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Q. I understood from your former testimony that you had no separate account of accrued interest till a recent date ?-A. I tuink only since the last fiscal year.
Q. What is the difference between "special" and “ sinking fund,” as reported ? In the’report of 1870 there is a table of the Treasurer which speaks of " special” and “ sinking fund.” I want to know what the difference between those two funds is, if there is any ?-A. The Treasury bought a great many more bonds than were required for the sinking fund, which were set apart and called, for distinction, “the special fund.” The sinking fund is required by law, and the special fund was simply a regulation of the department.
Q. When you came to deduct from the public debt the canceled bonds, was any distinction made then, or was the whole amount canceled and deducted in the same way?-A. They were all canceled and deducted in the same way.
By Mr. DAWES: Q. You canceled the bonds in the special fund the same as those in the sinking fund ?-A. Yes, sir; at the same time and in the same manner. The bonds in the sinking fund were distinguished by having “ sink. ing fund” printed across the face.
By the CHAIRMAN : Q. When you came to deduct the amount from the public debt, was there any distinction made between the two ?-A. Not as far as deduction was concerned.
Q. Are you a bonded officer ?—A. Yes, sir.
Q. What other bonded officers are there in the department ?-A. Except the disbursing officers, I think the Comptroller of the Currency and his deputy are the only bonded officers.
Q. Do the disbursing officers belong to the department ?-A. They were formerly designated from the clerks; are now appointed by the Secretary
Q. I have reference to the heads of bureaus or divisions. Are any of them bonded officers ?-A Those are the only two.
Q. Do you know the amount of the bond of the Comptroller of the Currency ?-A. I do not.
Q. The head of the Loan Division is not a bonded officer?-A. No, sir. Q. Nor the head of the Public Moneys Division ?-A. No, sir.
Q. Are those two officers appointed by the President or by the Secretary; do you know?-A. By the Secretary.
Q. Can you tell us what officers in the department are Presidential appointments ?-A. All the heads of bureaus, and the deputy officers and assistants.
Q. But the chief of the Public Moneys Division and the chief of the Loan Division are appointed by the Secretary, and are not bonded officers 1-A. They are appointed by the Secretary, and are not bonded officers.
Q. At the end of your fiscal year, how long does it take you to get in the statements before you close up the year's work, on the average?-A. We usually close in forty-five.
Q. Are you notified when the last warrant of the year is issued from the Secretary's office, so as to know what the last warrant should be belonging to the fiscal year?-A. Yes, sir; also each month and each quarter.
Q. And, usually, at the end of the year, the average time is forty-five
days before you close up an account and begin the warrants for the next year?-A. Before we close the quarter it would usually be fortyfive days, to get in all the receipts.
Q. That is for the purpose of getting in accounts that may not have come in promptly, and getting in anything that may have started in one division and not got through the others, &c., is it?-A. Yes, sir.
By Mr. DAWES : Q. You said that you thought unclaimed interest should be transferred to outstanding liabilities, after three years ?-A. Yes, sir.
Q. Would it require an appropriation to pay it then ?-A. No, sir.
Q. It is provided for by a permanent appropriation, and that would apply the same whether it was in the account of outstanding liabilities or in your account by itself ?-A. Yes, sir.
Q. Is there.any danger to the Treasury? Is the Treasury exposed to fraudulent claims of that kind ?-A. Yes, sir, now.
Q. After three years are you more exposed to fraudulent claims than you are before -A. It is a question of evidence. Probably for three years we would always be able to get evidence as to who was the rightful claimant; but when it gets to be old, as the interest generally belongs to estates, the person in whose name it stands being dead, it is very difficult to verify the claims.
Q. Your proposition to transfer those accounts into outstanding liabilities is to make it more certain that the person presenting the claim is the genuine owner of it?-A. Yes, sir.
Q. Because over that account there are more safeguards than there are over simply “unclaimed interest”?-A. Yes, sir. The payments now are made usually on a power of attorney presented at the counter. The only safety we have now is in comparing the signature on the power of attorney with the genuine signature on file in the department, and very often there is no signature on file.
Q. Does any other benefit to the Treasury than that occur to you from transferring this account?- A. I do not know of any other.
Q. It is for the purpose of protecting the Treasury against fraudulent claims ?-A. That is all.
Q. You are, of course, acquainted with the method of placing loans in the Treasury Department. How long have you been acquainted with it?-A. I have been in the Treasurer's office for about eighteen years.
Q. And have been familiar with the routine method nearly all that time?-A. Yes, sir; so far as it pertains to the Treasurer's office.
Q. Can you suggest a method of routine by which when a loan is placed you could throw greater safeguards around it than those now used ?-A. I am not prepared to say.
Q. You have no system in your mind that would make it safer than the present method ?-A. No, sir; I have not.
Q. In the present method at any point is the Treasury exposed espe. cially to fraud ?-A. I have always considered it objectionable that bonds should be issued on the certificate of other than the officer who received the money, as is now the case.
Q. Is it practicable all over this country to get the bonds back to the depositor, to the place of deposit 1-A. Not without expense.
Q. In that very process would it be exposed to any dangers ?-A. I cannot recommend any such system as that.
Q. Can you recommend any substitute for the present method that in your opinion would be safer for the Treasury ?-A. Only with that ex.
ception, that the Register should have the original certificate of the deposit of the money in the Treasury.
Q. You would recommend that change in the method, as an additional security ?-A. Yes, sir.
Q. And that whether the money was deposited with you, with a subtreasurer, or with the Loan Division ?-A. Yes, sir.
Q Have you ever suggested that change to the head of the department?-A. No, sir; it was suggested by my predecessor, General Spinner, to Mr. Boutwell.
Q. But has not been suggested since !-A. Not that I know of.
Q. Is there any other point than that where the Treasury is specially exposed to a fraud !-A. None that occurs to me just now.
Q. Is there any point at which the whole thing depends upon the personal integrity of one individual 1-A, I think it all depends on integrity.
Q. Of one single individual as to all of a loan? Do all the different steps in the process, going through from the deposit of the money to the return to the depositor of a bond in its place, depend on the integrity of one individual ?-A. And his subordinates.
Q. How many does it depend upon the integrity of ?-A. I am not certain how many hands an order for a bond passes through.
Q. At any one point, does it depend on the integrity of one single individual, or must others co-operate with him? Take it from the time the person desirous of obtaining a bond deposits his money to the time he gets the bond for which the money was deposited, in its passage around and back to him, does it reach any point where it depends solely upon the integrity of a single individual whether the government is defrauded or not, so that when A deposits $10,000 he may not receive a $100,000 bond? Can he get a hundred thousand dollar bond by depositing in the Department $10,000, without involving the complicity of more than a single individual ?-A. Without full knowledge of the details in the Secretary's office, with what knowledge of the detail I have, I think not.
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. 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 1-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 dif. ference?-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 I-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 recalled.
By the CHAIRMAN : Question. There were two warrants covering the permanent and indefinite appropriations for 1868 and 1870, that we asked you to produce to us when you were last before us. Have you been able to find them ?Answer. I have not.
Q. Have you made an effort to find them !-A. I have.
Q. You are custodian of the warrants, I believe I-A. Of the appropriation warrants.
By Mr. DAWES: Q. Are there duplicates of those warrants and of all warrants, in other parts of the Treasury Department, besides those in your custodyA. There are duplicates or registers of them all.
Q. Have you made search to ascertain whether you could obtain duplicates or registers of these particular warrants -A. I have.
Q. With what result!-A. They can be found.
Q. If anybody desires to know anything about what either of those warrants was originally, it can be known by consulting the duplicate and the register, can it not I-A. It can.
Q. Have you been called upon by the chairman to look after the duplicates and registers I–A. I have.
Q. To produce them here!-A. I have.
Q. Did you produce both duplicate and register, or only the duplicate?-A. Only the register.
Q. Have you compared that register with the duplicate that is also kept?-A. I have not.
Q. A comparison between the register and the duplicate would detect any discrepancy that might exist ?-A. Certainly.
Q. So that the loss of the original, which belongs in the files, of which
you are custodian, does not deprive the Treasury Department of the evidence of what that warrant was?—A. Not in the least.
Q. How this original came to be out of your files you do not know !A. I have no knowledge.
Q. It was the fact at the time you became custodian of them?-A. It was.
Q. When it occurred, or for what reason, you are ignoranti-A. I know nothing about it.
Q. But all the time there has existed this register of these warrants and this duplicate of them in the Treasury Department open to anybody who had a right to consult them?-A. Yes, sir.
By the CHAIRMAN : Q. Is that in the shape of a warrant, or is it in the books in the form of an appropriation apparently on the books? Is the duplicate a duplicate warrant on paper, or is it in the books ?-A. I understand it is in both forms.
Q. Will you produce a warrant which is written on paper, a duplicate other than in the books? We know it is in the books, the examination shows that. If you produce that I shall be obliged to you.--A. It is possible I may be mistaken about the duplicates of that class; I am not certain. I can ascertain in a few moments.
The CHAIRMAN. Please do so.
The witness, after a brief absence, returned with a book, which was submitted to the chairman and examined by him.
Q. (By the CHAIRMAN). You produce this as the book containing the duplicate of one of the warrants as to which you were interrogated ?-A. I do.
Q. Explain in your own way what you wish to state about it?-A. I have found the duplicate of the last warrant under consideration, which is No. 947 of 1870, prior to which time there was no copy or duplicate made in the Secretary's office of that class of warrants.
By Mr. DAWES : Q. Was there a register of that class of warrants kept?-A. There was, and always has been.
Q. So that there could have been found a register of it at any time?A. Yes, sir.
Q. Whether the original was in the possession of the department or not?-A. Yes, sir.
Q. Ever since 1870 there has been also a duplicate as well as the same register ?--A. Yes, sir.
By the CHAIRMAN; Q. Does this purport to be an exact transcript of the original warrant?-A. I suppose it to be from the information I have received.
Q. I notice, in opening here, two erasures on this first page of this duplicate. Can you give any explanation of these ! The amount of the item is $1,166,976, and the addition is $30,52990. Those two entries on that page appear to be erased, and new figures apparently have been substituted. Do you know whether that is so on the original ?-A. I do not know anything about it.
Q. I notice other apparent erasures in the book. You know nothing about the cause of them yourself!-A. I cannot say that I have any knowledge of the erasures of those particular figures, except that they might be produced from various causes.
Q. Are there various causes which might produce changes on a war.