he stated to me that if this was 
 persisted in I should be removed from my position as clerk. I paid but little 
 attention to the views he expressed, and continued consistently the line of con- 
 duct that I had adopted, writing articles afterward. About that time Mather 
 stated to me that his influence with Mr. Schell, the collector, and Secretary 
 Cobb, was pre-eminent ; that the contract would be continued, whether advan- 
 tageous to the service or not. During my clerkship in the United States public 
 store John Dempsey, sworn clerk, appointed by the collector, paid by the United 
 States government constantly, each week made the pay-roll for the contractors. 
 He was employed about half his time doing that, and the rest of his time did 
 little. Mr. Baum, a clerk in the storekeeper's office, called the roll for the con- 
 tractors in the morning, and did other duties for them. In the spring of 1861 
 the United States store was removed from 12 Broad street to 56 Broadway, and 
 some other numbers. The acting storekeeper, Munson Gray, chalked out or 
 measured out a place for the storekeeper's office in the building. A large number 
 of offices were made; the offices for the appraisers were formed. The offices 
 for all the examiners were also formed; but, as I remarked, Major Cray marked 
 out a place, on the floor, for the United States storekeeper's office. He soon 
 found that place was taken possession of by the contractors. It was finished in 
 a gorgeous manner for an office in that locality, at the expense of the govern- 
 ment. It has been constantly occupied by the contractors, who are Maiher, 
 H. Rep. Com. 50 3 
 
34 
 
 GOV KKN MENT CONTRACTS. 
 
 Bixhy cV Stevens. The expense of finishing the office must have been $400 at 
 least. That office they have since kept, rent free, and the United States store- 
 keeper's office was kept in a shingled, dilapidated room, from spring until Oc- 
 tober. During my clerkship in that office, in the spring of 1861, Mr. Mather 
 claimed to have sold out a large share of his interest to one Simon Stevens, a 
 man by the name of Wyman, and other parties not remembered by inc. He, 
 however, remained during the entire summer, closely attending to the locality, 
 being there frequently, and is there now. Stevens, who also claimed to be one 
 of the contractors, was also constantly there. Both Mather and Stevens claimed 
 to have a controlling influence over the clerks in the office, and to be capable of 
 removing or placing them at pleasure. 
 
 Question. Has Mr. Mather said anything to you since Mr. Barney has been 
 collector about finding fault with this contract, and what he could do with Mr. 
 Barney against you ? 
 
 Answer. Yes, sir. Mr..John C. Mather stated to me in September, 1861, 
 that he had no difficulty in managing Collector Barney ; that he could have me 
 removed any day ; that he managed Mr. Barney very easily — there was no diffi- 
 culty in the world about it; to use his words, that he was easily mesmerized; 
 that he had' got along passably well with the late collector, Schell, but some- 
 times Schell would be obstinate and exhibit Dutch resistancy, but that with Bar- 
 ney there was no difficulty in the world, and claimed to have with him Mr. 
 James Humphrey, late law partner of Mr. Barney, the three being bosom friends. 
 
 Question. What was the application he made of this ? 
 
 Answer. To show me how readily he could demolish me. 
 
 Question. Did he make some allusion to your opposition to this contract ? 
 
 Answer. Yes, sir ; he said in that matter that I had not spoken well of the 
 contract, and that such remarks would cause my removal. 
 
 Question. How long were you a clerk in the public store department 1 
 
 Answer. Two years. 
 
 Question. Were you there before this contract was made ? 
 Answer. About two months after it was made. 
 
 Question. Did you know anything about the expenses which these men were 
 subjected to every week in carrying on this contract ? 
 
 Answer. Some weeks I did and some weeks I did not ; my remembrance is 
 that I have seen pay-rolls footing up less than $500 per week. \ 
 
 Question. Is the amount paid by the government for having this labor done 
 there vastly more than the necessary expenses of having the labor done ? 
 
 Answer. The work was offered to be done at sixty per cent, after it was 
 given to them, by William M. Tweed, and he offered to give real estate security ; 
 he is a responsible man. He was anxious for the contract. Since that time, I 
 learn that half a dozen individuals of responsibility have offered to do the work 
 and take the contract for fifty per cent. 
 
 Question. Did Mather give you to understand how he obtained this contract? 
 
 Answer. On one occasion he said he obtained this contract from his long per- 
 sonal intimacy and subserviency to Howell Cobb. 
 
 Question. In what respect — where had this intimacy taken place, and what 
 relations had they sustained of business or otherwise ? 
 
 Answer. He was not as explicit in reference to that as he might have been, 
 but he said he had known Mr. Cobb intimately ; and he had always sustained 
 his pretensions privately for the presidency. 
 
 Question. Did he speak anything about his relations to railroads in Georgia? 
 
 Answer. He said he had relations with Cobb in Georgia in reference to 
 business matters, and intimated on one occasion that Mr. Cobb had been his 
 lawyer in connexion with contracts there on railroads, but he was not minute. 
 
 Question. He did not give you any detail of their railroad operations in 
 Georgia ? 
 
GOVERNMENT CONTRACTS. 
 
 35 
 
 Answer. Not anything of the kind. He said, upon two occasions, that Cobb 
 and he were as intimate as two brothers. Mather stated to me, while he was 
 canvassing the third congressional district, in the autumn of 1860, that he would 
 certainly be elected if patronage and money could elect him. Upon a suggestion 
 of mine that there were prejudices against his patronage and contract, he said 
 he knew there were, but he controlled the channel of obtaining labor in the 
 custom-house and stores ; that that was a very great political power. He gave 
 me that fact as a reason why he should be a democratic candidate for the House 
 of Representatives. After he took the held as a candidate nominated by a por- 
 tion of the unterrified democracy, he did put men on for different purposes in 
 addition to the usual number. These men were very promptly displaced ; as 
 soon as he left the ring, they were kicked out very quick. 
 
 Question. Did he say through what particular influences — did he say any- 
 thing to you about Mr. Barney? 
 
 Answer. He said, in reference to that point, that he was enabled to do that 
 from his intimacy with the law firm of Butler, Barney & Humphrey, from his 
 entire control of some of the members of that concern. 
 
 Question. Did he say, at any time, that this was forced upon him as a matter 
 of necessity by Barney or his friends, so that some one else should be interested ? 
 
 Answer. Yes, sir ; he upon one occasion stated to me that this arrangement — 
 this change — was forced upon him by the necessities of his position, more 
 especially by the collector. 
 
 Question. Did he explain why? 
 
 Answer. Only that they wished to make some money out of it. 
 Question. Did he say in this conversation how he was approached in this 
 matter ? 
 
 Answer. No ; he did not go into minute particulars, but he said, upon these 
 occasions, that he had himself put the project through, knowing the necessity 
 of it. 
 
 Question. Did he say it was necessary in order to save this contract, to pre- 
 vent its being broken up by the Secretary of the Treasury? 
 
 Answer. Yes, sir. He said it was necessary to take in republican material. 
 Question. In order to save the contract ? 
 Answer. Yes, sir. 
 
 Question. He expressed fear — thought certainly that the contract would be 
 overthrown if he did not do this ? 
 
 Answer. Yes, sir ; he did in every instance — a half a dozen instances — 
 always give that as a reason why he had taken this man into the contract, but 
 claimed the lion's share himself after all. 
 
 Question. You just spoke of the collector being connected with the matter ? 
 
 Answer. Yes, sir, through Mr. Humphrey. 
 
 Question. Since this contract has been obtained and other parties taken in, 
 have Mr. Mather and Mr. Bixby both been interested about the storehouse ? 
 Answer. Mr. Mather more so than he was previously. 
 Question. How about Bixby ? 
 
 Answer. He was during the summer at the United States store more fre- 
 quently than he was previously. 
 Question. Who of the new firm ? 
 Answer. Mr. Stevens. 
 Question. Mr. Humphrey? 
 
 Answer. Mr. Humphrey made occasional calls at the store. 
 Question. Mr. Wyman ? 
 
 Answer. He is unknown at the establishment to me and others. 
 Question. How did you learn that Mr. Wyman was interested in the con- 
 tract ? 
 
36 
 
 GOVERNMENT CONTRACTS. 
 
 Answer. Only from Mather's declaration, and from his name appearing in 
 the pay-book. 
 
 Question. As one of the contractors I 
 
 Answer. Yes. sir. Stevens, Wyman & Co. — that is the way I have seen the 
 receipts. A relation of this Mr. Wyman was appointed also as leading clerk in 
 the storekeeper's department. 
 
 IClJNSON GRAY, sworn: . 
 
 Question. Has Mr. Stevens made requirements upon the government officials 
 to obey orders ? 
 
 Answer. They have two clerks that they employ that are paid by the gov- 
 ernment. 
 
 Question. Doing this work I 
 Answer. Yes, sir. 
 
 Question. What clerks ; what is their position I 
 Answer. C. TV. Baum is one. 
 Question. What salary ? 
 Answer. $1,100. 
 
 Quesrkm. Who is the other clerk ? 
 
 Answer. John Dempsey. I think he has $800. 
 
 Question. What is their proper duty to the government ; what offices do they 
 fill as government officials ? 
 
 Answer. Baum is receiving clerk, to receive the goods ; and Dempsey 
 answers questions from the books, and is general clerk in the office. 
 
 Question. That is what the government expect of them ? 
 
 Answer. Yes, sir. 
 
 Question. How do they occupy their time ] 
 Answer. Baum acts as foreman for the contractors. 
 Question. Doing what ? 
 
 Answer. Foreman of the laborers of the contractors ; he calls the roll and 
 keeps an account of time and labor. 
 Question. What does Dempsey do ? 
 
 Answer. He makes out the pay-roll, and attends to paying off the men. 
 
 Question. Do these two men do any other work except this, of any amount? 
 
 Answer. They do some ; they do other work, but the work for the con- 
 tractors takes off a good deal of the time for the government. 
 
 Question. Does it destroy pretty much or nearly the value of their services 
 to the government ? 
 
 Answer. I think, in the case of Dempsey, it takes about two days in a week 
 of his time ; and Baum, more or less, every day. He goes through the store, 
 from one loft to another. 
 
 Question. Do you know whether any complaints of this have been made to 
 the collector? 
 
 Answer. Xo, I do not. I mentioned the subject to Mr. Steadwell, who is 
 deputy in charge, and he told me to let them continue on in the same way ? 
 
 Question. You formerly were chief clerk and then became storekeeper, who 
 appointed you storekeeper ? 
 
 Answer. Mr. Barney. 
 
 Question. When ? 
 
 Answer. I think about eight months ago. 
 
 Question. Have any other men been removed and men appointed, at the sug- 
 gestion of the contractors, as you have been informed ? 
 
 Answer. All the clerks in the office have been removed with the exception of 
 his Baum and Dempsey. 
 Answer. And others appointed in their places ? 
 
 \ 
 
GOVERNMENT CONTRACTS. 
 
 37 
 
 Answer. Yes, sir. 
 
 Question. This is done at the suggestion of the contractors ? 
 Answer. Yes, sir ; I think so. 
 
 Question. Who are the contractors who appear as the ostensible owners of 
 this contract ? 
 
 Answer. John C. Mather, Francis Bixby, Simon Stevens, and Mr. Wyman. 
 These are reputed to be the partners ; it is said that there are others. 
 Question. Is John C. Mather still interested in the store ? 
 Answer. He is in the office almost every day. 
 Question. Is Bixby there ? 
 Answer. Yes, occasionally. 
 
 Question. Since the change in the contract has not Mather been there more 
 than before ? 
 
 Answer. I think he has. 
 Question. Bixby about the same 1 
 Answer. About the same. 
 
 Question. How is it with Stevens \ * 
 Answer. He is there too. 
 Question. Is Mr. Wyman there ? 
 Answer. I have not seen him. 
 
 Question. You do not know of any other parties attending personally to the 
 matter 1 
 
 Answer. No, sir. 
 
 Question. At any time did the contractors refuse to allow the store to be 
 shut in pursuance of the rules 1 
 
 Answer. I recollect one time Mr. Stevens was in his office, and the night 
 watchman reported to me that his office could not be closed : that he had some 
 strange man there ; ana 1 it was kept open until some time smer the store was 
 closed, contrary to the rules of the store. 
 
 Question. Who furnish the night watchmen ? 
 
 Answer. The government. 
 
 Question. They are sworn officers ? 
 
 Answer. They are. 
 
 R. M. Blatchford, sworn. 
 
 Question. Do you know anything about the management of this labor con- 
 tract — the public store contract ? 
 Answer. No, sir. 
 
 Question. Do you know about the influence which these gentlemen, who are 
 contractors, exercise, in the removal and appointment of government officials — 
 clerks ] 
 
 Answer. I only know one instance, in which — I believe he was one of the 
 contractors — Mr. Stevens caused the removal of a young person I felt very much 
 interested in, and I went to see the collector on the subject, and whilst I was 
 talking with him about it Mr. Stevens came in, and I told him that this young 
 man had been removed ; that he was a friend of mine. He (Mr. Barney) said 
 he would not have removed him if he had known that I felt an interest in him ; 
 but he did not know it, and did not know very much about the removal. It was 
 done by Mr. Palmer, to whom the matter was committed ; he could not attend 
 to these things at all. He sent for Mr. Palmer, and he told him he had removed 
 him at the suggestion of Mr. Stevens. Mr. Stevens said when he came, there 
 had been some charges against him of not having been regular in his habits — 
 nothing against him at all as a clerk. That was the first I had ever heard of 
 that. And Mr. Stevens said, also, that he heard that he had talked about his public 
 store contract, and that he preferred to have some person there that would not talk 
 
38 
 
 GOVERNMENT CONTRACTS. 
 
 about it. The idea held out was that he was disagreeable because he had 
 spoken about these matters. He had been there eleven or twelve years and 
 knew everything about it. and Mr. Stevens intimated that he had another person 
 put in his place that was more agreeable ; the idea was that this man was not 
 agreeable, and not that he had ever neglected his duties. 
 Question. "What did Mr. Barney say aboul all this matter] 
 Answer, lie did not know anything aboul it, at least until he sent tor Mr. 
 Palmer and Mr. Stevens. And Mr. Palmer said that Mr. Stevens said there 
 w as some charge against the young man. He told him afterwards that he wanted 
 to see Mr. Stevens, and when Mr. Stevens came he said he had made no charge 
 against him. The idea was that Mr. Barney could not attend to these things : 
 he could not give his time and attention to it; that he was overwhelmed with 
 business, and w as obliged to commit it to others. 
 
 Question. This was the only circumstance you knew in connexion with these 
 contractors ! 
 
 Answer. That is all — that Mr. Stevens was the one that had caused the re- 
 ^moval of this young man, and one of the reasons was that he had been against 
 the contract. I applied very hard to have the young man restored, but did not 
 succeed. 
 
 GENERAL R0DER STORES. 
 
 The other matter of inquiry was the general order stores. There 
 are many bonded warehouses in the city of New York, but the col- 
 lector selects from them the general order stores. Within one day 
 after the arrival of a vessel in port, the captain obtains a general 
 order to unload his cargo, and all goods on which the duty has not 
 been paid are^to be taken to the stores, as designated by the collector, 
 to receive goods under general order. The evidence shows this to 
 be a lucrative business ; goods frequently are stored but a short time, 
 and sums are paid nearly double what the owners would have to pay 
 in other bonded warehouses. 
 
 In the examination of the 9th of September, when the revenue 
 officers were having the benefit of their defence, Hamilton Bruce, a 
 deputy collector, inquiring about the subject, was asked : 
 
 Question. Can there be any favoritism shown ? 
 
 Answer. No, sir; for, by direction of the collector, the goods go in 
 every instance into the nearest store of the district. 
 
 Mr. Bruce was evidently trying to serve the collector "too well," 
 for Mr. Barney in his own evidence says: 
 
 "The general order stores are designated by the collector out of 
 the bonded warehouses. The principle which governs me in selecting 
 the general order stores is that the location shall be convenient to the 
 place where the goods which go to the general order stores are 
 canded; that the accommodations in the building shall be sufficient 
 lar the district to be served, and that the parties who are proprietors 
 fo the stores shall be persons on wdhose responsibility and integrity I 
 ofn rely. 7 ' 
 
 Whereas the evidence fully shows that there not only was favor- 
 itism, but the collector did not make the selection, but gave the 
 general orders to certain parties who had no stores, bonded or other- 
 wise, and suffered them to go among those having general orders, and 
 
GOVERNMENT CONTRACTS. 
 
 89 
 
 compelled them to give a bonus of thirty per cent, for the privilege 
 of retaining it. This was certainly a refinement of extortion or cor- 
 ruption upon the practices of former administrations. Such a thing 
 was never known before, and was reserved for the party who had 
 promised ourselves and the nation that official corruption was to 
 cease, and retrenchment and reform were to be once more inaugu- 
 rated. Alas ! 4 ' like Dead sea fruits, they turned to ashes on the lips." 
 
 It does not appear that Mr. Barney received any part of this thirty 
 per cent., but it is clear that he was notified of these outrages, com- 
 mitted by the men on whom he had showered this bounty, and he did 
 not condemn or check it. 
 
 Some idea may be formed of the value of the general orders business 
 on the North river side, (which one witness says was in the ring 
 with the labor contract.) when it is shown to be worth about 
 $200,000. And the haste with which goods are sent by general 
 orders after the arrival of the vessel shows very much self-interest or 
 an overweening desire to aid friends. The following evidence will 
 establish the above propositions: 
 
 Johx Wilson, sworn: 
 
 Question. What is the general order of storage at the custom-house ? 
 
 Answer. Under the old law, vessels of a certain tonnage Avere entitled to a 
 general order, that is, for sailing vessels, five days — working days — after their 
 arrival. Well, that was changed. Before that Avas changed there Avas a laAv 
 put through by Congress by which steamers had the right, if the bill of lading 
 so expressed it, to discharge immediately upon entry, if they chose to do so. 
 Sailing vessels have been cut down to one day after their arrival for discharg- 
 ing ; they haA T e the right to go to Avork the next day, under a general order. 
 
 Question. You say they have one day for discharging ? 
 
 AnsAver. Xo; they have the right, after they have arrived here, to commence 
 and turn any man's cargo out who has not paid his duties, avIio, by some fault 
 in the custom-house or his oavii, has not paid his duty the first day after arrival. 
 
 Question. Who is benefited by that general order ? 
 
 Answer. Always the vessel and the proprietor of the store where the goods 
 are sent ; not the owner of the goods ; it is to his detriment. 
 
 Question. They get a general order for all goods to go there I 
 
 Answer. The papers are on board. Suppose you are an importer ; you have 
 got a cargo of goods coming here; the goods come here; the vessel takes her 
 general order immediately ; the store is right across the way, fifteen or tAventy 
 yards from the vessel; this is a long entry; it has taken some time to get 
 through the custom-house; you cannot get through; there is a great rush; you 
 have to go through all the forms, and you cannot get your permit through ; you 
 haA'e got a hundred packages of goods, and because you cannot get your permit 
 through those goods go into the store or on the sideAvalk, and A^ery likely do not 
 go into the store at all, yet they will charge you for a hundred packages SI 25, 
 and they haA~e never seen the inside of the store. 
 
 Question. Formerly, you say, sailing vessels had five days before general 
 orders Avere giA^en ? 
 
 AnsAver. Yes, sir. That Avas changed two years ago. 
 
 Question. To one day ? 
 
 AnsAver. Yes, sir; one day after arrival. 
 
 Question. Hoav is it with steamers ? 
 
40 
 
 GOVERNMENT CONTRACTS 
 
 Answer. Immediately on entering, it' they choose, if the l>ill of lading bo ex 
 
 pressed. 
 
 Question. The collector has the power of giving the general order and saying 
 what storehouse these goods shall enter? 
 Answer. Yes, sir. 
 
 Question. Are there different districts in the city ? 
 
 Answer. Yes, sir; there are quite a number of districts. 
 
 Question. Who fixed the prices of storage of goods in these w an-houses I 
 
 Answer. They generally fixed themselves. About three or four year.- ago a 
 great deal was said, and there was complaint by the merchants of New York 
 about tli«' exorbitant charges on those things coming into this general order of 
 storage, and a table was drawn up stating what the rates of storage should be, 
 and I think on the largest-sized packages the rates should be forty and forty, 
 that is, forty cents labor and forty cents storage, that is, for the first month. 
 Labor is never charged but once; that pays for putting and taking out; forty 
 cents storage is alw ays charged for the first month ; those are the rates, I should 
 say. I have got a case now where we are obliged to pay something like a dollar 
 and a half on the package, instead of eighty cents; it is a small matter. The 
 person does not want to go to the Secretary of the Treasury or the collector, 
 and so he lets it go. 
 
 Question. By whom was the rate of storage and labor fixed? 
 
 Answer. The complaint was drawn up and submitted to the Chamber of Com- 
 merce, and they thought that was a fair rate. The warehousemen, as a general 
 thing, do not go by those rates fixed by the Chamber of Commerce. 
 
 Question. Have the rates been increased latterly? 
 
 Answer. A ery much; they have now got up from 40 and 40 to 90 and 125, 
 and now we do not know where they will stop. 
 Question. Is that generally so now \ 
 
 Answer. 1 believe it is. I have paid a great deal of storage. 
 Question. Is it a matter of general complaint ! 
 
 Answer. Y'es, sir. I speak of my own merchants ; we do business for about 
 one hundred and twenty importers. 
 
 Question. In different parts of the city I 
 
 Answer. All over the city. We do business for Philadelphia and Boston, also. 
 Question. Different districts in this city ? 
 Answer. Yes, sir. 
 
 Question. Y'ou were speaking, a little while ago, about the collector proper 
 sharing in this ; if he shares in this, it is done, of course, with the proprietors 
 of stores \ 
 
 Answer. I do not know that it is. 
 
 Question. If he does, it is done with them ? 
 
 Answer. Yes, sir. 
 
 Question. Y'ou were speaking of Mr. Humphreys. 
 
 Answer. I said I always believed that Mr. Schell had some connexion with 
 the former men in the storage business, and Humphreys bought them out. 
 Question. Who, under Mr. Schell, had control of the general orders of goods? 
 Answer. Quite a number. 1 do not know that I can give all of them. 
 Question. Mention some of them. 
 
 Answer. Mclntire, Bixby &z Co. was the main firm; they had the contract at 
 No. 12 Broad street; and there was Mr. Squiers, Sand 10 Bridge street, who, 1 
 think, was always fair and straightforward; and there was Mr. Livingston, M. 
 S. Briggs & Co., and others. 
 
 Question. Bixby, Mclntire & Co.; what had they to do with the general 
 orders, and how were they interested in the general order of storage? had they 
 a storehouse in which they stored goods ? 
 
 Answer. Yes, sir. 
 
GOVERNMENT CONTRACTS. 
 
 41 
 
 Question. Where is (heir warehouse ? 
 
 Answer. They had 56 and 78 Greenwich street, and 345 and 371 Washing- 
 ton street, and I think they had (I won't be certain) also 102 and 104 North 
 Moore street. 
 
 Question. Did they own these stores ? 
 
 Answer. Rented them, I believe. 
 
 Question. Are they interested now in the general orders? 
 Answer. I believe they are in part. 
 Question. Do you know who is interested with them ? 
 Answer. No, sir. 
 
 Question. Do you know whether Mr. Humphrey is concerned in any of the 
 stores I 
 
 Answer. Only from what was said to me. 
 
 Question. What was said to you ; by whom, and where ? 
 
 Answer. What was said to me was by the storekeeper. I asked if Mclntire, 
 Bixley & Co. carried on the store, (they were the former proprietors,) aud he 
 said they did not ; but that Mr. Humphrey had bought them out. I asked if 
 it was James Humphrey, broker, from Brooklyn. I was told it was. I asked 
 if he was ever there, and he said he came in some times and looked about and 
 went out again. I remarked that I supposed he came and got his money and 
 then quit ; that was all that was said. 
 
 Question. These men first hire the store ? 
 
 Answer. Yes, sir. 
 
 Question. And then the business they do is the receiving, keeping, and stor- 
 ing of the goods sent there under general orders \ 
 
 Answer. Yes, sir; and the more they swindle the merchants of New Y~ork r 
 the more money they make ; because they do swindle them. 
 
 Question. They do now in this high rate of charges \ 
 
 Answer. Yes, sir; it is shameful, disgraceful — I believe that. 
 
 Edward C. Johnson, sworn: 
 
 Question. Where do you reside ? ■ 
 
 Answer. I reside in this city. 
 
 Question. What is your business? 
 
 Answer. I am in the bonded warehouse business. 
 
 Question. How long have you been in the bonded warehouse business ? 
 
 Answer. Nearly ten years. 
 
 Question. Where are your stores I 
 
 Answer. 6, 8, and 10 Bridge street. 
 
 Question. Are you alone? 
 
 Answer. Of the firm of Squire & Johnson. 
 
 Question. You have been in the bonded warehouse business ten years ? 
 Answer. Y'es, sir. 
 
 Question. During that time have you stored goods under the general order ? 
 Answer. Part of the time. This general order business was not established 
 until during the last five or six years. 
 
 Question. How were goods given under the general order ? 
 Answer. The collector had power to send them to any store he pleased. 
 Question. And the collector would send them to your store ? 
 Answer. Yes, sir. 
 
 Question. It is now five or six years since the system of general orders was 
 introduced ? 
 
 Answer. Y^es, sir. 
 
 Question. Still the colleotor has the power to send where he pleases ? 
 Answer. I think he has. 
 
42 
 
 GOVERN M ENT CONTRACTS. 
 
 Question. And can ehange it at pleasure I 
 
 Answer. Yes, sir; this collector has changed it. There is no law of Con- 
 gress abort it. 
 
 Question. Ea this city divided into districts ( 
 Answer. Yes, sir. 
 
 Question. How many districts are there now I 
 
 Answer. There were before the present collector came in more than now. 
 The districts od the East river are from Battery to Wall st reet, from Wall street 
 to Pier 45, and from Pier 45, all above on the East river. The vessels coming 
 within a given district are required to discharge at the store of their district. 
 
 Question. Previous to five years ago there was a special order made in every 
 case ? 
 
 Answer. Yes, sir; except that if a merchant has regular invoices, and all 
 straight, he can put them where he pleases. 
 
 Question. But if he cannot get his orders through the custom-house before 
 the time for unloading, they have got to go under general order ? 
 
 Answer. Yes, sir; merchants sometimes, instead of getting merchants' orders 
 prefer to put their goods in bond, because they do not want to pay duties on 
 them immediately. We took in ten thousand chests of tea yesterday under 
 merchants' orders. 
 
 Question. You received those ten thousand chests of tea under merchants' 
 orders. They could not order them to any other place % 
 Answer. No, sir. 
 
 Question. Suppose this ship lands in your district, the collector would not 
 give a permit to take the goods into another district % 
 
 Answer. Yes, sir ; anywhere the merchant pleases, in a bonded warehouse. 
 
 Question. Then the merchants can put their goods where they choose % 
 
 Answer. They can, if they have an invoice and everything is regular. 
 
 Question. Then it is only those who do not get their invoices through in 
 the required time that have to go to the general store % 
 
 Answer. Yes, sir." 
 
 Question. But those who get them through in time may put them where they 
 please ? 
 
 Answer. Yes, sir. 
 
 Question. But they must put them in a bonded warehouse I 
 Answer. Yes, sir, if the duties are not paid. 
 
 Question. Do you give security to anybody for the safe keeping of those 
 goods '? 
 
 Answer. Yes, sir; we give bonds to the United States government that we 
 will keep those goods until the duties are paid ; and if they are stolen or lost, 
 that we will pay for them and pay the duties. 
 
 Question. You occupy a sort of official relation to the government 1 
 
 Answer. Certainly. 
 
 Question. That is the reason they cannot go into a private storehouse? 
 Answer. Yes, sir. 
 
 Question. You become responsible to the government for the duties? 
 Answer. Yes, sir. 
 
 Question. And to the owners of the goods ) 
 Answer. Yes, sir. 
 
 Question. Have these districts been changed or increased since Mr. Barney 
 came in ? 
 
 Answer. No, sir; I think that they have been diminished. I think there 
 may be nominally just as many districts, only Bowen has a commission on the 
 two upper ones on the East river. Merle & Co. have one of the general order 
 stores and we have one. 
 
GOVERNMENT CONTRACTS. 
 
 43 
 
 Question. It appears already from the evidence that the collector has power 
 to dispose of the general order store. Now, are the rates which you charge 
 on the general orders fixed? 
 
 Answer. The prices are fixed by the Chamber of Commerce. We do not 
 charge any more than the Chamber of Commerce prices ; but some of them do. 
 We are governed by the Chamber of Commerce prices. These are double the 
 prices the merchant pays when he puts his goods in outside stores, as business 
 is now-a-days. 
 
 Question. Are there men that have bonded storehouses that do not have 
 general orders? 
 
 Answer. Oh, yes, sir. There are but few general order houses. 
 Question. Any man who chooses can have a bonded warehouse by giving 
 security ? 
 
 Answer. Yes, sir. 
 
 Question. Then the merchants go where they can get cheapest ? 
 Answer. Yes, sir. Or where they think there are the safcst and most re- 
 sponsible men. 
 
 Question. When Mr. Barney came in as collector, was anything said to you 
 about the continuance of your store as a general order store ? 
 
 Answer. No, sir. I made application to Mr. Barney to have it continued. 
 
 Question. What conversation did you have with Mr. Barney about that? 
 
 Answer. He was so busy I did not talk much with him. He did not under- 
 stand it, and could not tell me. 
 
 Question. Did you see him more than once? 
 
 Answer. I saw him but once, though I went half a dozen times. 
 
 Question. Did you pursue your application further ? 
 
 answer. I wrote to him a letter, and he never answered me. 
 
 Question. Y^ou wrote your letter desiring to continue? 
 
 Answer. I found there had been some goods sent to other stores not general 
 order stores, the owner of which was was a democrat, and fought us all the way 
 through. I wrote him a saucy letter, and that was the only way I could get an 
 answer, and he answered. Then I wrote an apology afterwards. He as much 
 as said I should retain it. He did not say so. Y T ou could not make it one way 
 or the other; but the inference was that I should retain it; and I then wrote 
 him a mild letter in reply to that. 
 
 Question. What then happened ? 
 
 Answer. I did not hear much more about it. I kept pushing at it among my 
 friends. I went to Mr. Opdyke about it, and he said I should certainly retain 
 it ; there should be no mistake about it. The next thing I heard was, that 
 a man by the name of Lambert called upon me and said he was looking around 
 for a store, that he had the general order business for that district. 
 
 Question. Did you ask why, and how ? 
 
 Answer. I asked him why. I told him I was a republican and had done 
 more for the .party than Mr. Barney had, and as much as Mr. Opdyke had, or 
 any of the rest of them, and I thought I was entitled to it. 
 
 Question. Did you inquire how he got it ? 
 
 Answer. I understood he got it from Mr. Barney, and I tried to find out, and 
 I wrote Mr. -Barney a letter. 
 
 Question. He spoke first about commissions ? 
 
 Answer. He spoke about commissions. He had this conversation with my 
 partner. 
 
 Question. What did he say about it ? 
 
 Answer. He wanted 33^ per cent, of the whole business. 
 
 Question. What do 'you mean by the whole business? 
 
 Answer. The general order business, everything that was coming in ; we 
 
44 
 
 GOVERNMENT CONTRACTS. 
 
 were to pay all the expenses, and our expenses were to come out of the other 
 two-thirds. He was to have one-third of the grOBB amount. We did not give 
 him that, lie said there was a .Air. Hill up then; would pay him that. 
 
 Question. Is Mr. Hill in that district 1 
 
 Answer. Yes, sir. He is a democrat. We finally agreed to give him (Lam- 
 bert) 30 per cent, of the profits. 
 
 Question. How often do you pay him I 
 Answer. ( hice a month. 
 
 Question. Have you made him a monthly payment ? 
 Answer. Yes, sir, half a dozen. 
 
 Question. Have you heard whether other general order stores are paying 
 commissions ? 
 
 Answer. 1 heard that Mr. Merle was. 
 Question. Do you know of any others] 
 
 Answer. .1 think there are no others on the East river side On the North 
 river side 1 thiiAV, though I do not swear, that they are in company with them 
 and do not pay commissions. 
 
 Question. Who has it ? 
 
 Answer. 1 guess John 0. Mather is one. 1 do not remember their names : 
 they are in the ring. Humphrey is one. I suspect that that contract and the 
 general order business on the North river are in the ring. I do not know about 
 it, but I think so. 
 
 Question. Have you made any estimates of the profits? 
 
 Answer. On the North river. I estimate that in good times there is, on an 
 average, three steamships from Europe a week arriving on the North river; every 
 one of those steamships go into general order ; that is, when I say every one, 
 I mean generally ; if there are any that do not, they are an exception, and I 
 judge that they are worth a thousand dollars apiece. 
 
 Question. How do you mean they are worth that, gross or net? 
 
 Answer. I think gross after the labor is expended. That would be $156,000 
 a year, and then there is any quantity of other ships arriving the whole time 
 which would pay the expenses. I should say there was a profit of 8156,000 a 
 year of the general order business on the North river, and then other business 
 is always connected with that business. Any one of those stores that has the 
 general order business on that wdiole river would make a hundred thousand dol- 
 lars* a year. 
 
 Question. When you were asked to pay this thirty per cent., did you write to 
 Mr. Barney about it ? 
 Answer. 1 did. 
 
 Question. What did you state ? 
 
 Answer. I told him that a man had come and said he had authority from him 
 (Mr. Barney) to exact that thirty per cent. 
 
 Question. Did Mr. Lambert say he had the authority from Mr. Barney to 
 <ixact the thirty per cent. ? 
 
 Answer. YYs, sir. I wrote to Mr. Barney asking him if Mr. Lambert had 
 such authority. I did not like to pay it unless I knew the man had authority. 
 I never had any answer. 
 
 Question. How long ago did you write ? 
 
 Answer. That was along last summer some time. 
 
 Question. You never got any answer; and Mr. Lambert continued to come for 
 his monthly percentage ? 
 
 Answer.' Y'es, sir. He said that Mr. Bowen had the whole of that East river, 
 but that he had given that district to him, or something of that kind. 
 
 Question. Did Mr. Bowen have a storehouse ? 
 
 Answer. No, sir. 
 
 Question. Did Mr. Lambert have a storehouse? 
 
 Answer. No, sir. I presume Mr. Lambert could not hire a store. 
 
GOVERNMENT CONTRACTS. 45 
 
 Question. Did you ever before hear of general orders being given to persons 
 who had no storehouse ? 
 
 Answer. No, sir. It is done, I suppose, to give those persons a chance. I 
 went to see Mr. ( Jpdyke and told him the general order business was worth a 
 good deal of money to anybody that could get it. I did not ask any promise of 
 him, but he did promise me that there should not be anything done about it 
 until I was consulted. 
 
 Question. You told him how much those general orders were worth on the 
 Hudson river ? 
 
 Answer. Yes, sir; after they had got control of the general orders, and I told 
 him that it had been taken away from me in that shape, he said it was out- 
 rageous. 
 
 Question. Does this other firm, Humphrey & Co., have all the business on the 
 North river'? 
 
 Answer. All the general order business, and, I think, that that labor con- 
 tract also. 
 
 Charles Squire, jr., sworn : 
 
 Question. I will ask you, first, when Barny took his place as collector, did 
 you do anything to secure the storage of goods under general orders ? 
 Answer. 1 did not. 
 
 Question. What was the first intimation you had of any change of storage of 
 those goods ? 
 
 Answer. The first I knew, a gentleman came into the store and told me the 
 district had been given to him. 
 Question. What was his name ? 
 Answer. F. Lambert. 
 
 Question. Just tell us what conversation you had, and what was done. 
 Answer. He said he was willing to make an arrangement with me whereby I 
 could keep it, by paying him a certain percentage on the amount received. 
 Question. How much percentage did he claim first ? 
 Answer. 33^ per cent, upon the amount received. 
 Question. What was said to that ? 
 
 Answer. I told him I would think about it, and give him my answer within 
 a few days ; when he came again I told him that it did not amount to very 
 much, but, as business was dull, (we were doing very little,) rather than lose it 
 I was willing to give him thirty per cent, on the storage. I said that, of course, 
 I wished the arrangement to be sanctioned by Mr. Barny. He said that it 
 should be, but it never has been, and I do not think Mr. Barny knew anything 
 about it, or knew the man; I do not believe he ever spoke to him. I have since 
 ascertained it. 
 
 Question. He came there and represented that he was doing it with the 
 authority and approbation of Mr. Barny ? 
 Answer. He represented it so to me. 
 Question. When was it that he came ? 
 Answer. About the 1st of September. 
 Question. Have you paid him the thirty per cent, since ? 
 Answer. I have, on all goods delivered. 
 
 Question. Did you ever communicate with or see Mr. Barny in this matter? 
 Answer. I never have. 
 
 Question. Did you ever write to Mr. Barny ? 
 Answer. I did not. I believe my partner did. 
 
 Question. Never got any answer that you know of about that matter ? 
 Answer. I never got any answer ; the letter was a personal letter from Mr. 
 Johnson. I did not want to have anything to do with it, and I do not know 
 
46 
 
 GOVERNMENT CONTRACTS. 
 
 much about that. He wrote tins letter from his own place of business to Mr. 
 Barny, and I do not know anything about it. 
 
 Question. You never had any conversation or correspondence with Mr. Barny 
 about this matter? 
 
 Answer. Never. 
 
 Question. Th(* agreement you and Lambert made you put in writing 1 
 
 Answer. Yes, sir; and requested him to have Mr. Barny approve it; and he 
 put it in writing and took it to Mr. Barny to get his sanction to it, and he came 
 back without it, making some excuse for it. He afterwards said he had been 
 introduced to Mr. Barny, and that was sometime after the affair; so I think he 
 did not know Mr. Barny at all at the time. 
 
 Question. You do not know anything about Bowen & Lambert having this 
 contract for the general order storage ? 
 
 Answer. 1 was told he had the principal part of the East river; my general 
 order storage is not worth anything of any account ; and that, I suppose, is the 
 reason why I have not been disturbed. 
 
 Question. Who has the general order storage on the North river? 
 
 Answer I have understood Mr. Humphrey ; young Marshall is connected 
 with him. I do not think Bowen has anything to do with that side. That is a 
 perfect placer; there is a great deal of money in the general order storage on 
 that side for the four years. 
 
 Question. Y"ou mean to say that they can hire warehouses and store the 
 goods, and pay the expense of storage and their rents, and have a fortune be- 
 sides ? 
 
 Answer. The expense of storage is labor, and that they get back with every 
 package, and more too, because they charge labor on every package ; they hire 
 the stores and pay the rent, and that is expense that must come out of storage. 
 Then every steamer that comes in sends in nearly her whole cargo. On every 
 package they charge eighty cents. If the thing goes into the store it pays 
 eighty cents for cartage, storage, and labor ; that is, thirty cents storage, thirty 
 cents labor, and twenty cents cartage ; and they get thirty cents for the labor it 
 it comes right in and goes right out. Then they get twenty cents for the cart- 
 age, although the carmen bring three or four on a load, and it is thirty-eight 
 cents a load ; then the storage is thirty cents. In every bonded warehouse there 
 must be a custom-house officer, which the bonded warehouseman pays. 
 
 Question. Then they realize money in that way, no matter what they pay for 
 cartage ; they charge so much on every package. 
 
 Answer. Yes, sir. 
 
 Question. Do they charge more on large packages? 
 Answer. If it made a single load I presume they would. 
 Question. Were you ever required before to pay a percentage on general 
 order goods? 
 
 Answer. Not until this time. 
 
 Frank Squires, sworn : 
 
 Question. With whom did you make the arrangements to take the goods 
 under general orders ? 
 
 Answer. Mr. Edward 0. Bowen and Lambert. 
 
 Question. Did you ever call upon Mr. Barney in relation to the matter ? 
 Answer. No, sir. 
 
 Question. Did you ever request anybody to call ? 
 Answer. I think I had Mr. Merle, sen., call upon him. 
 Question. He called upon Mr. Barney ? 
 
 Answer. I think so. } 
 
GOVERNMENT CONTRACTS. 
 
 47 
 
 Question. After you rented the stores, did the}' propose to rent the stores 
 from you ? 
 
 Answer. No, sir ; they proposed to form a copartnership with us in the 
 general order business. 
 
 Question. Did you enter into a copartnership with them ? 
 Answer. xVs far as the general orders were concerned. 
 
 Question. Then you understood they had control of the general orders in 
 that district I 
 
 Answer. Yes, sir. 
 
 Question. What was their first proposition with your firm ? 
 
 Answer. Simply that they should enter into copartnership with us on con- 
 dition that we should give them a certain percentage of the business. What 
 the preliminaries were I cannot tell. 
 
 Question. What was the result ? 
 
 Answer. The result was, we entered into a nominal copartnership — that is to 
 say, so far as the general orders are concerned ; it is independent entirely of 
 our warehouse business. 
 
 Question. You pay a percentage for the general order business ? 
 
 Answer. We give them a share of the general order business, whatever it 
 happens to be. 
 
 Question. There is no real partnership 1 
 
 Answer. Nothing further than that. 
 
 Question. What percentage do you pay ? 
 
 Answer. Thirty per cent. 
 
 Question. These gentlemen invested nothing ? 
 
 Answer. No, sir. 
 
 Question. Did not run any risk ? 
 
 Answer. No, sir. 
 
 Question. Do they give you anything, as a return for this thirty per cent, 
 which they have, except bringing you the business ? 
 Answer. That is the return we get. 
 
 CONCLUSION. 
 
 Your committee has thus completed its labors, having taken much 
 evidence on various subjects, and reported at different times to this 
 House. Many frauds have been exposed, the government relieved 
 from many unconscionable contracts, and millions of dollars saved to 
 the treasury. Yet it is a matter of regret that punishment has not 
 been meted out to the basest class of transgressors. They to whom 
 this duty belonged seemed sadly to have neglected it. Worse than 
 traitors in arms are the men, pretending loyalty to the flag, who feast 
 and fatten on the misfortunes of the nation, while patriot blood is 
 crimsoning the plains of the south, and bodies of their countrymen 
 are mouldering in the dust. 
 
 " May life's unblest cup for such 
 Be drugged with treacheries to the brim." 
 
 The leniency of the government towards these men is a marvel 
 which the present cannot appreciate and history never explain. 
 
Avery Architectural and Fine Arts Library 
 Gift of Sfymour B. Durst Old York Library 
 
 6o*u3