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Q. What they were originally you do not know ?-A. I do not.
Q. What mistake was corrected you do not know !-A. No, sir. -
Q. Or by whom it was corrected you do not know !-A. No, sir.

Q. The next one simply has the word " canceled”!-A. Yes, sir. No amount at all is there carried out.

Q. “February 6 " is one which purports to be “amount altered and scratched." Do you make the same statement in reference to that that you did in reference to the first ?-A. Yes, sir; just the same.

Q. What that entry was originally you do not know ?-A. No, sir.

Q. What occasion there was to make any erasure on the paper you do not know ?-A. No, sir.

Q. Nor by whom !-A. No, sir.

Q. What you say in reference to this you say in reference to them all ?--A. Yes, sir.

Q. Can you produce here in this room each one of these books ? I think we ought to see them. It is a question for the eye.

The CHAIRMAN. I have gone over a good many of them myself.

The W'ITNESS. They can all be here at any time you wish to see them.

Q. (By Mr. DAWES.) Is there any indication upon any book that you have seen as yet of an alteration of any figure in the book after the quarterly comparing of it with the other books in the department?-A. That I could not tell. I have seen some of the totals in the quarterly statements of the Treasurer scratched, but I never compared them with the others, because I did not have sufficient time to do that.

Q. If there had been any alteration in the books of one bureau after the quarterly balances had been tried, would it not be necessary to alter them in all the bureaus in order to have them correspond ?-A. That depends upon circumstances. It may have been an error in addition in one case which they may have corrected.

Q. After they had been compared and found to agree at the end of each quarter, could there be an alteration in one that would not necessitate a like alteration in them all, or show to-day the discrepancy ?-A. I talk as a bookkeeper. There may have been an error of addition in one and it may have been scratched before any comparison was made. That is what I mean to say.

Q. Of course; and as to any of these erasures or scratches, you do not know whether they are of that kind or not?-A. I could not tell.

Q. But you know as a bookkeeper that after three sets of books have been compared and found to agree, if one gets altered after that it necessitates the altering of all the others ?-A. You would have to examine first to see whether they disagreed.

Q. Can you not answer that question ?-A. I could answer that question. If they all agree, of course they are all right.

Q. Then if there is any alteration after that in one it must necessitate the alteration of them all?-A. Yes, sir.

Q. Have you compared any of these items that you have put down here as altered or erased in the books of any one division with the cor. responding items in any of the other books to see whether they had been altered in them or not? -A. We did compare some, but whether it was that statement or not I am not prepared to say. I could, if Mr. Byrne were here, tell positively; but I am not prepared to say under oath.

Q. Whether you compared any one item which appeared to you to have been altered or erased in one book-you do not know whether you compared it with the corresponding item in another book ?--A. We did in some instances, but whether in those on that paper or not I do not know. He put a private mark on and I cannot tell without seeing it.

Q. Did you find the same item altered or erased in the books of different bureaus 1-A. Yes, sir.

Q. What was that?-A. That I cannot tell. I know in several instances they were scratched all the way through the Treasurer's accounts.

Q. The same item ?-A. Yes, sir.

Q. Will you ascertain each of those items and bring them to the committee the next time it meets, and the book in which they are ?-A. I will.

Q. How many items did you look over to find this number which had been at some time erased or scratched ?-A. I did not make this out, but I have looked at the books and verified it by the books. I do not know how many were gone over by Mr. Byrne to find this number. I only know that I took these which Mr. Byrne had put down and verified them..

Q. How many entries are there in the books in which you found twelve hundred ?-A. In all the books.

Q. Can you form an estimate of the number of entries you went over to tind these twelve hundred changes ?-A. An enormous quantity.

Q. Were there a million entries ?-A. All the bonds issued for those years; I cannot tell according to numbers, because each classification has its own number. I could show you one of the books.

Q. Do you think there were a million different entries in those books! A. I really could not say ; I never counted the entries. I cannot form any estimate. They could in the Warrant Division, where they issued them, form some estimate, but I never made the experiment.

Q. How many books did you go through to find these twelve hundred ?-A. Thirty-two books.

Q. In thirty-two books you found twelve hundred entries that you thought had been, either when originally made or at some other time, changed !--A. I do not say when I say I found erasures and scratches, old amounts scratched and new amounts substituted, canceled warrants and everyting included under this.

Q. Wherever you saw a scratch you counted one?--A. Wherever there had been an alteration or erasure.

Q. Whether it was made at the time of the original entry or some other time you do not know ?-A. I cannot say anything about that.

Q. What dates do those books cover I-A. I examined from 1860 to 1867, inclusive-eight years.

Q. What do those books purport to contain ?-A. The accounts of the Treasurer,

Q. Of the Treasurer's disbursements !--A. Receipts and disbursements.

Q. Of the Treasurer of the United States ?-A. Of the Treasurer of the United States.

Q. What are they, the first entry books or the ledgers ?-A. They call them their ledgers. It is the record of all the moneys paid out of the Treasuv by warrants,

Q. Is that transferred to any other book ?-A. No sir; it is the original payment of the warrant under each classification.

WASHINGTON, January 10, 1880. RAFAEL A. BAYLEY sworn and examined.

By the CHAIRMAN: Question. Are you engaged in the office of the Secretary of the Treas. ury ?-Answer. I am.

Q. At what ?-A. Clerk in the Warrant Division.
Q. How long have you been there ?-A. Since August, 1870.

Q. What are your general duties in the office ?-A. Miscellaneouspreparing statements, and current work of any nature.

Q. Do you make the debt statements ?-A. Yo, sir.

Q. Do you have anything to do with them ?-A. Nothing at all. I only send them out after being prepared.

Q. Do they go through your hands ?-A. After they are prepared, and then for mailing only.

Q. Did you, in 1870, assist Mr. Saville, chief clerk of the Treasury Department, in making up a revisory statement of the accounts in the Seeretary's office ?-A. I did.

Q. How long were you at it ?-A. About four months and a half. And here I would like to read a statement pertaining to the whole matter.

Q. We will allow you, after we are done, to read any statemeet you wish; but what you have written might not be directly what we want. Had you assistants in that work ?-A. Yes, sir; William Guilford assisted me from time to time. I was under the direction of Ross A. Fish-that is to say, he was my immediate supervisor. Of course, I knew nothing about the work when I began.

Q. How many were engaged at it in all ?-A. No one but myself at that time in the actual work. If I wanted any advice or assistance from either Mr. Fish or Dr. Guilford, I asked for it, and it was always furnished me.

Q. Did you do the entire work yourself ?-A. I did; that is to say, I understand you are speaking now of the tables in the Secretary's report.

Q. The debt tables ?-A. No, not the debt tables, but the receipts and expenditures.

Q. On account of the public debt?-A. No, sir; the Receipts and Expenditures of the Government, Tables K and L, I think, in the Secretary's report of 1870.

Q. Of general receipts and expenditures -A. Yes, sir. It appeared there for the first time that year.

Q. Who was engaged on the debt part of the statement connected with those tables? (Exhibiting to the witness the report of 1870, with the Tables K and L.] Are those the tables !-A. The whole of this and the whole of that (indicating Tables K and L) are my work from begin. ning to end.

Q. Are these the receipts and expenditures on account of the public debt?-A. Yes, sir; to a certain extent.

Q. State, now, how long you were at it.-A. About four months and a half in preparing that particular table.

Q. You did the whole work yourself?-A. Yes, sir; the actual manual labor, figuring, &c.

Q. Where did you get your data ?-A. From the printed receipts and expenditures, so far as printed at that time. Down, I think, to 1866 they were printed.

Q. Where did you get the other four years from ?-A. From the books in the Warrant Division.

Q. Of the Secretary's office ?-A. Yes, sir.

Q. How did you find the tabulated statement of Receipts and Expenditures as reported by the Register previous to 1860 ?-A. I made no comparison until after the work was all done between the two. I did not know anything about those statements.

Q. How did you find them when you did make the comparison ?--A. I found that we differed somewhat in sereral instances.

Q. How did you find the public-debt portion of it ?-A. In comparing with the table of 1869, after this table was prepared, there was quite a number of differences.

Q. My question is, previous to 1860, not between 1860 and 1870.-A. Previous to 1860, I think, there was some considerable number of differences. I can hardly recollect just at the moment, but to 1833, if my memory serves me aright, they agreed, and subsequent to that, I think, there were quite a number of differences, not very large in any one case.

Q. As a whole, how did you find the statements in regard to the public debt previous to 1860 ?-A. It is so long since I made the comparison that I must say I do not remember exactly on that point.

Q. You made your statements from the printed Receipts and Expenditures so far as they had been printed ?-A. Yes, sir. Q. You accepted them as correct ?--A. Yes, sir.

By Mr. DAWES : Q. Down to 1860 ?-A. Yes, sir; I think it was to 1866 that they had been printed at that time.

By the CHAIRMAN: Q. Do you know anything of what is known as the Pacific Railroad debt, that was in the public-debt statement up to 1869 ?-A. No, sir; nothing particularly, only that the bonds were included in some of the debt statements issued prior to that time.

Q. Were they included in your statement made in 1870 ?-A. No, sir; I think not.

Q. They were dropped ?-A. I think so; that is to say, the bonds issued for Pacific railroads were left out.

Q. Have you got memoranda by which you can tell us when they were dropped ?-A. I think in 1870; perhaps some time before that. I know they appear on the statement of August 31, 1865. Whether they do subsequently or not I cannot say at this moment.

Q. Were they treated as part of the public debt at that time?-A. By that statement they were. Q. But in the statement you made they were not ?-A. No, sir.

By Mr. DAWES : Q. Is there any fuller statement you would like to make of what you did while in charge of this business I-A. Regarding the circumstances under which it was made up ?

Q. Make as full a statement as you desire to do about the matter.A. This was written some years ago, and was merely for the purpose of preserving the facts. This is a statement of the circumstances under which the statement was made (producing a paper).

Q. You have the original statement prepared some time since ?--A. Yes, sir; I have a written statement prepared some time since as to the circumstances under which Tables K and L in the Finance Report of 1870 were prepared.

Q. How long is it since this statement was prepared ?—A. To the best of my recollection it was about four years ago that these notes were written, at a time when the whole matter was fresh in my mind.

Q. Do you desire to make that statement a part of your answers here?-A. Yes, sir; I should like to make it an answer, for the reason that it explains fully the circumstances under which these tables were prepared.

Q. Read the statement.-A. It is as follows:

In August, 1870, I was appointed a first-class clerk in the office of the Secretary of the Treasury. I was assigned to duty under the direction of an old experienced offi. cer, and directed to make a careful examination of the accounts of the government from its organization, with a view of preparing a detailed history of all its receipts and expenditures, on every account, arranged in such a manner as to enable the Secretary's office to reply to the numerous inquiries constantly made by Congress and the public for information, to answer which required much time and labor, and being made up in different offices by different clerks, in many cases from different data, experience had shown to be too often incorrect, and consequently frequently led to a misunderstanding of the true method of keeping the public accounts and preparing these statement.

My instructions were to spare no exertions to make this work as absolutely correct as skill and labor could make it, and under no circumstances to allow any error which could be discovered to go uncorrected.

For four and a half months I was engaged exclusively in preparing the statement of the receipts and expenditures of the government from March 4, 1709, to June 30, 1870, as shown in Tables K and L in the Finance Report of the Secretary of the Treasury for 1870, pages xxvi to xxxi, and which table has been continued annually since that time, prepared for succeeding years in the same manner and from similar data, It must be borne in mind that previous to commencing this work, I had no knowledge of either the manner of keeping the public accounts or the method of classification which had been adopted in the preparation of the tables which, up to that time, had always been made up in the Register's office. Consequently, I.had to be governed entirely by the advice and instructions of my superior, in cases where I had some doubts as the correctness of my own judgment.

Natural pride impelled me to an extra-careful examination of every detail of each item of account, that I might feel reasonably sure of being correct, well knowing the results would be subject to a critical examination of older and more experienced officers of the department, and an error would very soon be discovered.

All my memoranda were carefully preserved to the end, and in due time the tables were printed, and for the first time published in the report of the Secretary in December, 1870.

But a short time after the issue of the tables to the printer, and while looking over some of my memoranda, the thought suggested itself to my mind that the difference between the gross amounts of the receipts from loans and Treasury notes, and the disbursements on account of redemption of the principal of the public debt, should agree with the amount of the public debt as shown by the “Public-debt stateinent," then, as now, issued monthly from the office of the Secretary. Bear in mind, at that time I had not the slightest knowledge of the manner in which the public-debt statement was prepared, but it seemed plain to me that, if my accounts were correctly stated, the result should agree with that of the debt statement. It was but little work to make the calculation, which done. I found a difference between the two statements of $116,104,831.45, there being that amount more outstanding by the public-debt statement than by the receipts and expenditures as shown by the tables just completed and already in the hands of the printer.

Feeling confident of the correctness of my work, though entirely ignorant at that time of the cause of this apparent discrepancy, I immediately called the attention of the chief clerk to the facts as they presented themselves to me, and asked his advice. His instructions were to look up the matter carefully, examine all my previous data, and see if I could find a cause for this very large discrepancy.

Ere long I discovered the fact (hitherto unknown to me) that the government was in debt over $75,000,000 at the beginning of its administration, all of which had been redeemed (as was believed at that time), and here was so much of the difference accounted for at once, as will be readily seen, the government having paid off this amount of indebtedness, no portion of which had entered into the gross amount received on account of loans under the present form of government, and consequently the pres. ent system of public accounts. On making this discovery known to the chief clerk, he remembered the fact immediately and said at once, “You have struck the right clew; now go ahead and follow it up to the end. You will find there are other instances of a similar kind, and as we know both accounts are correct, the apparent discrepancy must be susceptible of explanation."

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