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bond being issued. There would have to be collusion' to falsify the record.

Q. All in the same office ?-A. Yes.

Q. An order comes from the Treasurer's office to the Loan Branch of the Secretary's office to issue a bond for $1,000; the Loan Division di. rects a $2,000 bond to be issued instead of $1,000 bond, which the Treasurer directed to be ordered. That order goes to the Register, I understand. The Register issues a $2,000 bond, and it comes back to the same office that ordered it for the seal; that office puts the seal on it and the bond then goes back to the Register for delivery ?--A. That is the practice.

Q. Then there is no check outside of that particular office as to whether or not the bond was a $1,000 or a $2,000 bond 1-A, I believe not.

Q. Now, suppose an order is given from that office-I understand it would be forgery-an order from the Loan Branch to the Register to issue a $1,000 bond for which no money had ever come into the Treasury, but it was a forged order. The Register issues the bond and it comes back to the same office for the seal, and is delivered to whoever is named in the bond ; is that the case or not I-A. It is.

Q. Then I understand, from the manner of issuing bonds in the department, that there is no check outside of the Loan Branch; that is, it does not go back to the Treasurer for him to see whether or not the money deposited and the amount of the bond agree !-A. No; it does

not.

Q. How long has the present system of issuing bonds been in existence-A. I cannot say how long; probably not longer than since 1869 or 1870; but I should like to add that I think most of the bonds issued before that were issued upon the authority of the certificate of deposit itself, or at least the certificate of deposit accompanied the order of the Secretary to the Register prior to that time.

Q. Was there any check then upon the Register if a certificate of deposit accompanied the order to the Register, and then the Register issued the bond ?-A. The Register issued the bond, and he had the certificate of deposit, and if that certificate of deposit was genuine of course it would be a sufficient check against fraud.

Q. Did the Register then deliver the bond to the owner ?-A. Yes, sir.

Q. Previous to that, then, tiere was no check upon the Register's office if he issued a larger bond than the certificate called for, or issued a bond without a certificate at all ?-A. I think there was a check on the Register in the Secretary's Loan Division during the issues of the war; but in that matter I cannot speak positively.

Q. In what way?-A. I think that the registration of the bonds was kept also in the Secretary's office during the war the same as now.

Q. The order went through the Secretary's office, of course, but did the bond, after being ready for delivery, come back to the Secretary's office !-A. I think so in all cases.

Q. Are you sure of that !-A. I am not certain.

Q. Could you ascertain and let us know whether or not there is a record in the Secretary's office of the bonds issued between 1860 and 18701-A. Yes, sir; I am positive that there is a record of the loans issued in that period.

Q. A record, I mean, after they were completed !-A. As to whether each particular bond was then sent back to be sealed as now I do not know.

Q. The check, then, was in the Secretary's office instead of in the Loan Branch ?-A. It is in the same office.

Q. In your experience and judgment would it not be a decided improvement and an additional check of great value if the bond went back to the Treasurer for his verification or signature in some form before it was delivered to the owner -A. Do you mean to have the order of the Secretary countersigned or checked by the Treasurer before reaching the Register?

Q. No, sir; but after the bond has been issued by the Register, if it went back to the Treasurer to see whether the bond corresponded with the amount of money covered into the Treasury and the order given for the bond ? In other words, to let the Treasurer deliver the bond instead of the Register, he having received the money first!-A. It would add to the security in the case cited before by you. It would be a check on any such attempt to defraud, but I do not see any necessity for the bond going to the Treasurer to be delivered, as the same thing would be effected in the system as now applied to public deposits of money, in which, before money is covered into the Treasury, the certificates are always sent to the Treasurer to see whether they agree with his entries. The same system applied to the bonds issued would require the Treasurer to check the order to the Register to issue bonds.

By Mr. DAWES: Q. Then you would leave the Register at liberty, if he wanted to commit a fraud, to make a bonci larger than the order?-A. The check on him would be the Secretary's order as at present. He could not get the seal on the bond without sending it back to the Secretary's Loan Branch.

By the CHAIRMAN: Q. Then one of the systems that you or I have named would be of great advantage in preventing a fraudulent 'issue of bonds?-A. It would.

Q. As I understand the present system, if the Loan Branch of the Secretary's office were to originate or increase an order for a bond, there would be no check except from that office upon it?-A. There would not.

Q. Now, as to the accrued interest upon a bond when thus purchased, how is that account kept, and is it kept separately from the amount received for the bond as principal !-A. It is kept separate in this way: A subscriber to a loan deposits the amount of the face value of the bond and the accrued interest. The certificate of deposit shows the total amount of both. That being sent to the Secretary, on which the bond is issued, the warrant covers the amount into the Treasury on that certificate and charges it to the Treasurer. The Treasurer reports the amount of the subscription to the Secretary's office to the Division of Public Moneys, where it is checked with the certificate of deposit.

By Mr. DAWES: Q. Does he report it in two items, so much principal and so much interest?-A. He reports it in two items, anci the report must compare with the certificate of deposit that comes from the subscriber,

Q. And that comes in two items!-A. Yes, sir; that is shown on the face of the certificate.

By the CHAIRMAN: Q. That being so, ought not the Treasurer to be able to give us a statement of the amount of principal and interest, separately, that he has received for any given year?-A. He should be able to do so as far as the subscriptions have been made with him.

Q. If they are made with anybody else, he would know? It all has to pass through his office !-A. It passes through his office, comes to him on a covering-in warrant. It might be very inconvenient to him to furnish a statement of that kind for many years back.

Q. If the interest account was kept separate from the principal account, it would be a very easy matter to run it up and say how much it amounted to, would it not !-A. Not being familiar with his manner of bookkeeping, I cannot answer.

Q. Do you know whether or not there are scratches, changes, or alterations, whatever you choose to call them, upon the books of the department; take the Secretary's office?-A. Scratches and mis-entries occur, I believe, in all systems of accounts, and the Secretary's office of the Treasury Department is no exception to that. A clerk may make a misentry at any time.

Q. Is that likely to follow from the day-book or journal into the ledger?-A. It would be in the journal or register.

Q. But it ought not be in the lediger?-1. Vo scratches or mis-entries should occur in the ledger.

Q. You keep what is known as a register or journal, and post from that into the ledger, do you not :-A. Yes, sir.

Q. And while scratches might appear upon what is ordinarily known as the day-book in business transactions, they ought not to appear to any extent in the ledger?-A. They ought not in the ledger, but sometimes scratches and changes in an entry appear for a reason that is altogether beyond the control of the clerk at the time it is made, as in this case: A warrant is issued and goes to the Comptroller, but for some reason he refuses to pass the warrant. That warrant has to be taken off the Secretary's books; and as frequently as such a case occurs, so frequently would a change be made in the books.

Q. In that case would it be a counter entry, or would it be just a scratch, a pen run across the entry ?-A. A pen would be run across.

Q. But the figures ought not be scratched and new figures put in ?A. Different bookkeepers have different ways of correcting an entry.

Q. But if the warrant was rejected it would not be a warrant any longer and would have to be erased entirely, would it not ?-A. Another one would probably be put in its place under the same number.

Q. But that would not be in the same man's name?-A. The name would also be scratched out.

Q. Is an account kept from which you could conveniently inform the committee of the amount of property sold by the War and Navy Departments from 1865 to 1868 ?-A. There is not, as prior to the passage of the act of July 15, 1870, the proceeds of sales were covered back to the credit of the appropriation that purchased the property, and, therefore, our Treasury accounts only show the amount of repayments back to the credit of the appropriations. Since that act such money is all covered into the Treasury and reported to Congress each year, in the estimates, as required by law.

Q. Previous to 1870 the property sold by the Navy and War Depart. ments was credited to their appropriations and used by them. Could it be conveniently ascertained how much that was 1-A. It would be impracticable to separate on our books that class of repayments from ordinary repayments of disbursing officers returning money to the Treasury. A careful report has been made by the War Departinent on that subject a number of years ago, and published in Senate Rept. Com. No. 183, second session Forty-second Congress. ¿ Q. As to the amount paid on account of the Freedman's Bureau, is that kept separate and distinct back to 1865 1-A. Do you mean the amount appropriated for the Freedman's Bureau ?

Q. The amounts paid on account of the Freedman's Bureau. The appropriations we can get, of course, but the amount paid from any source on account of the Freedman's Bureau !-A. There is no account on the books except under appropriations.

Q. The only accounts you would have of that would be the amounts appropriated by Congress ?-A. Appropriated by Congress.

Q. How is the account of legal tender notes and of fractional currency kept ?-A. Legal-tender notes and fractional currency, when prepared in the Printing Division, are turned over to the Treasurer of the United States, where they are kept in his reserve vault and in the reserve account from which issues are made from time to time to replace the amounts redeemed, and the amount so issued from that vault is charged to the Treasurer by a warrant covering that amount into the Treasury. The receipts on account of that loan (as we treat all Treasury notes as loans) are received into the Treasury as an issue, and his redemptions for the same month are reimbursed to him. He gets his credit for his redemptions on his report, sending with it to the Register's office onehalt the note and to the Secretary's office the other half, where his reports are verified by actual count. There is a separate counting in each office, and when found to agree a certificate for the amount is signed by a committee who witness the destruction of the notes. The Treasurer returns the certificate as his voucher for so much money expended on that account, which passes through the accounting officers. This is exceptional, as the magnitude of the issues and redemptions on these accounts renders it impracticable to treat each note as a separate voucher.

Q. The Register's name is on the notes, I believe?-A. Yes, sir.

Q. Does the Register ever see the notes ?-A. Not until they are redeemed.

Q. Then a note issued, though it is signed by the Register, never passes through the Register's office !-A. That is, the notes bear the fac simile of the Register's signature.

Q. I understand that the Superintendent of the Printing Bureau delivers to the Treasurer direct the notes, legal-tenders or fractional currency when the latter was in existence. Do they pass through any other hands but those two ?-A. They do not.

Q. They are ready for circulation when the Treasurer receives them from the Printing Bureau ?-A. They are then ready for circulation.

Q. They are ready ?-A. Yes; but they cannot be put into circulation legally until the Treasurer covers the amount into the Treasury; they are not money in the Treasury until covered in.

Q. Still they are in his possession and no one else has possession of them but the Treasurer, and he could, if he was dishonest, put them in circulation without making any further report about the matter I-A. There is no other check upon the immediate issue of these notes.

Q. They do not pass through the Register's office until they are redeemed and ready for destruction ?-A. No, sir.

Q. Then are they registered in the Register's office, all that have been destroyed ?-A. They are.

Q. And also in the Secretary's office ?-A. Yes, sir. F Q. Are they destroyed in the presence of witnesses ?-A. They are destroyed in the presence of a committee composed of one froin the Secretary's office, one from the Rezister's office, and one from the Treasurer's office.

Q. In your judgment is the check upon the destruction perfect, or not ?-A. The system as now adopted appears to apply all the checks possible to the redemption of these notes.

Q. How long has the present system been in operation ?-A. Since the issue of the legal tenders, the law providing for the manner of destruction.

Q. And the same as to delivery from the Printing Bureau to the Treasurer has been in existence since the act creating the two classes of notes, the legal tenders and fractional currency ?-A. Yes, sir.

Q. And they pass through no other hands, I understand, as a check ?A. No, sir.

Q. If the Register and Secretary, in their tabulated statements of the debt in the Finance Report, and the monthly debt statements, do not agree at the same date, does that show that two or more statements may be made from the same books and yet all be correct?-A. From the same department and be correct.

Q. What do you mean by 6 department”?-A. From the same department, from different sets of books.

Q. Then, as the books are kept, two or more statements may be made and the aggregate of the public debt appear differently, and yet they all be correct !-A. Yes.

Q. Do you know of any authority of law that permits the Secretary to direct the Register to make changes of past administrations in debt or expenditure?-A. I know of no authority of law that authorizes him to make corrections of the books.

Q. Do you know of any leaves of any of the books being cut out and gone ?-A. I do not.

Q. Do you know of any missing books in the Register's office said to have been stolen, or burned, or destroyed, in any way relating to the public debt 1-A. I know of no important books. It has been rumored in the Register's office that some aiuxiliary books were destroyed or burned by a messenger.

By Mr. DAWES: Q. When ?-A. During the administration of Mr. McCulloch ; but I never found any occasion to refer to any of those books in any of the examinations that I have ever made.

By Mr. INGALLS: Q. That is a tradition or rumor prevalent in the office, that such a destruction did, at some time, occur through the negligence or design of some subordinate -A. I believe it was a messenger who thought the books were of no value and destroyed them ; but there is no missing record of the Treasury proper, or books of the department, except from the casualties of the fires of 1812 and 1833. Now and then there is a missing book, and yet the link is complete in some other office. It may be wanting in one ottice, but it can be supplied from another.

By the CHAIRMAN:
Q. You know of no such case in your knowledge ?-A. I do not.

Q. I hand you a paper which I have not read myself, but I ask you to examine it and see whether it is correct.-A. (Examining) The paper handed me reads as follows:

It is claimed that the discrepancy in the Register's statement of the outstanding public debt of 1863 in Finance Report 1869, page 317, and Finance Report 1870, page 276, was caused by deducting the cash and sinking fund in the Treasury, less accrued

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