Q. Could any man with your skill and patience and labor retrace your steps?—A. Without any difficulty, froin the records as they exist. Q. In the Treasury Department?-A. Yes, sir; without any difficulty. Q. They exist without any change of figures?—A. Without a change or alteration or a scratch of any kind. You will probably find on some of the accounts which I examined, in my own handwriting, lead-pencil notes calling attention to errors in the statements of the clerks who made them. Q. But has a figure been altered, so far as you know?—A. No figure has been altered in the records of the department or papers of the department. Q. If the government should choose to continue the old mode of stating the public debt, the means of continuing it exist in the Treasury Department?-A. It is continued in the Treasury Department to this day-in the Loan Division of the Treasury Department. Q. The same old mode?—A. The same old method; and if they do as I instructed the clerks to do when I had charge of the department, every month a debt statement made from the Receipts and Expenditures in the Warrant Division is compared with a duplicate debt statement made from Issues and Redemptions in the Loan Division. Q. So that if the government should determine to go back to the old method of stating the public debt, they have but to refer to the books in existence in the department?-A. That is all; simply refer to their own records unchanged and unaltered in a single line or figure R. A. Bayley, on page 119, says: Q. Were any of the figures on the books of the Treasury Department, from which you made your statement, changed during the examination which brought out this result?-A. No, sir; not the slightest change was made. Q. So far as you know, those figures remain to-day as they were when they were first made upon the books, from 1879 to the present time?-A. Yes, sir; exactly. James Gilfillan, Treasurer, on pages 161 and 162, says: Q. I think you stated when you were here before that you had a set of books in your department that were compared once in three months with corresponding sets in others?-A. I render my account quarterly to the accounting officers. Q. Of all your transactions quarterly ?—A. Yes, sir. Q. Annual accounts too?-A. Yes, sir. Q. Is the account so rendered entered on permanent books of the Treasury Department?-A. Yes, sir. Q. Have those accounts since you have had knowledge of them been changed after they were rendered?-A. No, sir. Q. In any particular?-A. Not in any particular. Q. Could they be changed on other books of the Treasury Department without its being detected by your books? After they left you and went on the other books, if they were finally entered upon other books different from yours, of course your books would detect the difference?-A. If there was a misentry of a warrant the statements of the different offices would differ. Q. You render an account and it is closed once a quarter, and that account is entered upon some books which the Auditor and Comptroller keep?-A. Yes, sir. Q. Then does it not follow that if it is changed on their books after it is entered, your books would detect it?-A. If they were examined, but there would be no risk, it seems to me, unless the Treasurer's account was also altered. Q. What do you mean by "risk"?-A. No risk of loss. It would certainly be detected by the Register after it passed the two accounting officers. Q. If there should be any alteration while the account was in their offices it would be detected, after it passed their offices, in the Register's office?-A. Yes, sir. Q. Would it not be detected also by going back to your office?-A. I do not know that any difference between my books and the books of the First Auditor or of the Comptroller would be detected by me afterwards. Q. Why not? Suppose the account you rendered was not faithfully entered upon their books, but was changed for some purpose, would not their books side by side with yours show the difference?-A. A change of the account would most certainly be discovered. Q. Or, if after it had passed them you should change your own books, their entries would detect the change in your books? Suppose you take your books after you have rendered your account, and change them by erasing figures, could that be done without being detected?—A. No, sir; there are too many checks. Mellen C. Hooker, custodian of records, on page 164, says: By Mr. DAWES: Q. Do you know as a fact that there ever has been a warrant in the Treasury Department altered after it has been signed by the Secretary ?-A. I do not. Q. Take the apparent erasure on this register of the warrant dated June 30, 1870; is there anything there to show that it was not to correct a mistake made by the penman when he copied it?—A. I cannot see anything which does not show that fact. Q. If the penman when he copied it found, after comparing his copy with the original, that he had made a mistake in a figure in that entry of $1,166.67, would not that fact necessitate also a change in the footing?-A. Certainly, it would. Q. Is not the appearance of this book perfectly consistent with the idea that there was a clerical mistake made by the penman when he copied it?—A. It is, in my opinion. Q. Is there the slightest evidence in existence anywhere to your knowledge to the contrary?-A. There is not. None of these changes affected the actual amount of the debt then or at any previous date issued or outstanding. All the tabular statements were simply compilations from the books, which were likely to vary with the judgment or accuracy of the persons making them, and it necessarily follows that the differences between them are mainly differences of standpoint, not differences in fact. These differences are thus detailed and explained by the clerk who made the original revision in 1870, and who has ever since been engaged in analyzing them. R. A. Bayley, on pages 119, 120, 121, and 122 of the testimony, says: By Mr. INGALLS: Q. I understand you to say that you have completed the work that you were directed to perform, in reference to a complete analysis of the public-debt statement as compared with the amount of receipts and expenditures?-A. Only so far as that table goes. Q. Are you able to state what is the exact difference actually existing? There is an apparent difference of $116,000,000 in round numbers, as stated by your table. What is the exact difference actually existing between these two statements of account?— A. Do you mean between the table as there shown and the public-debt statement as issued? Q. I want to know the fact whether there is any difference at all between the amount of money that has been expended and the amount that has been appropriated ?—A. If I understand you aright, I say no, sir. Q. You say there is none?-A. None; but perhaps I do not exactly understand you. Q. In the Finance Report of 1872, on page 18, in Table I, appears a statement of the differences between the several accounts, "showing the outstanding principal of the public debt, with an explanation thereof, so far as the examination of the accounts has progressed." What I desire to obtain from you is a statement as to whether there is any actual difference between the amount of the public debt and the accounts that you have examined and have stated in your table which appears on page 18?-A. Only the difference accounted for by the note there printed, if I understand the meaning of the question aright. They are both the same, substantially. Under present circumstances, there must always remain a difference of $116,000,000, in round numbers, as shown by the note in the report before you. By Mr. DAWES : Q. State now of what items that $116,000,000 is made up.-A. It is thus made up, as stated in the note: French farmers-general loan French loan of eighteen million livres...... Spanish loan of 1781.. French loan of ten million livres French loan of six million livres.. Balance of supplies due France Dutch loan of 1782 Dutch loan of 1784. Debt due foreign officers. Dutch loan of 1787 Dutch loan of 1788 Interest due on the foreign debt.. Domestic debt of the Revolution, estimated.. The above are the details (so far as the progress of the examination has developed them) of the item in the Finance Report of 1871 (page 20), "Revolutionary debt, estimated $76,000,000." $153, 688 89 3,267, 000 00 174,017 13 1,815, 000 00 1,089, 000 00 24, 332 86 2,000,000 00 800, 000 00 186,988 78 400,000 00 400,000 00 1,771, 496 90 63,918, 475 44 Mississippi-purchase stock.. Louisiana-purchase stock. Washington and Georgetown debt assumed by the United States. Six per cent. Navy stock.. Texas-purchase stock.. The following amounts represent the discounts suffered in placing the loans named; only the money actually received was covered into the Treasury. The difference between this and the face value of the stock issued was the discount. To make the receipts and expenditures on the loan accounts correct, these discounts should be credited to the loans as receipts and charged to a discount account. The foregoing are the details of the difference of $116,105,081.45, so far as the examination of the public-debt accounts has progressed. There still remains to be explained. Total $4,282, 151 12 11, 250, 000 00 1,500,000 00 7,000,000 00 711,700 00 5,000,000 00 303,573 92 233,075 00 1,000 00 10,000 00 2, 109, 377 43 988,581 95 1,983, 895 25 1,076, 826 97 93,868 95 588,820 93 2,019, 776 10 942, 433 83 116, 105, 081 45 Q. When did this $116,000,000 first appear in the Finance Report ?-A. The first note is in 1871. Q. When did this $116,000,000 first appear; what is it a discrepancy between?—A. The discrepancy is between the amount received on account of loans and Treasury notes. Q. In the published reports in which year did it first appear to make a discrepancy?-A. In 1870. Q. Under what head?-A. Under the head of Tables K and L. Q. What are their names ?-A. "Statement of the receipts and expenditures of the United States." Q. That made a discrepancy of $116,000,000 between that statement and what other statement?-A. And the amount of the public debt as shown at that time by the debt statement. Q. This $116,000,000, then, first appeared there?-A. Yes, sir. Q. It first appeared in what?-A. It first appeared in the Finance Report of 1870, the amount itself; the note in 1871. Q. It first appeared in what part of the Finance Report of 1870 ?-A. In the tables K and L. Q. Tables which show what?-A. Which show the receipts and expenditures from 1789 to 1870. Q. In the table of receipts and expenditures there appeared $116,000,000 more that year than when? What is the discrepancy in these tables with; what do they differ from?-A. The difference between the receipts and expenditures differs from the public debt statement that amount. That is my understanding of it. Q. That year for the first time?-A. Yes, sir. Q. Which is the larger?-A. The public debt statement. Q. The public debt statement was that year $116,000,000 larger than what-what is this difference about?-A. It is a difference between the amount as shown by the receipts in these tables on account of loans and Treasury notes and the expenditures on account of the redemption of the same-between that balance and that shown by the public debt statement at that date. Q. That difference appeared for the first time in the published reports in what year?— A. Eight hundred and seventy. Q. It arose from including in one of the statements the items which you have given Were all the items which you have given that make up the $116,000,000 ever published before in the Finance Report ?-A. No, sir. Q. They were published that year for the first time?-A. Yes, sir; that is, in the year 1871. Q. And that increased the amount of the public expenditures by the sum of $116,000,000?—A. No, sir; there was no increase. Q. It increased the amount stated in the report when published for the first time; or what effect had it?-A. It was included in the aggregates as published. There is no mention of the difference in any shape in 1870. Q. It was included in the public expenditures in 1870?-A. Yes, sir; in that table. Q. Was it ever included in the table of public expenditures before that time?—A. I think very likely it was. It must have been, so far as the expenditures were con cerned. Q. If it had always been included, how came it, then, to make a difference in 1870?— A. It did not make any difference; there was no difference. Q. Then you have not accounted for how a difference in 1870 arose by including $116,000,000?—A. I have not pretended to. Q. Will you make the effort?-A. I have attempted to explain, by this note, why it is that the difference between the receipts from loans and Treasury notes and the redemptions of loans and Treasury notes does not agree with the public-debt statement of that day. Q. Why do they not agree with it?-A. For the very reason I have stated. Q. Because in one of them these items are included and in the other they are not?A. No, sir; because in the receipts from loans and Treasury notes are included all moneys received for that purpose, and in the expenditures are included all the money which has been paid out for redemption of the public debt. The government having received no money for these items which I have named here, of course they cannot appear as receipts. Q. Do you mean to say, then, that it is because in the receipt column this $116,000,000 does not appear?-A. Yes, sir. Q. While it does appear in the redemption column ?-A. Yes, sir. Q. Is that the whole explanation of this difference?-A. Yes, sir. Q. The reason why it did not appear in the column of receipts arose from the mode of keeping the books in those times?-A. No, sir; it arose from the fact that no money was received, the bonds or stock having been issued to pay indebtedness. Q. It arose from the fact that the books which kept the account of receipts only have no place in them for these items?-A. Certainly. They did not belong there. Q. And you obtained those items from another source?-A. I obtained those items from the statements of redemptions and expenditures on account of the public debt. Q. Were all the items that make up the $116,000,000, or were they not, on the books of the Treasury Department?-A. So far as the expenditures go, they were. Q. Were you enabled to make up the amount of this $116,000,000 from data on the books of the Treasury Department?-A. Yes, sir; wherever I attempted to; that is to say, when it was necessary for me to go to the books. If I had any doubt of anything, I went to the original books to see it. Q. You made it up entirely from books of some kind?-A. Entirely from the accounts of the government. Q. Did you make up this whole amount of $116,000,000 from data that came from the books of the Treasury Department?-A. Yes, sir. As to these the committee's expert, William Woodville, on pages 186 and 187, says: Q. Take the public debt, treated by Receipts and Expenditures instead of Issues and Redemptions, how much difference does there appear to be by that statement ?— A. $116,000,000, in round numbers. Q. Does that agree in amount with the statement made and found in the Finance Report of 1871, made up by Mr. Bayley, who gave testimony here?-A. No, sir; it agrees with the Finance Report of 1876, page 18, because there were some other things brought in in the mean time. Q. How much difference was there?-A. $250. Q. Then the statement you have been questioned about by Senator Ingalls, and the one produced here by Mr. Bayley, the Treasury clerk, agree within $250?—A. Exactly. They are precisely the same when divided into periods. Q. They would have agreed, but that he stopped in 1871 and you went further?— A. I went to 1879, and in the mean time there has been an expenditure where there has been no corresponding receipt. If you state the public debt by Receipts and Expenditures, every expenditure where there has been no receipt will make a corresponding discrepancy in this way of stating the public debt, By Mr. DAWES: Q. And that is the explanation of this whole trouble?-A. Yes, sir. By the CHAIRMAN: Q. Then I understand that in making up the debt by receipts and expenditures S. Rep. 539-v instead of the way it was formerly made up, by issues and redemptions, there is a difference of $116,000,000.-A. Yes, sir. Q. And that is principally from the fact that bonds were issued for which no amounts went into the Treasury, and ween they were redeemed money went out of the Treasury for them?-A. Yes, sir. There is another thing. If a loan is sold at a discount, the difference between the receipts from that loan and the par value will make exactly a corresponding discrepancy in this way of stating the public debt. The Register accepted none of these changes blindly or simply in obedience to orders. He caused an examination to be made of the books and accounts in his office, the result of which is stated by the present Register of the Treasury, as follows: By the CHAIRMAN: Q. The Register had kept an account from the earliest day of the government; the organization of the office shows that he has been the official bookkeeper of the government; but instead of comparing his own statements as previously made to Congress, he adopted under the instructious of that letter such statements as was sent him from the Secretary's office. Is that the true statement of it?-A. Yes, I may say that, in the main; but by comparing the receipts and expenditures account, which was registered in our office, they were found, I believe, to agree in the main with those in the Secretary's office. But there were no changes made in the books. My understanding is, that after the order from Mr. Saville the report made in the Secretary's office was adopted by the Register; but there has been, also, at the same time an examination of the books in the Register's office another set of books, by which it was ascertained that the report in the Secretary's office was the correct one. I have stated that one reason why the books kept by the two offices did not agree was, that one was kept by "issues and redemptions," and the other by "receipts and expenditures," which would cover all redemptions. Another subject of difference was the trust fund belonging to the government. They were sometimes put in the public debt, and sometimes omitted. William P. Titcomb says, on page 13: Q. What did the changes involve?-A. It was believed that the changes involved corrections, and that after the changes were made the statements were more nearly the absolute facts. As I understand it, the changes were based on the belief that the former statements had not been so absolutely correct. And the same witness, on page 21, says: By the CHAIRMAN: Q. Mr. Beck has asked you whether your report made to the Secretary and by the Secretary to Congress ought not to be an exact transcript of your books at all times?— A. I should call them a compilation from the books. It is bringing together various items. Q. And should be a true statement, and intended to be a true statement, from the books?-A. Undoubtedly. And on page 17 the same witness says, in answer to a question by Mr. Allison: Q. In the letter above alluded to the Register states that he sends to the Secretary "A report on the public debt according to the receipts and expenditures, and also comparative statements showing the differences between the loan account and the receipts and expenditures account"; and he also states that in making up this report "it necessitated the re-examination of every account from 1836 to July 1, 1871." Will you ascertain under whose direction this report was made up and furnish this report to the committee, as well as the name of the person under whose immediate charge it was made?-A. I can state now by whom that examination was made, or the person having charge of it, and who made the report. It was the then chief clerk of the Register's office, Maj. J. T. Power, who is now the chief of the warrant division in the Secretary's office. Joseph T. Power says, on page 66: Q. Was there a careful and detailed examination made of the books of the Register's office from 1833 to 1870, inclusive, when these changes were made?—A. I understand that there was. Q. How long did it take and how many clerks ?-A. My recollection is that Mr. Saville asked the Register to detail two clerks from the office for this purpose to work |