Q. Does the Register make up the statement of the debt?-A. I believe not. I believe last year he omitted it from his report, but within the last year he reports the aggregate of the public debt by simply adding the amount of his receipts to the amount outstanding of the year before and deducting the expenditures. In the Finance Report for the year 1876, on page 599, the Register reports the receipts from loans and Treasury notes as $404,375,368.90; and on page 603 he reports the expenditures on account of the public debt including interest. If the interest is deducted from that and the balance deducted from the other, it shows the increase or decrease of the debt for the year:

Q. I simply ask whether the debt, as it now appears on the 1st of July for the previous fiscal year, is made up in the Secretary's or the Register's office?-A. In the Secretary's office.

Q. Not in the Register's office?-A. Not in the Register's office.

Q. Was it made up in the Register's office previous to 1870?—A. I cannot say.

Q. You were in the Register's office; did you make up the publicdebt-statement?-A. I did not make up the public-debt statement at that time.

Q. Previous to 1870, was it made up in the Register's office?—A. I cannot say that it was altogether made up in the Register's office, as there are certain loans of which the accounts were kept by the Treasurer and some in the Secretary's office and the majority in the Register's office. The result of this was a comparison between the different offices. I understand the outstanding debt prior to 1870 to be a result of a comparison of the different accounts in the different offices.

Q. Made up in which office?-A. In the different offices. The Secretary made up a detailed table.

Q. Previous to 1870?—A. Previous to 1870; and he received his facts to make that table from the different offices.

Q. From the first days of the government, from the time of Alexander Hamilton, were the debt statements made up by Issues and Redemptions?-A. By Issues and Redemptions.

Q. From the days of Hamilton, as Secretary, down to Mr. Boutwell's administration, they were made up by Issues and Redemptions solely?— A. Yes, sir.

Q. All the Secretaries between Hamilton and Boutwell made them up by Issues and Redemptions, and there was no break in the form of making up those public-debt statements, was there?-A. I believe not; I believe they were uniformly made from Issues and Redemptions.

Q. In your judgment, which is the most proper way to keep the publicdebt statement, by Receipts and Expenditures or by Issues and Redemptions, taking in view such transactions as the Massachusetts payment, and the Eads payment for the jetties not long ago, where bonds were issued without any receipts going into the Treasury?—A. The most unreliable way of stating the public debt is by Receipts and Expenditures; the next more reliable way is by Issues and Redemptions; but the most reliable way, in my opinion, is, as it is now stated, by joining the two together, making one balance and check the other.

By Mr. DAWES :

Q. When was this last method adopted ?—A. The last method commenced in 1870, and is still continued.

By the CHAIRMAN:

Q. In your judgment, was there a necessity for going back for thirty or forty years (as was done in 1870) to get the items for stating the pub

lic debt in the way which you now think is the best way?-A. Yes; it could have commenced there, but not without going back and stating the account up to that date from some period when the public debt was commencing or where it could be determined with perfect accuracy. The statement, as furnished in the report of 1870, at page 24, is the approximation to that; that is, to furnish the basis for the commencement of this account in 1870.

Q. Now explain why you could not have assumed that the debt was a given amount in 1870 and commenced your system from there? In other words, why you could not have taken what the debt appeared to be at that day and commenced your new system?-A. The difficulty would be to tell what that day was when the two accounts could be brought together.

Q. Could you not have taken the year 1869 or 1870 as the basis and started from that, as well as to have gone back to 1833 and started from there?-A. The difficulty is to find a starting point at which both accounts would perfectly reconcile, and, considering the magnitude of this public debt account in 1870, it was simply impossible to determine that without making this examination from the commencement of each loan. Then in 1836 the accountants assumed from the best information at hand an amount with which they commenced, and to make that as small as possible they commenced in that year, noted in history as being the period when there was comparatively no public debt.

Q. Look at the report of 1871, at page 20, and state what the total receipts of the government up to June 20, 1871, were?-A. The total receipts. received into the Treasury on account of loans were $7,094,541,041.38. Q. The net expenditures?-A. $4,857,434,540.51, leaving a balance of $2,237,106,500.87.

Q. State what the difference is between that and the actual amount of the public debt at that time?-A. The actual public debt was $2,253,211,332.32.

Q. What is the difference between the actual debt and what it would appear to be on the basis of Receipts and Expenditures?-A. $116,104,831.45.

Q. If Receipts and Expenditures were the true way to keep the public debt, ought not the difference between Receipts and Expenditures to have shown the actual amount of the public debt?-A. It should have shown the actual amount of the public debt plus the amount of loans or bonds issued for which no receipts came into the Treasury.

Q. You have said that it does not state the true amount of the public debt by $116,000,000, in round numbers. What is the reason why it does not show the true amount?-A. On account of the loans that were issued and redeemed afterwards, for which no receipts came into the Treasury, and various items of discounts, premiums, and interest charged as principal.

Q. If that be so, Receipts and Expenditures alone would not show the actual public debt?-A. Not unless you add these items for which no receipts were received.

Q. How could you add them? In whose discretion could that be left; and why could not the man making up the debt, if he added one million, add two millions, if necessary?-A. The law must authorize the issue, and, like an appropriation, we take it as authority for an issue of bonds to the extent of the loan.

Q. The issue of bonds is not the question; it is keeping the debt now by Receipts and Expenditures. The law might authorize $5,000,000 of bonds to be issued and only $2,000,000 be issued; therefore you can

not take the law always.-A. The present system, adopted in 1870, would require the accounting officers to state an account for the amount authorized by the law, which would pass into the Treasury as a receipt and be credited to the loan as a subscription.

Q. But that is assuming something; that is giving the accounting officers a discretion to assume. If Receipts and Expenditures were the true way to keep the public debt, why would not this statement show the true amount of the public debt?-A. Referring to my former answer, this is an evidence of the fact I stated, that keeping the accounts by Receipts and Expenditures only is the most unreliable form, and that by Issues and Redemptions the better; but to join the two together, so that one will correct and check the other, is the best system.

Q. By Receipts and Expenditures there are $116,000,000, in round numbers, unaccounted for, according to this report. There is the Revolutionary debt, estimated at $76,000,000, in round numbers. Could not that estimate have been $86,000,000 as well as $76,000,000?—A. That amount put in there as "estimated" is the amount which the present government assumed from the old government, $76,000,000.

Mr. DAWES. Does the chairman mean by that question to inquire the data on which that estimate was made?

The CHAIRMAN. Certainly.

Mr. DAWES. If the witness knows what were the data I should like to ascertain them.

The WITNESS. It is a historical fact, and I believe the public accounts have heretofore fixed that sum uniformly at $76,000,000. It was an assumed amount, and until the whole debt was paid it could never be determined how much was outstanding of these loans.

By the CHAIRMAN:

Q. Then you speak of Mississippi stock, the Louisiana purchase, Washington and Georgetown debt, United States Bank stock, six per cent. Navy stock, Texas purchase, Mexican indemnity, and then add:

In addition to the foregoing, the following amount is to be added, being composed of discounts suffered in placing loans, interest paid and erroneously charged as principal, and various errors in settling and stating loan accounts. All of these latter and the Revolutionary debt are now being investigated and will be explained in a future report in detail.

That amount is $10,057,406.41, unexplained in any way except in the way I have designated. The changes of figures we have referred to in the debt statement took place in 1870. This report is that of 1871, which says that examinations are yet to take place to explain over $10,000,000. Is it not a little singular that these changes, amounting to cents as well as many dollars, should have taken place a year before this examination was concluded, by which ten million was unaccounted for?

A. That ten million referred to there relates to discrepancies prior to 1836 in all cases; and in the Finance Reports of 1876, on page 18, a thorough examination brings it down to a discrepancy of $942,433.83 "as unenumerated items, consisting of premiums and discount, interest, commissions, brokerage, &c., the full details of which can only be given when the examination of the accounts of the domestic debt of the Revolution is completed."

The final result of the examination, as it now stands, is shown on page 18 of this report. It has all been explained except that $942,433.83, and the examination has not been brought further than that. The clerks have all been taken off this examination, as the reduction of force in the department does not enable us to continue the examination. We have but 6 TREAS

one clerk who is on all this general detail of statement, and there has been nothing done on it for two years; but I would state that it may be found that some of these accounts have been destroyed in the fire of 1812 and subsequent casualties, by which the accounts of the department have suffered, but even to the very penny it is capable of explanation with that exception. What makes it so very difficult to explain some of these earlier loans is that on the first loan of the government, which took up the old debt and issued stock for two-thirds the amount of the debt at six per cent. and the other third deferred to 1808, the payment of interest was applied to the interest accrued and indents of interest were issued. The law authorizing the redemption of that, according to my recollection, provided for redeeming it in this way: Eight per cent. of the debt was redeemed every year. What was interest was first to be paid out of the eight per cent. and the balance to go to reduction of the principal, and thus it makes one of the most complicated accounts possible, and it would take years of examination to get out that single account itself to determine what was interest and what was princtpal.

By Mr. DAWES :

Q. How old is the transaction?-A. The first loan of 1792.

WASHINGTON, April 5, 1879.

JOSEPH T. POWER'S examination continued.

By the CHAIRMAN:

Q. Resuming from yesterday, I wish to say that we desire to get along as rapidly as possible with the testimony and do justice to all. Yesterday we wandered to some extent. I will thank you to-day to come as near as you can, with justice to yourself and the questions you are answering, to categorical answers. Whenever a categorical response will answer the purpose of yourself, I trust you will answer in that way. You stated yesterday that the debt tabulated statement which appears in the Finance Report of 1870 from the Register and the Secretary was each correct but stated from different data, though there were many millions difference in some of the years. Did I understand you correctly in that respect?-A. The answer was that both statements are correct from the basis on which they are made up.

Q. You are aware that they differ in the neighborhood of $100,000,000 some years?-A. I would add that I am aware that they differ a hundred millions some years, which difference inight occur all within a few. days.

Q. Could other statements be made from the same books and still be correct, though they differed in the total amounts?-A. It depends altogether on the class of statements and what they include. If they include the same items, and are brought within the same dates, they will agree. If they do not include the same items, and are not brought within the same dates, they cannot agree.

Q. The question is, ought a statement made by Receipts and Expenditures and one made by Issues and Redemptions to agree, or not?—A. When brought upon the same basis they will agree; but these do not agree at the same date.

Q. Does the monthly debt statement at the same date agree with either the Register or Secretary?-A. The monthly debt statement of July 1, 1869, shows the outstanding principal of the public debt to be

$2,597,722,983.37, and the Register's report for the same year shows the outstanding debt to be $2,489,002,480.58, which is the same, with the exception that the Register states his including accrued interest and less the cash in the Treasury, which is $156,000,000

Q. My question was simply as to the fact ?-A. They do not agree. Q. The fact is that the Secretary's statement, the Register's statement, and the monthly debt statement of that date disagree?-A. They all three disagree.

Q. Then of the three statements made at the same date no two of them are exactly alike ?-A. They are made for different purposes and include different items.

Q. The question is, is either of these three statements giving the gross amount of the debt alike in amount?—A. They are alike in amount for the items they cover. The total as furnished is different. If I say yes or no to these questions, I may give a wrong impression.

Q. Do these statements agree in amount as published and given to the country?-A. One of them is one thing and one is another thing.

Q. The question is whether they agree with one another, or not ?—A. Then I want to change my answer and say that the monthly debt statement of July 1, 1869, agrees with the Register's report and not with the Secretary's report.

Q. There are three statements made for the same date, two by the Secretary and one by the Register, all of which differ as to the gross amount of the public debt. Is that so, or not?-A. The principal of the public debt?

Q. The gross amount of what is known as the public debt, what is known by the country as the public debt?-A. The Register's statement agrees with the monthly debt statement, and the Secretary's in his annual report disagrees in some respects.

Q. Then the Secretary in his annual report disagrees with himself in the monthly statement for the same date?-A. He does.

Q. To what extent in figures?-A. The Secretary in his annual report for 1870 states the outstanding principal of the public debt at $2,588,452,313.94, June 30, 1869. The monthly debt statement was $2,597,722,983.37.

Q. What is the difference in round numbers?-A. A little over $9,000,000.

Q. You will notice in the statement before you, now in evidence, marked "F," that there was $99,000,000 increase in 1869 and $94,000,000 in 1870. Will you explain as briefly as you can what makes that great difference, what it is made up of generally?-A. It is made up of the cash in the Treasury, less accrued interest, less sinking fund, together with other minor differences of small amounts.

Q. Is that the explanation of both years?-A. In the year 1870 the sinking-fund is not an element of difference. The difference is merely occasioned by the cash in the Treasury, less accrued interest, with these small minor differences in the adjustment of the accounts.

Q. Cannot a correct debt statement be made from Issues and Redemptions exclusively for the years 1860 to 1870, inclusive?-A. A correct statement of all Issues and Redemptions can be made, no doubt, between those two periods by accurate and careful accountants.

Q. Could a correct statement of the public debt be made up for each year, beginning with the organization of the government and coming down to 1870, from the Issues and Redemptions alone?-A. Yes, sir. Q. If the debt was kept by Receipts and Expenditures alone, how could you manage with such items as the Revolutionary debt, Mississippi,