it, and that may have been very likely, as he was engaged in other matters at the time. By the CHAIRMAN: Q. Was the first official report made to any Department of the Government in regard to these frauds?-A. Yes, sir; on the general subject. By Mr. MILLIKEN: Q. You said you were asked to change your report; do you mean the substance, or simply the address of it?-A. Simply the address of it. The report was addressed to the Attorney-General originally. Mr. MacVeagh leaving at that time (although his resignation had not been accepted, and the claim was made then, and for some time afterwards, that he was really the Attorney-General), and determining to close his relations with the Department, formally took leave of it, and directed the Solicitor-General to act under the statute. He stated to me the complications he was in at the time and requested me to address this report to the Postmaster-General by direction of the Attorney-General. By the CHAIRMAN: Q. In the preparation of this report, did you have the benefit of the reports made by special agents of the Post-Office Department to the Postmaster-General?-A. Yes, sir. Q. Have you examined the reports that were transmitted recently to the House of Representatives, and are published in Ex. Doc. No. 100A. Yes, sir. Q. Were these reports examined by you previous to making your report?-A. Such of them as were received previous to the date of that report. Q. Your report was dated when?-A. The date of my report is the 31st of October, but the exhibits were not completed at that time. Q. It was transmitted to Congress at the session beginning the 1st of December afterwards?-A. Yes, sir. Q. Were the inspectors, whose reports appear in Ex. Doc. No. 100, those whose appointment you had suggested, and to whom you had given instructions?-A. Yes, sir; these gentlemen acted under my instructions. In some of the reports you will find that they refer to the instructions. They were quite minute. I directed them what to do and how to do it. Q. State the names of those inspectors who were acting under your direction.-A. They were not acting under my direction. Q. I mean under the instructions which you had prepared.—A. All the names are here in the document: Messrs. Stuart, Sigbold, Furay, Sharp, and Mr. Henry R. Gibson. Previous to that I had the Attorney-General detail A. B. Newcombe, an agent of the Department of Justice, and the Postmaster-General gave Mr. J. J. Hinds a commission as inspector, and they went to New Mexico and Arizona and gathered some evidence and made some reports upon routes there. Mr. Brewster Cameron was one of the inspectors. By Mr. MILLIKEN: Q. What led you to commence investigation of the Post-Office Department in 1872?-A. That was the time of the investigation by the House of Representatives into straw bidding. There have been two systems of fraud in the Post-Office Department of recent years; first, what was called straw bidding. A number of persons would take their stablemen, drivers, and other employés, and they would bid in the names of those persons very low, while they would put in half-way up, and at the top, running up the scale, bona fide bids of their own. The proposal of the lowest bidder would be accepted. Then he would fail to make a contract and then under the law, the Department went up the scale, and if anybody came in the way they would be bought off. Q. Did you go into that investigation by direction of any Department of the Government, or the House of Representatives, or voluntarily ?A. Oh, I was a correspondent of the New York Sun here at that time, and I have written volumes on the subject. Q. You did that for your paper?-A. Yes. Q. Now, do you claim that you should have pay for your services, on account of the information which you brought to the Department which you had gathered prior to the time when the Department employed you?-A. I have no claim at all, sir. I was paid up to the 1st day of January, and I did not think it worth while to put in a bill for the remainder of the services. Q. I did not mean that you put in any specific claim. I understand that you were paid $5,000.-A. Yes, sir. Q. And you claim that that was no more than just payment for the services you rendered?-A. Yes; during the time I was employed by the Department of Justice. Q. That is what you say about it?-A. Yes, sir. By Mr. STEWART: Q. Irrespective of the information you brought-A. Yes. That was ex gratia. By Mr. MILLIKEN: Q. That you gave to the Government ?—A. I gave that to the Government. By Mr. STEWART: Q. How much of the time were you actually employed after you commenced?-A. From the 22d of April until some time in November. By the CHAIRMAN: Q. You gave your whole time?-A. Yes, sir; night and day, about fourteen hours a day, with Sundays also. By Mr. STEWART: Q. Certain cases were selected by the Department for prosecution; first, under the information, and afterwards by proceedings through the grand jury. Were those cases selected by the Department of Justice in conformity with your view and recommendation ?—A. Not all of them. Q. Were any of them?-A. There were indictments obtained in several cases which have never been tried-no disposition made of them whatever and I think some of those I recommended proceedings in. The case which I desired to have presented to the grand jury, and concerning which I wrote to the Attorney-General urging that course, was the case of the route from San Antonio to Corpus Christi in connection with route 40101, from Santa Fé, New Mex., to Prescott, Ariz.; being a simple case involving but few details, and in which the evidence was pretty direct and positive. Q. Who were the parties?-A. J. B. Price was the contractor. Q. Were indictments found in those cases?-A. They were in the latter part of 1882, and I think one of them in the spring of 1883. Q. Are they still pending?-A. Yes, sir; they are pending. Q. Were you consulted with in reference to the indictment against Mr. Dorsey and Mr. Brady?-A. I made a report upon that subject so far as the record disclosed at that time. That was one of the subjects upon which we met at Elberon to consult about. After Mr. Bliss had examined the case there he stated that it was a case about which he had grave doubts, and was not as strong a case as he had been led to expect. And I am frank to say that I agreed with him. It was a case that involved a great many routes and a great many persons, and there was this difficulty about it: There were two parties who were mortal enemies of each other, and had no connection except such connections as are necessary in conducting the business of the Post-Office Department. The contractor is recognized through the term of service. The contract is in his name and the regulations of the Department require certain communications to be made in his name. It varies; sometimes it is the subcontractor, but the rule is the contractor. The result was that a number of persons were indicted for conspiring with each other, when in fact they had not been on speaking terms and were as separate and distinct as day is from night. Q. Did you make any distinction between this Dorsey and Brady case and the other cases as to your judgment of the infraction of the law in the carrying out of those schemes?—A. I do not catch on exactly. Q. Did you have any doubt about the guilt of those parties ?—A. Oh, my report speaks for itself on that subject. By the CHAIRMAN: Q. That is the Dorsey combination?-A. Yes, sir. By Mr. STEWART: Q. In your conference there as counsel for the Government, was not the fact recognized, and did not that have a very important bearing upon the ultimate determination of the Department to prosecute Mr. Dorsey and Mr. Brady, that the charge against them had become public and notorious, and that Mr. Dorsey had demanded a trial; and did not that have some effect upon the officers or upon you in your conference?-A. It did not have upon me, because I insisted that the case 40101 should go on, and I succeeded in carrying my point in that, and the information was filed in that case; I insisted afterwards that that case should be submitted to the grand jury. In that I was overruled. Q. By whom?-A. Mr. Bliss. Q. Was any evidence submitted to the grand jury in that case?—A. No, sir. Q. I thought you said indictments had been found in that case?-A. In a collateral case. Q. Do you think the Government under the circumstances could very well have refused to proceed against Mr. Dorsey after what had transpired?-A. The Government was under no obligation to proceed. It is the business of the Government to take the best case it has got and try to secure a conviction. Q. That depends. That is your judgment about it?-A. Certainly. In a series of cases like these, where it is very difficult to get a jury to comprehend a complicated system, it was the business of the Government, and those representing the Government, to take the case that was the simplest. Q. Did the Attorney-General and the other gentlemen concur with you in that matter?-A. Mr. Brewster gave no attention to those cases. He took Mr. Bliss' judgment. Q. You mean to say that he gave no attention to them?-A. I mean to say that he stated to me that he must rely upon Mr. Bliss; that the duties of his office were so engrossing that he could not give matters of this kind an examination which would enable him to determine anything about them. Q. That was after his appointment as Attorney-General?-A. Yes, sir. Q. He was in the cases before that?-A. He was in the cases before that simply to argue as to the legality of filing an information instead of proceeding by indictment. Q. Do you say he had nothing further to do with those cases prior to his appointment as Attorney-General except as to the legality of the information?—A. To make an argument in that case. That is all he charges for. Q. You are mistaken about that. That is not his charge. He charges $2,500 for his services.-A. Five thousand. Q. No, I am speaking about the $2,500 that he was paid under the direction of the Attorney-General. Afterwards he was allowed something else, amounting to $5,000 altogether, before his appointment as Attorney-General, but as a matter of fact that was his service. Q. Was he present at the conference at Elberon before the death of the President?-A. No, sir. The CHAIRMAN. United States, debtor to Benjamin Harris Brewster to services as counsel in United States vs. Thomas J. Brady, in the supreme court of the District of Columbia, and in certain other matters known as the star-route cases, $2,500; and then the next charge is "to professional services unpaid for, and incidental expenses in the star-route cases, $2,500," making $5,000 in all. This is the way he renders his bill. You state, however, from your knowledge that his service was confined entirely to making an argument in the information matter. The WITNESS. Yes, sir. He may have been consulted with, however, about the Philadelphia cases. I would not speak definitely about that. By the CHAIRMAN: Q. When and to whom did you recommend the indictment of parties who were contractors in what was known as the Corpus Christi route, and also in the Santa Fé and Prescott route, to which you have referred?-A. Some time in the early part of 1882. It was before I resigned. I called upon the Attorney-General, Mr. Brewster, and stated to him this fact. The grand jury was in session. It was a most admirable grand jury. The foreman of it was a man of character and large intelligence. Q. What was his name?-A. Jesse Wilson. I stated to Mr. Brewster that I had had several interviews with the foreman of the grand jury and he had stated to me that they had plenty of time to hear witnesses in other cases; that if necessary they would meet at 9.30 o'clock in the morning and sit until 4 in the afternoon, and would sit continuously; and in reference to the case of route 40101 from Santa Fé to Prescott, and these other cases (from San Antonio to Corpus Christi was the other one that I meant). I stated to the Attorney-General that the grand jury could hear witnesses in those cases and that they could go along side by side. In the case of route 40101 (from Santa Fé to Prescott) the statute of limitations was about to run. We proceeded by in formation originally because the statute of limitations was about to run in regard to one of the parties. Subsequently, we discovered the payment of money and that extended the statute until some time in the spring of 1882, and I was very anxious that that case should be heard by the grand jury before the statute ran. I had this personal interview with the Attorney-General and he asked me to put it in writing, which I did. Q. Have you a copy of that writing?-A. I have, but not here. Q. State what was done then.-A. The case 40101 was not submitted to the grand jury. The case of the route from San Antonio to Corpus Christi was, some time in 1882, placed before the grand jury, and an indictment found, so far as A. B. Price was, concerned and Thomas J. Brady; very much to my surprise, an indictment against no other person was found, although the evidence was positive and direct. Q. Who were the other persons that were included in the recommendation for indictment or implicated by the evidence?-A. I don't know that there was any recommendation. Q. Who were implicated by the evidence in reference to that route ?A. William Pitt Kellogg. By Mr. VAN ALSTYNE: Q. At that time he was still in the Senate -A. He was. By the CHAIRMAN: Q. Did you call the attention of Mr. George Bliss to that case ?—A. Yes, sir.. Q. State what your interview with him was in reference to bringing that case to the attention of the grand jury.-A. Well, some time while I was still at the Post-Office Department building, Mr. Bliss in looking over one of the papers connected with this case of 40101—I had prepared them all together, because in trying one case you necessarily would have had to try the others partially; I had left purposely the statement as to some matters relating to the route from San Antonio to Corpus Christi (route No. 31148) blind-Mr. Bliss in reading it over of course noticed that, as any person would who was familiar with all the circumstances. He asked me who that referred to. I wrote on a slip of paper and handed it to him, "William Pitt Kellogg." That was the first information that he had with regard to it. Q. When was this?-A. This was some time in October, 1881. Q. State, before you proceed, what was the original letting of that route, and how it was expedited?-A. The number was 31148, from San Antonio to Corpus Christi, 148 miles; the original time was 48 hours, two trips a week, $2,733. It was subcontracted to J. J. Ellis for $8,199. On August 26 four trips a week were added and the pay increased $5,466. July 15 the running time was reduced to 294 hours, and the pay increased $20,204, bringing the pay up to $28,403. By Mr. STEWART: Q. Was that part of the service that was discontinued by the Postmaster-General ?-A. Oh, yes; this service was discontinued. By the CHAIRMAN: Q. What did the evidence show that the contractor who actually performed the service received for his pay; what was the profit to the beneficiaries of the contract?-A. I see here-I do not think it can be an error, either—that he sublet it to J. J. Ellis for $8,199. That is over $5,000 more than he was getting for it originally. |