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TESTIMONY RELATING TO THE STAR-ROUTE CASES.

WASHINGTON, March 5, 1884. THOMAS L. JAMES sworn and examined.

By the CHAIRMAN: Question. Please state your residence.—Answer. I reside in the city of New York.

Q. At what time were you in the public service of the United States as a member of the Cabinet?-A. From the 7th of March, 1881, to the 4th of January, 1882.

Q. In what capacity?-A. As Postmaster-General.

Q. Please state to the committee all matters that came within your own knowledge during that time in reference to frauds upon the Treasury, growing out of the star route mail service, and the efforts of the Government to prosecute persons who were supposed to be guilty of those frauds.-A. With your permission, I will read a statement that I have prepared.

(Reading.] În common with most citizens who took a lively interest in public affairs, I had read the comments of the daily papers on the alleged "star route" irregularties; had watched the developments of the Congressional investigations of 1878, 1879, and 1880, and had discussed the subject with various postal officials, but my attention was first specifically called to the matter by ex-United States Senator George E. Spencer, of Alabama, and other well-informed gentlemen. It was their belief that millions of dollars had been wasted on unnecessary “star" service-service much of which had never been performed and which was procured by improper means. It was also maintained that an honest, thorough inves. tigation would render practicable retrenchments without detriment to the service, which would not only make the Post-Office Department selfsustaining, but would yield a respectable revenue to the Treasury.

That I entertained such views was more or less well known. The publicity given to them, added to the fact that, while postmaster of New York, when asked by Stephen W. Dorsey to certify, in my official capacity, to a large number of papers connected with the contract office of the Post-Office Department, I refused to do so, may account for the bit. ter opposition to my appointment to a Cabinet position which developed in certain quarters.

I went to Washington on the night of the 2d of March, in answer to a telegraphic dispatch from Mr. Whitelaw Reid, which I understood to represent General Garfield's desire. On the 3d I called on him at the Riggs House, in company with Mr. Reid, between 9 and 10 a. m. After shaking hands, and talking for a moment, Mr. Reid said in substance, addressing General Garfield, that he had asked me to come on as he

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(General Garfield) had desired ; and had told me it was in reference to some suggestion of my name for Postmaster-General; that I had said that if the Treasury Department was likely to come to New York I did not want to be in the way, and that he (Reid) had assured me that was now settled. General Garfield, addressing me, said: “ That is absolutely settled; the Treasury Department cannot go to New York.” Mr. Reid, continuing, said he had told me that General Garfield expected to get on satisfactorily and without friction with both the factions in New York, and hoped my appointment, if made, would help to that end, but wished to know whether, in case controversies should be forced upon him, he could be sure, if I were made Postmaster-General, that my political affi. liations in New York would not interfere with my hearty support of his administration. General Garfield said, “ Yes; that is about it:' and I then replied, “ Such a contingency, in my judgment, will not arise, but if it should, if I accept your nomination, I must, as a gentleman, either be loyal to the President or resign." General Garfield said, “That is satisfactors," and the conversation then turned to the work of the PostOffice Department. I said that if I went into it I should like to carry out a plan I had already formed of going abroad to finish up a study of the London methods for city free-delivery service, and the General replied that he would arrange that. He then said that from what he kept hearing he was afraid there was something very wrong in the Department itself; that if so, he expected me to find it out, and then put the plow in to the beam, and after that to subsoil it. He asked what I knew of the frauds. I replied that my knowledge was derived from the newspapers, from the investigations which had taken place, and from hearsay. The only persons present at the conversation were the Presi. dent, Mr. Reid, and myself. I left for New York in the afternoon train with my friend, Charles E. Smith, of Philadelpbia. Mr. Dorsey was not present at this interview, nor did I see him; neither did I call on nor meet Senator Conkling or Vice-President Arthur.

On the 9th of March, after my appointment as Postmaster-General, the President sent for me and brought up the subject of the - starroute" service. He said he was satisfied that there had been willful waste of the public money and gross corruption; that while he did not wish to have mail facilities necessary to the welfare of any community curtailed, all unnecessary and extravagant service must be relentlessly cut off ; that the service should be regulated and conducted with strict regard to actual public requirements, and not with a view to serving private interests; that the proposed investigation must be aimed at a sys. tem, and not at men; but that if the inquiry should disclose the fact that any person or persons had been guilty of corruption or fraud, that person or those persons must be handed over to the Department of Justice. He instructed me to pursue this investigation until there were no more facts to ascertain, and asked, “How do you propose to proceed !" I replied that, with his approval, I should telegraph P. H. Woodward, of Connecticut, formerly chief special agent of the Post-Office Department. and a man of character and integrity-who, while in the Department, had rendered great service to the Government in breaking up the practice of “ straw bidding” in connection with star route contracts-to come to Washington, and that I would place the investigation in his hands. The President said that this met with his entire approval.

On my way back to the Department, I met Senator Hawley and Gov. ernor Jewell, of Connecticut. At my request both these gentlemen tel. egraphed to Mr. Woodward to accept the position of inspector. In reply to my telegram, Mr. Woodward met me in New York on the 12th

of March, when I asked him to become my confidential agent in the investigation of the star-route frauds. He accepted, accompanied me to Washington, and was commissioned as an inspector on the 14th of March. I notified the President of Mr. Woodward's arrival. He said that he was much annoyed in regard to certain large post-offices in North Carolina, South Carolina, and Georgia; that he did not wish to make mistakes in appointments in this connection; that only men fit to be postmasters and those having the confidence of the people should be appointed, and that as Mr. Woodward had formerly lived in the South he thought it would be well to place all the applications for appointment in his hands and let him visit the cities in which these offices were located, inquire into the fitness and character of the applicants, and recommend the person best equipped for the place. These suggestions were carried out, and in consequence very little progress was made in the star-ronte investigations until the 1st of April. During Mr. Woodward's absence I visited New York, and was then informed by Mr. David F. Nelson, a clerk in the New York post-office, that Mr. John Swinton, one of the editors of the New York Sun, would, if so desired, place me in communication with a gentleman who would materially aid me in the impending investigation. I sent word to Mr. Swinton that he would confer a favor upon me by so doing. This resulted in Mr. A. M. Gibson, formerly connected with the New York Sun as its Washington correspondent, calling on me at the Department, making valuable suggestions, and placing in my hands evidence of great importance bearing upon star-route matters and methods.

With the imperfect instrumentalities at hand, and in the face of the most serious obstacles, a plan of operations was adopted, and the preliminary investigation was undertaken in earnest. All sources of information at command were made available. Steps were taken to authenticate specific cases of abuse, long-suppressed reports of inspectors on doubtful service were exhumed and consulted, and where the originals were not discoverable in the contract division of the Second Assistant Postmaster-General's office, copies were procured from those who made them, and inspection of the doubtful service by experienced and trustworthy agents of the Department was immediately ordered by telegraph. The state of affairs thus revealed was truly appalling. Affidavits of contractors, upon which increase of service and expedition were unhesitatingly ordered, were freely accepted when even the most superficial inquiry on the part of an inspector, procured at a small cost, would have saved untold thousands to the Department. Inspectors designed by law to jealously guard the interests of every branch of the service, and advise the Postmaster-General of any abuses or irregularities which might at any time or in any place fall under their notice, were peremptorily forbidden to trench upon the “star-route” domain by a power which appeared to be greater than that of the head of the Department, and whose unspoken word was obeyed as law.

This vast and important service, stretching for thousands of miles "east, west, north, and south," in regions of country infested by bands of hostile Indians or desperate outlaws, and often accessible only by * buck-board” or on horseback, was relegated to the care of one man, borne upon the rolls of the Department as an assistant superintendent of railway mail service, and who occupied a desk in the office of the Second Assistant Postmaster-General. Manifestly there was method in all this, the motive of which was not far to seek. Swift and sure came the conviction that the personnel of the Department, and of some branches of the service, was intensely hostile to the new order of things, and must be purged. No sooner had this work begun than bitter and malignant attacks appeared in the columns of “star-route" organs on the President, the Attorney-General, the Postmaster-General, and who. ever else was suspected of a disposition to promote clean, honest, and business-like methods. Swarms of contractors, their attorneys, and beneficiaries raised a deafening clamor, and made common cause against the Administration.

In the early part of April, fortified with facts and figures laboriously and carefully collated, Mr. Woodward and myself called on the Presi. dent and exhibited a comparative statement of the most corruptly manipulated routes. He displayed great surprise, and wished to know if the figures had been verified by the records. He also added that he had been providentially saved from falling into a trap which had evi. dently been set for him, and seemed to be contemplating some peril which he had escaped. He asked whether the papers had been shown to the Attorney-General. I replied no, when he requested me to call with that official and Mr. Woodward the next day.

In conformity with his request we called the next afternoon and a lengthy consultation ensued. In answer to my suggestion as to whether it would not be wiser to institute civil suits for the recovery of the money obtained through dishonest contracts rather than to commence criminal proceedings against the implicated parties, he said "No." "One moment, Mr. President,” said the Attorney-General; "consider whether or no the Postmaster General is not right. Before a final decision remember that these proceedings may strike men in high places; that they may result in changing a Republican majority in the United States Senate into a Democratic majority; that it may affect persons who claim that you are under personal obligations to them for services ren. dered during the last campaign-and one person in particular who as. serts that without his management you could not have been elected. Look these facts squarely in the face before taking a final stand, for neither the Postmaster-General nor myself will know friend or foe in this matter." The President walked across the room, reflected a moment, and said, “No; I have sworn to execute the laws. Go ahead regardless of where or whom you hit. I direct you both not only to probe this ulcer to the bottom, but to cut it out." This closed the conversation. Shortly after the conference above referred to, ex-Senator Dorsey called on me at the Arlington Hotel, and, in the presence of Mr. Woodward, denounced Mr. Brady, the Second Assistant Postmaster-General, with great bitterness, and urged that he be immediately removed.

On the 19th of April, Inspector Woodward addressed me a communi. cation strongly urging that the interests of the pending investigation and of the Department demanded the retirement of Thomas J. Brady from the office of Second Assistant Postmaster-General. The same evening Woodward and myself called upon the President, to whom I referred the letter. He at once directed Brady's dismissal. I explained to the President that Brady had previously told me that whenever his place was wanted his resignation was at the President's disposal ; that my relations with the Second Assistant Postmaster-General, official and otherwise, had always been of a friendly character; that this was a most painful duty, and that I hoped he would allow me to ask for his resignation. He declined, and directed a letter prepared, which I signed, asking the President for Mr. Brady's instant removal. Early the next morning the President sent for me and said he had reflected on what I had urged, and, realizing my embarrassment, was willing I

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