eral) who told me that an agreement had been made to compromise those cases.

Q. Did you learn the nature of that agreement?-A. Yes; I learned the nature of the agreement at that time. He told me, I think, that the larger contractors or combinations that had not been indicted had proposed to the Government that they were willing to arbitrate, and agreed that if the Government could prove that they had got any money from it that they ought not to have had they were willing to pay it back, and that there had been an arbitration agreed upon; that the Government was to select one man, and the contractors one man, and the two a third.

Q. Do you know who were selected for that purpose?—A. I think Mr. Elmer told me about it first, and told me that he was selected on the part of the Government, and Mr. Ingersoll on the part of the contractors, and the third I believe they had not at that time agreed upon. I told Mr. Elmer that if I were in his place I would have nothing to do with it.

Q. Do you know who the third party was that was finally selected ?— A. I did know who the third party was, but I cannot tell you now.

Q. Was it Mr. Bliss, so far as you know?-A. I have got an impression that it was Mr. Bliss.

Q. Do you know whether that arbitration board ever met and performed any duty as such-A. I understand that it did not. I had several talks with Mr. Elmer about it. I talked more with him than with any one else; I am under the impression that it never met and never did any duty. I think they found that it would be entirely illegal and that they could not do it. But you want to recollect this, that from the 1st of July until the 2d of November I was not in Washington, and consequently there was a long time when I did not know anything that occurred here excepting as I read it in the newspapers. Q. Do you know who had authorized the creation of the board of arbitration-A. No; I do not.

Q. Do you know whether it was agreed upon on the part of those representing the Government as well as those representing the contractors?-A. I suppose it was agreed to by both. The truth is that after the shooting of President Garfield I went away, and when I came back Mr. Bliss and Mr. Brewster had charge of the cases and I never knew anything of them afterwards. Those gentlemen never asked me any questions and they did not act as though they wanted to consult with me in any particular about the matter, and they never did, and consequently all I knew about it was what Mr. Woodward would tell me sometimes, or Mr. Elmer, or Mr. Lyman, and I did not trouble myself to make any inquiries; so that my actual knowledge of the matter extends only from the time when Mr. James became Postmaster-General up to the shooting of Mr. Garfield. I have no particular knowledge about it after that time. What occurred up to that time I knew very well.

Q. Have you conversed with any of the contractors or subcontractors with regard to the result of that compromise-as to whether they paid any money in pursuance of it, or of any compromise with the Government?-A. No; I have never conversed with any of the contractors on the subject, with the exception of Mr. Parker. I met him on the train some time in 1882, and he told me they were going to have such a compromise. That was after I had heard of it in Washington. It was the only time in my life that I ever saw Mr. Parker.

Q. Do you know whether any sum or sums of money were raised from

the contractors or subcontractors on account of any compromise wanted to be made with the Government?-A. No; I do not.

Q. Has any contractor informed you that he has paid any money on any account growing out of these prosecutions?-A. No; I have never talked with any of the contractors except Mr. Parker, as I have already said.

Q. Or any of the subcontractors?-A. No; but I think there are some subcontractors that might give you some information on that point if you could get hold of them.

Q. Will you furnish the committee the names before you leave the room-A. I will give you a name privately.

Q. Did any of those subcontractors say anything to you about having been required to pay any sums of money?-A. Well, I have not talked for two years with any of the contractors or subcontractors; for three years, in fact. I have not talked with any of them since the star-route investigations commenced except, as I have told you, once on the cars with Mr. Parker.

Q. When you did talk with any of the subcontractors did they give you any information in regard to any payment they had been required to make on account of these prosecutions or growing out of them?—A. Three or four years ago the contractors and subcontractors used to talk about these things very publicly, but after the investigation commenced they quit talking, and would not talk any more, and since my connection with the matter has been known they have always been enemies of mine, and consequently have not talked with me.

Q. What did any of those contractors say with regard to the sums that they had been required to pay in connection with the prosecutions, or to get immunity?-A. It was the general understanding-I cannot give it to you in the shape of evidence now, nor I cannot tell you who told me-but it was the general understanding when this star-route investigation was going on in 1881 that they had to pay 333 per cent. for expedition and increase of service. However, no one ever told me that in any shape that I could swear that he told it to me or that it was a fact, but it never had any doubt in my own mind but that it was a fact. Still, I do not know it in the shape of evidence. I think Mr. Rerdell corrob orated that, however, in his first statement.

Q. That was a sort of an open secret among the contractors, was it?— A. It was a sort of an open secret. It was in the air. There are a great many things, you know, in the air that you cannot grasp. It was generally talked of that any one who wanted expedition and increase of service had to pay that. The plan was this: These contracts were originally let at very low rates, with a long schedule of time. They were principally once-a-week service, with not more than two or three miles, or perhaps two miles and a half, an hour. Then the service was increased from once-a-week to three-times-a-week, or to seven-times-a-week, and then the schedule time was increased to four, five, or six miles an hour, and one route that was let originally for $2,700 was afterwards expedited and increased up to, if my recollection serves me right, as high as $52,000.

Q. These subsequent increases were made without advertisement, were they not?-A. Yes, sir; I think they were made without any advertisement, and it was in the air that the contractors had to pay 33 per cent.; but whether they did or not I do not know. I never had anybody tell me of that so that I could swear to it.

Q. Do you know how that 33 per cent. was to be applied?—A. Certainly not. I was not in their secrets.

Q. But you say it was understood so far as general information went that persons obtaining expedition were required to put up 33 per centum of the increase in order to obtain the expedition?—A. That was the general understanding when we were trying to break up this star-route ring, that that was what they were doing. I had heard it often before, and Rerdell when he made his statement confirmed that part of the general understanding.

Q. That 333 per cent. was to go to some person of course?—A. It was supposed to go to the Second Assistant Postmaster-General.

Q. Do you know whether the subcontractors of the beneficiaries, the principal contractors, were assessed on the amounts of their contracts with a view to the payment of that 33 per cent.?—A. I think they got that differently from an assessment; they would let the subcontract for so much, and then when they would get it increased they would make another bargain with the subcontractor.

Q. The subcontractor would not be required to pay anything, then, on account of the expedition?-A. Well, I say the contractor would make another bargain with the subcontractor. Mr. Jennings used to tell very fully how it was. He stated that the original contract price he got on his route was $3,000, and after it was increased to $52,000 he received $28,000, and the rest was profit.

Q. Profit to the person who had obtained the contract-the principal contractor?-A. Yes: profit to the principal contractor.

Q. The principal contractor obtained the contract at a specific sum, and then got the service expedited and made a contract with the subcontractor to perform the expedited service for a stated sum, and the balance of the contract price was retained by the original contractor, who performed no service whatever?-A. Yes, sir; who performed no service whatever.

Q. Can you state what interest a gentleman named Hinds had in those contracts?-A. Mr. Hinds had no interest; Mr. Hinds was interested with Mr. Walsh in a route from Santa Fé to Prescott, and was a failing contractor, and they took his route away from him, I think.

Q. In the New York Tribune of February 12, 1876, I see a letter which is dated at Nashville, October 9, 1867, addressed to Mr. Hinds, and signed by you. Do you remember anything about that letter?—A. I might remember it by reading it. [After looking at the letter as published.] That is a letter which I wrote at that time to Mr. Hinds. He was a man who had been a captain in my regiment during the war, a man that I had a great liking for and have a great liking for to-day. He was a man who at that time had had very little experience in business, and he had come to Washington and got a large number of mail contracts in Alabama. He had employed Judge Embry, and the judge was complaining about Mr. Hinds not being able to pay him, and told me something about his having to pay something to Judge Hood, who was supposed to be a friend to Postmaster-General Randall, and on that subject I wrote that letter to Mr. Hinds. I had forgotten all about it; I did not know it ever had been published. I wrote the letter to Mr. Hinds telling him to keep his engagements. Mr. Hinds was for a number of years a mail contractor, and lost a good deal of money at it, and was finally prosecuted here once for straw bonds.

Q. Who is Judge Embry that you mention here?-A. He is a gentleman who is still here in Washington, an attorney and a very respectable man, Mr. James H. Embry. He has an office somewhere in town here.

Q. Then this letter of yours was simply advising Mr. Hinds to keep his contracts with his attorney, Judge Embry ?-A. Yes, sir.

Q. Hinds was a failing contractor?-A. At that time I do not think he was a failing contractor, but it is so long ago that the matter has entirely passed out of my mind. It was long before I was in public life, yon see, away back in 1867. I know I met Judge Embry and he made these complaints and I wrote to Mr. Hinds to keep his engagements with Judge Embry, whatever they were. Judge Embry told me he had done a good deal of work for Mr. Hinds here and that Mr. Hinds had not paid him as he had agreed to, and that he, Embry, had had to pay Judge Hood Judge Hood was then a lawyer, practicing here principally in the Post Office Department, but he has been dead several years. At that time I did not know him.

Q. You had no interest in it?—A. I had not the slightest interest in it, except writing to a young man who had just started out in life, telling him it was better for him to keep his engagements than to break them, no matter what they were; even if they were foolish engagements, to stick to them.

Q. Was there any suggestion in regard to a change in the postmastergeneralship mentioned in your letter?-A. Well, I certainly had not much to do with the Postmaster-General at that time. It is so long since I wrote the letter that I had forgotten that I had ever written such a letter; but I know I wrote to Mr. Hinds on account of what Judge Embry had said, because I was out of politics, and did not know any more, at that time, about what was going on in Washington than I know of what is going on now in Saint Petersburg. I want to say that for a number of years Mr. Hinds had been a contractor here, and I thought he had been very badly treated by the Post-Office Department; very badly indeed. I got a good deal of information myself concerning starroute cases from Mr. Hinds; perhaps more from him than from any other one individual; and I thought he had been very badly treated; and I took an interest in breaking up the star-route ring which Hinds had been fighting, as much to vindicate him as for any other one reason. I regard Mr. Hinds as an honest, square, true man; a little wild and visionary about some things, perhaps, but I thought he had been very badly treated, and I was very anxious to see some of those men who had been persecuting him come to grief, as I thought they ought to. Mr. Hinds is now living at Decatur, Ala., and you can get him as a witness at any time by sending for him. He was here a week ago but has gone home now. He is a son-in-law of Dr. Bliss.

WASHINGTON, D. C., March 8, 1884.

A. M. GIBSON Sworn and examined.

By the CHAIRMAN:

Question. Please state your occupation and residence.-Answer. I am a member of the bar. I reside in Washington during the winter. Q. State whether you were employed as special counsel by the Government in the star-route cases.-A. I was, on the 22d of April, 1881. Q. Did you hear the testimony here of Mr. James and Mr. McVeagh in regard to your appointment?-A. I heard that of Mr. James; I did not hear Mr. McVeagh's.

Q. State the circumstances which led to your employment as special H. Mis. 38, pt. 2--5*

counsel in those cases.-A. Well, Mr. Chairman, what I suppose you want to know is how much I was paid and whether I earned it. On page 25 of Executive Document No. 40 you will find that I received $5,000 for my services. Now, I will endeavor to show the committee, first, that I earned that money, and, second, that in comparison with others I was poorly paid. In 1872 I began to make a special study of the Post Office Department, and during the years that intervened between that and 1881 I became quite familiar with the methods of business in the Department and with the parties engaged specially in mail contracts. I made it my business at each of the lettings to get the lettings on the principal routes in the Western Territories and States, and from time to time I caused my clerks to make transcripts of the allow ances that were made for increased service and expedition on those routes. During the winter of 1880-'81 I was not in Washington except over Sundays and probably Mondays. In the early spring of 1881, I think about the 1st of March, I came to Washington and was here at the inauguration, and, I believe, shortly after that went back to New York. I knew nothing about Mr. James's intentions. I had met Mr. James but once, and that was at the Chicago convention. I did not see him when he came here nor for some time afterwards. I was standing in the Western Union telegraph office here one day, I think in the latter part of March, when Mr. Spencer came in and said he had been looking for me and wanted to see me. He said that there was going to be an investigation of the Post-Office Department with reference to the star routes, and he wanted to know if I would not give them some assistance. I told him I hadn't any desire to engage in it; that I had other business. He insisted, and finally I went with him to Wormley's Hotel to see Mr. Woodward. I found Mr. Woodward in a room and had some talk with him. I think at that time he had taken a statement of a man named Jennings, which, he said, was about the only thing that he had done. That resulted in my taking to Mr. Woodward quite a mass of stuff, being tabulated statements of a number of routes, from which a table of 93 routes had been made up, giving, in each case, the date of the contract, the original pay, and the subsequent increases for expedition and increased trips.

Q. Can you identify that table [showing witness a printed table of routes]-A. That is not the table; that is a table that was subsequently made, which goes somewhat more into detail than the original table. My recollection of the amounts aggregated in that table is that they are somewhat different from this [referring to the one in the book]. Of course, you understand that these tables differ at different periods; there would be changes. For instance, there would be reductions made on a route, or there might be, possibly, some additions; this is made up as of a certain date; that one was made up as of the date January 1, 1880. I think that original table showed an increased expenditure for increased trips and expedited services of about $2,000,000 over and above the contract price. That table caused some commotion, because it made a very remarkable showing, and that was the table that was taken to Mr. James, and to Mr. MacVeagh, and to the President. Of course, I do not know what the President said about it, but I heard what Mr. James testified to. It is a little remarkable that it should have excited so much surprise on the President's part, because I have a distinct recollection of showing him the same table in 1880.

By Mr. STEWART:

Q. Was that before the election ?-A. That was before the election; in January or February, probably, 1880. Then I was asked to take