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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 investi. gation was going on in 1881 that they had to pay 33} 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 anyone 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 ad. vertisement, and it was in the air that the contractors had to pay 333 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 334 per cent. was to be applied l-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 334 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 334 per cent. 1-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 pub. lished. 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 bad 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 bis 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, you 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 Jadge 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 1-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 1-A. Well, I certainly had not mach 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 Washingtou 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 thau 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 expe. dition 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 part in an investigation, and I, on account of some things which bad occurred in the past, did not propose that I should be employed without the approval of the President. I made the condition that he should be advised of it and his approval obtained. While in New York I received a telegraphic dispatch to come here; I came here and met Mr. James and Mr. Woodward at Attorney-General MacVeagh's house on Rhode Island avenue, and had some talk with them there. I believe that is the first time I had met Mr. James; I am quite certain that I never called on him at the Department, nor ever made any exhibit to him of any papers or statements. The conference at Mr. MacVeagh's house lasted for some time; and subsequent to that, probably in a day or two, I called upon Mr. MacVeagh at his request at the Department, and came up with him to the Capitol, and remained here while he disposed of a case in the Supreme Court.
Mr. VAN ALSTYNE. Is all this detail material ?
The CHAIRMAN. The question is as to the value of Mr. Gibson's serv. ices, and he started out by saying that he had been paid $5,000, and he is proceeding to show that it was only reasonable compensation for his services.
Mr. STEWART. Has anybody questioned the value of Mr. Gibson's services ?
The WITNESS. It has been questioned. Mr. STEWART. It was approved by the Attorney-General, and if the chairman of the committee does not question the propriety of the charge, it seems to ine better not to waste any time in justifying it. The CHAIRMAN. It was a subject of comment at the time, I remember.
By Mr. VAN ALSTYNE: Q. How many interviews did you have with these gentlemen before you were finally employed or instructed to proceed 1-A. I think two, sir.
Q. When did you receive those instructions I-A. Some time about the 22d of April.
Q. And from that time you commenced investigations in addition to those that you had been making previously on your own account into the conduct of the Post-Office Department 1-A. I brought with me the result of investigations which I had made, particularly of the services for the contract term beginning July 1, 1878.
Q. And that was in substance what you had on a former occasion exhibited to Mr. Garfield while he was a member of the House -A. I had exhibited to him the table of ninety-three routes, which was a summary of a good part of it, which gave a concise view of it.
Q. Did your summary of the 93 routes disclose the relation which Dorsey occupied to the increased pay 1-A. Only as some of Mr. Dorsey's routes were included. I will state, for the information of the committee, that you cannot tell who is the real party in interest as it apDears upon the books. Gentlemen who are engaged in carrying the mails do not always bid in their own name, and the contracts are not always in their own names. Therefore it requires some person who has some knowledge of people engaged in the business to know who are the real parties. A man may have half a dozen people who bid and the contracts are made of course in the name of the accepted bidder. I went to the Post-Office Department when Mr. MacVeagh told me that my serv. ices were needed, and I began and organized the investigation. Hav