C. Soledad to Newhall. Route No. 46120. Let 7 times a week; time, 67 hours; distance, 304 miles. Contractors, M. V. Nichols, D. J. Salisbury. Pay is let, $29,000. Case sought to be made out is against them and John L. French, who ordered expedition. Oct. 4th, 1878. Time reduced from 67 hours to 53 hours, and $27,750 allowed therefor. Expedition was granted upon an affidavit of Nichols that in the schedule there was required 130 horses and 34 men, and that a schedule of 53 hours would require 258 horses and 64 men. Wm. Buckley, an old mail-carrier, swore that he had carried the mail over the whole of the route for some years before the present contract began, and that he has been, and is now, subcontractor for 115 miles from Soledad to San Luis Obispo, about one-third of the whole route, and at least as hard as the rest. Before expedition he employed 11 men and 32 horses=43; after it, 13 men and 48 animals=61. Applying the same proportion to the whole route, there would be before expedition 33 men and 496 horses; after it, 39 men and 144 animals. Mr. Buckley said that perhaps 160 animals were necessary after expedition. OATH. Before expedition, 34 men, 130 animals=164. BUCKLEY. 33, 96=129. 39, 160=199. Mr. Buckley says that expedition did not hurry the arrival of the mail going north at their most important point, as they lay over night at Soledad. As French made the order, he can be charged with none of the odium attaching to Brady. This fact, I think, I failed to call to the attention of the grand jury. As to French, therefore, the case is not strong to show he acted in bad faith, which in his case is necessary to indictment. He had numerous petitions before him. As to the contractors, the case rests in the oath. There is evidence of sharp practice by the contractor with the subcontractor, but this does not concern the grand jury. Dismissed. [Indorsement.] JOHN T. MITCHELL, Foreman. D. Route 35040. Dak. Fargo to Pembina. 156 miles and back. 6 a week. Luke Voorhees, $17,000. SCHEDULE. Leave Fargo daily, except Sunday, at 4 a. m. Arrive Pembina third day at 6 p. m. Leave Pembina daily, except Sunday, at 4 a. m. 1878, July 30th. Order 6056. From August 1st, 1878, expedite schedule to 43 hours, from May 1st to Oct. 31st. and to 50 hours from Nov. 1st to April 30th, in each year, and in accordance with sworn statement of contractor, that it will require fifty per cent. more stock and carriers, allow $3,500 per annum additional pay. Increase service to seven trips per week, and allow contractor $4,250 per annum additional, being pro rata. Hon. THOS. J. BRADY, etc.: CONTRACTOR'S OFFICE. I will perform service on Route No. 35040 from Fargo to Pembina on a reduced schedule from sixty-two hours to forty-three hours, in summer, and fifty hours in winter, for an increase of pay of eight thousand five hundred dollars per annum, this being pro rata pay, in proportion to men and horses required to perform said service on reduced schedule, and will perform the seventh trip per week for pro rata pay. LUKE VOORHEES. Ост. 10, 1878. Reduced service to 6 a w., deduct $4,250, Aug. 1st, 1880. Dist, increased one mile for new office (addl.), $162.94, Nov. 15th, 1880. Dist. increased mile for new office (addl.), $81.47. Present cost of service, $25,744.41; six trips, $17,162.94. Expedition, $8.581.47. Total, 25,744.41. Cost of service last term, being part of E. 2034 on a four day schedule, $18,421.37 per annum. The six times a week service was originally placed on the route after consultation with the Canadian P. M. General, as it is the main line for Manitoba mails. Senator Windom and Hon. J. E. Kidder ask the increase and expedition. Affidarit. I hereby certify that it will take 50 per cent. more men and horses to perform mail service on Route No. 35040, from Fargo to Pembina, on a reduced schedule from 62 hours to 43 hours in summer and fifty hours in winter. LUKE VOORHEES. Subscribed and sworn to before me this 17th day of July, 1878. E. M. MAN, Notary Public, Laramie Co., Wyoming. [Indorsement.] Dismissed. JOHN T. MITCHELL, Foreman. That brings me to another little feature of this business. After the witnesses began to come here in these cases, Colonel Ingersoll (who was counsel for the Salisbury and Parker combinations) said they claimed they did not owe the Government anything and that it was not fair to indict them, and' he said they were perfectly willing to make some arrangement by which, if they did owe the Government anything, it should be paid promptly, and were willing to leave the question substantially in the Government's hands, only that they desired to make the condition that criminal prosecutions should not be proceeded with. I replied at once that that coudition I could not accede to. I assumed that those parties knew that the witnesses were here in those cases, though I never said so, and nothing was said to me that indicated that they did have that knowledge. However, the proposition was made from that side that we might pick our arbitrators, but they wanted criminal proceedings stopped, and they wanted that to apply to all the Salisbury routes. I said that I would not consider that proposition on such terms, because there were a great many of those Salisbury and Parker routes that I had not investigated, and I would not think of agreeing to stay criminal proceedings so far as related in any manner to the indictments. My impres sion is-I would not say it was a fact-that if I had been willing to negotiate with reference to all the Salisbury and Parker routes, probably there might have been some arrangement made; but at any rate we broke on that, and I went ahead with my indictments, or with my proceedings before the grand jury. I got these papers back from the grand jury late one night. So far as the overt acts relating to the orders were concerned, it was impossible to get another grand jury before the statute of limitations would run as to those. I hurried down to consult with Mr. Merrick, and it was agreed that we would see if we could not save something out of that wreck in some way, by resuming the dropped negotiations with Colonel Ingersoll, and we did that, keeping concealed entirely the fact that there had been a refusal to find indictments. They had never said to us that they knew we were trying to indict, or that they knew the witnesses were here, or anything of that sort; it never had been talked about between us at all. The result of that negotiation was that I finally came to an agreement with Colonel Ingersoll as to the Salisbary routes, which was reduced to writing. Before that was done the .H. Mis. 38, pt. 2—12* Attorney-General was consulted, and he said it was a matter that he knew very little about, and which he would leave for Mr. Merrick and myself to decide. By Mr. STEWART: Q. Did Mr. Merrick concur with you?—A. Yes. Mr. Merrick hadn't anything to do with it actively. I got this information about the action of the grand jury one night, as I have stated, and I saw that if I wanted to resume the negotiation I must do it as soon as possible; so I went right down to Mr. Merrick's house and told him what I proposed, and he concurred. We considered the mere general question as to what was best to be done. We consulted our authorities and discussed the matter, and concluded that it was best to give ourselves the benefit of all the doubts, and I resumed my negotiation with Colonel Ingersoll, and we made an agreement as to the Salisburys, confining it to four routes. There was another route which I had not put before the grand jury, but which I was sorry I had not-the route from Silver Bow to New Chicago. I made an agreement with Colonel Ingersoll in relation to these Salisbury routes, the substance of which was this: That the Salisburys were to stand in the gap; were to become responsible for Luke Voorhees, and for every stableman and driver that they had put up as a contractor, and to whom or to whose subcontractor the money had been paid. In very many cases the Salisburys were not the contractors, and the money they had got they had got as subcontractors, or frequently not even as subcontractors; but the men who were the contractors were their stablemen, drivers, and so on. Of course as the grand jury had refused to indict, we were looking to get back the money as far as we could, so I looked upon it as a very important thing to get the Salisburys to stand in the gap and be responsible for all money that had gone to their drivers and to these other parties. Of course it was possible that we could not get those parties into court, at least it was involved in great difficulty, because we would have had to prove their connection with the fraud and so would have had to go into details. Moreover, owing to the subcontract law passed a few years ago, there are very serious difficulties interposed in such cases. You recognize the subcontracts and put them on file and the subcontractor gets his money on his subcontract, and although you may be able to show that the expedition and increase and so on are all fraudulent, yet he may be able to say, "I didn't know anything about that; that is the contractor's business." Well, it was agreed that Col. Ingersoll should be one of the arbitrators, Mr. Elmer, the Second Assistant Postmaster-General, another, and I the third; it being avowedly understood that there were two representatives of the Government upon that arbitration, two who believed that the Salisburys owed the Government money; and it was agreed that the arbitrators should act by a majority and upon any evidence satisfactory to them. In my opinion it was about as one-sided an arrangement as was ever made. I regarded it as a very desirable arrangement for the Government, and I think so still. Q. You say that was reduced to writing?-A. Yes; I have a copy of it here, and it happens to be one which was really submitted and signed by Colonel Ingersoll, and which bears interlineations showing changes that were made in it while we were going through the negotiations. It runs in this way: It is claimed by the Government that Monroe O. J. Salisbury, Luke Voorhees, M. V. Nichols, or some other person or persons representing or connected with the Salisburys, has or have received moneys from the Government to which they were not legally entitled, on the four following postal routes, namely: Wells to Hamlinton, Fargo to Pembina, Soledad to Newhall, and Silver Bow to New Chicago. It is therefore agreed: That the claim of the Government in the said four routes, or any of them, shall be referred to Richard A. Elmer, Second Assistant PostmasterGeneral, George Bliss, or any one that may be designated by him, and Robert G. Ingersoll, or any one that may be designated by him, to determine whether the said parties, or any of them, have received from the United States any money to which they or any of them were not entitled for transporting the mails upon any of the four said routes mentioned. It is further agreed that the said referees, or a majority of them, shall have full power to decide all questions submitted, and to act on any evidence satisfactory to them, or a majority of them, and if they, or a majority of them, find that on said rontes, or any of them, money has been so illegally received, it shall be refunded on demand, or may be recouped by the Government. If the Government hereafter institutes any other proceedings against the said parties, or any of them, on account of any matters growing out of the said four routes, then this submission shall be void. This instrument does not affect the ordinary proceeding of the Post-Office Department as to fines, penalties, and stoppages during the pendency of this arbitration. That was sigued probably somewhere about the 15th of June, 1882. Colonel Ingersoll was able to say that he was authorized to represent the Salisburys, but on the question of the Parkers I think there was a little doubt about his authority, and he wanted to get some more explicit authority by telegraph. A similar arrangement, however, was made with the Parkers, identical in terms with this Salisbury arrangement. I do not think I have a copy of the arrangement with the Parkers. It related to the Venita and Los Vegas route. It was signed two or three days later than the other. Then, in point of fact, the condition of things was this: On the morning the grand jury were to come in, and when it would appear that they had refused to find a bill on the Venita and Los Vegas route, Colonel Ingersoll sent to me to say that he was prepared to sign the stipulation for the Parkers. I returned word that I would do it at any time before the grand jury came in, but I would not say that I would do it afterwards; and the paper was actu ally signed while we were sitting in court waiting for the grand jury to come in; and pretty soon they came in and it appeared that they had found no bill. Q. What was done thereafter with regard to that compromise ?—A. You can hardly call that a compromise. Q. Agreement then?-A. An arbitration I should call it. We plunged at once almost into the first trial of the Dorsey case. This was about the middle of June, and I think we commenced that trial about the middle of June. Mr. WOODWARD. The Dorsey trial was going on then. The WITNESS. Mr. Woodward says the trial was going on then, and I believe it was. At all events it was agreed that we were none of us in any condition to proceed with the arbitration then, and it was arranged that it should be taken up when we got through the other trial. When we did get through we were all very thoroughly worn out, and at the time I was summing up the case my wife was supposed to be at the point of death, not expected to live from day to day, so of course as soon as I got through I went to her. We were all tired out. After a time I desired to proceed with the arbitration, and as it was very clear that I had authority to designate somebody in my place, it seemed to me that, for various reasons relating to expense, and also for other reasons, it was wise to select a Government officer, so I designated Mr. Lyman, now Second Assistant Postmaster-General. Therefore, if the arbitration had gone on it would have been conducted by Colonel Ingersoll, representing one side, the Second Assistant Postmas ter-General, Mr. Elmer, the other, and his chief clerk, Mr. Lyman, as the third arbitrator. I transmitted this designation to Mr. Elmer, first writing a letter about desiring to proceed with the case, and then transmitting the original paper with my substitution. Mr. Elmer, however, was reluctant to proceed. He felt this way, and perhaps I did not blame him. He felt that public opinion was in a very excited condition, and that if he should go on with this arbitration, and should finally find that these parties owed the Government even $10,000 less than some gentlemen of the press or somebody else chose to say was due to the Govern ment, there would be at once an allegation that there had been some "divide," or some corruption, or something of that kind, and for that reason he was unwilling to proceed; but he said that if it was found to be his duty to proceed he would do it, at the same time expressing in writing his very decided opinion that these gentlemen owed the Government a great deal of money. Mr. Howe became Postmaster-General, and then there was raised a question as to whether the arbitration was authorized, whether it bound the Government, or whether they could enforce it against the other parties, and it was decided, I understand-I never saw the correspondence until yesterday-it was decided, I understand, or at least all the correspondence that I have seen points to the conclusion, that there was very considerable doubt as to whether there was a right to proceed with the arbitration; but that if there were, in form, suits commenced, then they could be referred to arbitration, and to the same arbitrators, and it could be done by agreement provided the parties said to owe the money were acting in good faith and were willing to do it. I do not know whether they were willing to do that or not, but I do know this, for it appears from the papers, that they of fered at one time to give bond to comply with the terms of the arbitration. My personal judgment was, and I put it in writing very strongly, that the proper course for the Government was to proceed with the arbitration until it got to a point where the defendants (I speak of them as defendants for convenience) should indicate that they were not going to be bound. They never did indicate that, so far as I know. I believed then and I believe to-day that that agreement was entered into in good faith by those parties, that they did intend to be bound by it, and that they certainly would have been bound by it if it had been proceeded with. But as to the question whether the Government was legally bound by our acts, I recognized that there was considerable doubt as to the right of attorneys to submit the claims of the Government to be decided in that way, and there was some doubt, perhaps, as to whether the decision of such an arbitration could be enforced against the Government. There was a decision of the Court of Claims which looked as if it could be, and another decision which looked as if it could not be. My idea was, that the Government should have gone on until it ascertained that those parties were not acting in good faith and did not intend to be bound by the arbitration; and, as I have already said, I never saw any reason to doubt they were acting in good faith and did intend to be bound. However, the arbitration never was proceeded with, but it was not my fault. Here the examination was suspended and the committee adjourned. |