an account adjusted by the proper Auditor and certified by the proper Comptroller.

Note. The Secretary of the Treasury does not make requisitions on himself for payment of adjusted accounts of his department, and the Secretary of State does not make requisitions to pay settled accounts pertaining to his department, as the law provides that the Register of the Treasury shall furnish copies of such certificates of balances of accounts adjusted, upon which the Secretary of the Treasury issues his warrants.

5. Upon the requisition of the proper department, or upon a copy of an adjusted account of the Treasury or State Department, the Secretary of the Treasury issues his warrant on the Treasurer, specifying the particular appropriation to which the same is chargeable, which warrant is countersigned by the First Comptroller and registered by the Register and charged upon their respective books to the designated appropriation.

6. The Treasurer pays this warrant by drawing his draft on himself or other depositaries in favor of the payee of the warrant, which draft is registered by the Register and delivered to the payee.

7. The Treasurer sends the warrant with the draft, when paid and properly indorsed, to the First Auditor and First Comptroller and receives credit in his quarterly account for the disbursement of that amount of public money.

Q. Would you suggest to the committee any additional check by law that would make the system more perfect than you now have it in paying in and taking out money from the Treasury?-A. I think we should have authority of law to treat our unavailables as an appropriation account. These unavailables arise in this way: A public depositary becomes insolvent, and all public moneys in his possession become unavailable to the Treasury; there is no way by which the Treasurer may receive proper credit therefor and the depositary be charged except by an account known as "unavailables," which are reported in the Finance Reports in a distinct column. This is an innovation on the system, and if Congress would authorize the department to treat this as an appropriation account, and throw around it such safeguards as would prevent fraud, it would be great advantage to the system of public accounts.

Q. Is there anything else you would suggest in this connection ?—A. In 1836 there was deposited with the States surplus revenue to the amount of $28,101,644.91. This money now remains on deposit with the several States precisely as money is now deposited with any depository, and is a part of the cash in the Treasury; and to this day this amount of money has to be carried on the public accounts among the unavailable items. I think the department ought to have authority to charge this off to the States or arrange it in some way, so that it can be taken from the cash account.

Q. Why should this be charged off?-A. It is troublesome to the department to carry this amount forward upon the quarterly statements, and it also shows the cash in the Treasury, as published in the Receipts and Expenditures, that much in excess of the actual available funds, while in the ordinary statements furnished from the department this sum is deducted, thus creating confusion and misunderstanding.

Q. You speak of unavailables; are they large? Can you give us the probable average per annum?-A. The whole amount since the commencement of the government to the end of the last fiscal year is $2,661,866.53, excluding the amount deposited with the States.

Q. Can you give us what it was in 1860 as compared with the total amount?-A. Since 1867 we have diminished it. I have not got the additions since 1860.

By Mr. DAWES :

Q. What was it in 1867 ?—A. In 1867 it amounted to $2,675,918.19.

By the CHAIRMAN:

Q. Can you fix what the amount was in 1860?-A. Yes, sir; in a moment [examining]. In 1860 these items amounted to $1,749,579.64. Q. What is the increase between 1860 and 1867 of the unavailables? -A. The increase was $926,338.55.

Q. Do you know whether a letter was sent from the Secretary's office to the Register in 1870 directing the Register to change or alter the public debt statement?-A. I remember such a letter. It came to the Register and was by him handed to me, and I passed it to the chief of the division in charge of the statements referred to in the letter.

Q. Do you know whether the Register thought it or not a proper thing to do to carry out the instructions of the letter?-A. The Register objected very strongly to the change suggested in the letter, and my recollection is that he presented his objections to the Secretary.

Q. In person or in writing?-A. In person.

Q. Do you recollect the result of the objections?-A. I only know what Mr. Allison, the Register stated as the result at the time.

Q. Now tell us what Mr. Allison stated to you at the time as having taken place between him and the Secretary?-A. My recollection is that about this time the subject of the change in the manner of stating these accounts was before the department, and whether immediately before or after the receipt of this order Mr. Allison communicated to me the fact that he had had an interview with the Secretary, and had given his views that these changes should not be made.

Mr. DAWES. I object to any statement by the witness of what Mr. Allison told him as having transpired between Mr. Allison and the Secretary.

The CHAIRMAN. I think it a proper question, as the investigation, in my judgment, was intended to be full and complete.

Mr. DAWES. I think hearsay testimony should not be received as part of the evidence before this committee.

The CHAIRMAN. I claim that this is not hearsay. A communication from the Secretary to the Register, as communicated to the witness, who was then the principal assistant to the Register, on this subject, is proper evidence.

Mr. DAWES. I do not object to anything which the Secretary communicated to the Register, but I do object to the views which the Register entertained on the propriety of carrying out the order of the Secretary. That is what the witness is testifying to.

The CHAIRMAN. I think anything that was told the witness by the Register is proper evidence. Any communication from the Register in his official capacity to the witness I think is proper evidence.

Mr. DAWES. To that I agree; but no part of the statement the witness was making, and to which I objected, was in any sense an official communication.

Q. (By the CHAIRMAN.) I now ask you to state what was communicated to you by the Register in connection with the letter received from the Secretary's office and the change in the public debt statement.-A. After the receipt of the letter he passed it over to me to be carried into effect. I do not know how long it was, but it was some time after the receipt of the letter.

Q. What else took place between you and the Register when the letter was handed to you; what was said between you and him at the time?—

5 TREAS

A. Nothing more than his views in regard to the propriety of the order. That was about all.

Q. What did he say on that point?-A. I have stated, I think, that the Register had objected to that manner of correction.

Q. Were the tabulated statements of the debt, as formerly communicated to Congress in the Finance Reports, changed under that order and different amounts put down?-A. The statements were made in a different manner. They were not changed, but a different plan of stating the facts was used.

Q. Were the figures and the results the same?-A. No, sir; they were made on a different basis, by a different method.

Q. And brought out different results, or the same results?-A. They are different as to the amount outstanding at the end of any particular year.

Q. Take the statement marked "F" in the testimony before this committee and say whether the changes and difference between the figures are correctly stated in that statement from the Secretary and the Register, as they appear in the reports of 1870 and 1871?-A. In this statement I see the first column of the Finance Report of the Secretary for 1870 at page 25 represents the outstanding debt at the end of each year from 1832-33 to 1870, inclusive. The second column shows the outstanding at the end of each year as taken from the Register's statement in the Finance Report of 1870 at page 276. The next two columns represent the Secretary's compared with the Register's, the first column showing the increase and the second the decrease. That increase represents the amount outstanding in one report in excess of the other report, and appears to be correctly taken from those Finance Reports.

Q. Was the Register's report changed between 1870 and 1871 as represented upon the right-hand column?-A. The Register's report for 1871 makes a different statement, showing a different amount outstanding for those years.

By Mr. DAWES:

Q. Different from what?-A. Different from the statement in the report of the year before.

By the CHAIRMAN:

Q. Was this different statement the result of the letter received from the Secretary's office?-A. It was.

Q. Are the amounts set forth in the increase and decrease columns of this table F the true amounts as to each year?-A. They appear to be the true amounts of the increase of one report over the other.

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 on these statements in connection with other clerks in the Secretary's office, but how many were from the Secretary's office I do not know. I think they were at work less than a year.

Q. Did you yourself do the work?—A. I did not do this work, bit afterwards went over it all, or it was all gone over under my direction and immediate supervision; that is, in making up this report as it p pears in the Secretary's statement in the Finance Report for 1870.

Q. What books did you examine in going over it yourself?-A. Te Receipts and Expenditures, in connection with all the other records the office when occasion required.

Q. What office?-A. The Register's office.

Q. Did you examine the books of the Secretary's office also; in other words, was it from the books of the Secretary's office or those of the Register's office that you made your examination?-A. The books of the Register's office; and I used the printed books for more convenient use, the printed volumes of Receipts and Expenditures.

Q. That is, you accepted what you found in print as being correct, and did not go to the books themselves?-A. Not unless there was something to attract attention or making it necessary to go into an examination of the books and accounts.

Q. How long were you engaged in the examination of the years from 1833 to 1870?—A. As I said before, I did not make the examination, but merely verified the results by going over the same accounts after the statement had been prepared.

Q. Do I understand from this that you examined each item that went to make up the account, or that you took the footings as you found them upon the ledgers and in print?-A. As will be noticed here, there is a difference in the two statements, and my examination was to reconcile those differences. Where no difference existed, I did not go into an examination at all, because there was no necessity for it.

Q. In that examination, where you found a difference, for instance, take the year 1833, did you go to the records of the office and examine the warrants and each entry that entered into that year's debt statement to find whether the warrants and the books would agree?-A. No, sir. This statement is made by taking the receipts each year on account of the public debt, and adding the amount to the outstanding public debt for the previous year and deducting the payments made on the same account, the difference showing the outstanding public debt at the end of the year.

Q. What did you take these figures from?-A. Generally from the accounts as published and from the ledger accounts of the Register's of fice.

Q. Do I understand correctly that in this examination which you personally made you did not examine any of the warrants or issues of bonds or redeemed bonds, but took the printed statements and occasionally referred to the ledgers?—A. I took the amount of money that was received into the Treasury each year on account of the public debt, that is, receipts from loans, and deducted from that the amount of money paid for redemptions of loans, that is the system on which the Secretary's statement is made out. Where there was any discrepancy between that and the published account of issues and redemptions, which is the Register's statement, I then examined into the discrepancy. I found no occasion to examine into the accounts except where they disagreed. Where it appeared that the Treasurer had not paid out as much money in one year as the Register's statement showed to have been redeemed of the public debt, I examined in each instancę to find the cause of the discrepancy. I examined down into the minutest detail of the whole transaction. Sometimes I would find a charge to one loan which belonged to another. That would cause in the accounts one to be as much in excess as the other would be deficient. I would examine into and see where mis-entries had been made in the accounts. In no other cases did I search down into the details.

By Mr. DAWES :

Q. Except where there was a discrepancy?-A. Except where there was some occasion for it.

By the CHAIRMAN :

Q. According to the statement before you, table F, every year, I believe from 1833 to 1870, differs; in no instance do the amounts agree in the statements of the Secretary and Register. That being so, to have gotten at the correct amounts, would you not have to examine every year and everything going to make up that year's work?-A. No, sir; because the rests at the end of the year are different under the two systems.

Q. Am I to understand from that that you have two systems by which you can bring out different results as to the total amount of the public debt?-A. We have different sets of books which at the same period do not show the same amounts outstanding on the loans at the same date Q. Had not these amounts stood and been accepted as correct by all concerned for thirty or forty years?-A: They had been taken as the outstanding amount of the principal of the public debt at the end of each year down to 1870.

Q. Do I understand that in 1870 you went back to 1833 and re-examined the debt statement for thirty-seven years, and changed each year as to the total amount?-A. Rather that the amounts were stated from 1835 or 1836 up to that period from a different set of books and in a different method.

Q. Take the year 1862; you find in round numbers the Secretary states the debt at $524,000,000; the Register states it in the same report at $514,000,000; making an increase of $10,000,000. Am I to understand that the $514,000,000 as it stood on the books from 1862 to 1870 was an error or was false?-A. The first statement by the Secretary's report shows $524,176,412.13 outstanding at the end of 1862. The Register's statement shows $514,211,371.92, or $9,965,040.21 less than the Secretary reports as outstanding, which difference, while I have not the means at hand to analyze it, arises from two causes

Q. I ask whether or not that was a false or erroneous statement?-A. It is correct from the standpoint that either is taken.

By Mr. DAWES :

Q. You mean according to the different methods of keeping the books-A. Yes, sir.

By the CHAIRMAN:

Q. Do I understand that from the books as kept now in the department you may make two or more statements?-A. Yes, sir; two or more statements may be made to-day. If you should inquire to-day of the Register how much is outstanding on the 4 per cent. loan, he would probably not come within twenty millions of as much as the Secretary. On account of the immense subscriptions coming in the Register has not had time to get them on his books.

Q. From the organization of the government down to 1870 were or were not the debt statements kept in the way the Register stated it in 1870-A. They were kept according to the issues and redemptions prior to 1870.

Q. And the examination that took place in 1870 changed the entire debt statement from 1833, and would have done it back to the organization of the government if you had gone back that far; is that so?A. It would have given different results at different periods in the same way that it gives different results from 1836 down.

By Mr. DAWES:

Q. If it was all stated from one set of books it would have been uni