Q. And would not go to the Treasurer to see if he had money for it in the Treasury? A. It would not go to the Treasurer. Q. If the Treasurer issues a certificate for a one thousand dollar bond, is there anything to prevent an order for two thousand dollars of bonds being sent to the Register's office from your office? A. Only our checks. Q. Your integrity? A. Yes, sir. Q. I am putting that out of the question all the time. If such a bond was issued, that two thousand dollar bond would come back to your oflice. What would you do with? A. The initials of the clerk having charge of the loan would be put upon it, and it would be sealed. Q. But the Treasurer himself would know nothing of it? A. No, sir. Q. Do you keep an account in your office of accrued interest on bonds when they are issued? A. We keep an account of it as furnished by the certificate of deposit. Q. To make plain, if I were to ask you to-day to furnish me a list of accrued interest upon bonds sold since 1864, or any other time, could you do it? A. I could not. Q. It is not kept in your office in such a way that you could? A. No, sir. And Treasurer Gilfillan testifies (see testimony, pp. 106 and 107): * * * Q. How do you know that a bond is issued for the same amount that you gave a certificate for? A. I have not any knowledge of the transaction after having given the receipt. Q. If A applies for a $1,000 bond and pays you the principal and accrued interest, you give him a receipt for that $1,000. That then goes to the Loan Division of the Secretary's office, as I understand, and the Loan Division issues an order to the Register to issue the bond? A. Yes, sir. Q. The Register issues the bond, and does what with it? A. Transmits it usually to the subscriber, to the depositor. By Mr. DAWES: Q. Before he does that, does he not send it to the Secretary? A. This present loan, as I understand, goes back to the Loan Division of the Secretary's office. A part of the process is then completed: I think putting on the seal and an initial. By the CHAIRMAN: That is the same office that gave the order for the bond? A. Yes, sir. Whether they send the bonds or not I am not certain. Q. Is there anything other than the integrity of the officer to prevent the Loan Division, if it receives a certificate from you of $1,000, directing the Register to issue a bond of $2,000? A. I do not know that there is, of my own knowledge. Q. Is there any check upon the Loan Division from making an order upon the Register to issue to A a bond of any given amount? A. Not that I am aware of. Q. How long has the present system of issuing bonds been in practice? A. I think ever since there has been a Loan Division. I know it was so in Mr. Boutwell's time. Thus it will be seen the Chief of the Warrant Division, the Chief of the Loan Division, and the Treasurer of the United States all say that there is no check upon the Loan Division in issuing bonds, and that upon the integrity of one man in the Loan Division may depend whether or not the bonded debt of the government is as reported. WHO KNOWS HOW MANY LEGAL TENDER NOTES ARE IN CIRCULATION. It is quite the same with regard to the issue of legal tender notes. In regard to the issue of legal tender notes, Major Power testifies (see testimony pp. 92 and 93): 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. 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 facsimile 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? A. There is no other check upon the immediate issue of these notes. Q. They do not pass through the Register's office until thay 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 the same as to deliver 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. This shows that the Register's name is on a legal tender notes, that he does not see them until they are redeemed, and that there is not a proper check on the Treasurer or Bureau of Printing in this regard, so that the Chief of the Bureau of Printing or the Treasurer, if dishonest, could put notes improperly in circulation. INTEREST PAID WITHOUT KNOWING THE AMOUNT OF BONDS OUTSTANDING. Nor is there anything more satisfactory with regard to the statement of moncy received for bonds, principal and interest together. According to the following testimony the Treasurer pays the interest on the bonds, but he cannot give the amount of bonds outstanding. AMOUNT OF INTEREST ON BONDS. James Gilfillan, Treasurer of the United States, testifies (see testimony, pp. 104 and 105): By the CHAIRMAN : Q. To put it practically, if you were asked to-day to furnish this committee with the total amount of interest and principal received last year in bonds which were sold, could you furnish it? A. Not from the books, my impression is, without going through and taking the warrants and separating them. Q. You understand that when the entry is made upon the books it is made in gross and not separate entries, one of principal and the other of interest? A. Yes, sir. The items of receipts are internal revenue, lands, war, and navy (which are repayments), and miscellaneous. The miscellaneons includes the public debt and other receipts except those before named, which would include princ' pal and interest. Ithink that was what you requested of me in my statement. Q. Which you said you could not furnish? A. Yes, sir. It was said it could not be furnished as the books had been kept from 1861. Q. No separate account on the books was kept of principal and interest? A. Of the receipts, no, sir. Q. Can your office give the exact amounts of bonds now in circulation? A. A. No, sir. Q. Then you might, so far as your office is concerned, pay coupons of duplicate numbers, or a greater amount of coupons than were out? A. If they were genuine coupons. Q. How would you know whether they were genuine or counterfeit-on the same principle that you know whether a note is a counterfeit or not? A. Exactly. Q. But you have no means of knowing whether a bond has been fraudulently or illegally or wrongfully gotten into circulation or not? A. Unless in the case of registered bonds, which are caveated, and we might have been notified; but we never should be notified of that, because it is not necessary. This shows that the Treasurer keeps the moneys received for bonds, principal and interest together, and that he cannot tell from the books how much was received for principal and how much for accrued interest for a given time; that is, accrued interest on bonds sold is not kept as a separate account. The treasurer pays interest on bonds, but he cannot give the amount of bonds outstanding. The treasurer pays all coupons presented, if genuine, but he does not know whether or not duplicates are paid by him or by the sub-Treasurers elsewhere. After the foregoing statement of extraordinary discrepancies and differences of debt statements, of unlawful changes in the increase and decrease of debt, and the showing of looseness of administration, of absence of checks in the issue of bonds and legal tender notes, by which the Government is protected only by the integrity of only a single clerk, and of the singular want of knowledge the Treasurer has of the amount of outstanding bonds on which he pays interest, the reader may be well prepared for the following statement of erasures and changes in the books of the Treasury. APPARENT ERASURES AND CHANGES IN THE BOOKS OF THE TREASURY. On the question of erasures and apparent changes in the books of the Treasury is the following testimony of Mr. Woodville (see testimony, pp. 110, 111, 112 and 113): WILLIAM WOODVILLE recalled. By the CHAIRMAN : Question. By whom was the statement that I hand you prepared? (Exhibiting.)-Answer. Prepared by Mr. Byrne, formerly clerk of this committee. Q. Have you examined it by the books so as to be able yourself to testify to it? A. Yes, sir; I can testify to this statement. I went over it with him and checked it off with him from the other book. Q. Have you recently re-examined it ?-A. Yes, sir; I have refreshed my memory about it to-day. Q. Is it correct?-A. It is correct, with the exception of a few memoranda which are marked there; two exceptions which I have specified on it. The CHAIRMAN. I offer that in evidence, as having been the result of the work of Messrs. Woodville and Byrne together, and want it to go in. Memorandum of erasures, alterations, and changes found in “Register of Public Debt Warrants' from January 1, 1865, to December 31, 1869. Secretary of the Treasury. Sept. 21 .....do... Oct. 17 Scratched. Marked in margin "(Directed same to issue on .do.. Dec. 2 1051 Amount erased with lines; canceled.. 1,031 83 401,000 00 340,500 00 350 00 24,069,000 00 356,400 00 128,000 00 $2,000,000 00 14,977 42 28,283,850 00 200,000 00 5 00 23,735,382 50 3,045,000 00 37,661 50 1,233,791 98 20,824,402 08 Sept. 30 176 21,314,102 68 186 .do.. 5,630,541 84 Amount altered and scratched; premium on sinking- 311,945 10 Amount altered and scratched; redemption of the 7,265,416 00 In the month of November, 1869, the amounts ROOM 65 TREASURY BUILDING, COMMITTEE ON TREASURY ACCOUNTS, Washington, D. C., November 22, 1878. SENATOR: I make, at your request, a copy from my "memorandum book of alterations and erasures," from a book called "Register of Public Debt Warrants." In my examination of the books furnished the committee by the Secretary of the Treasury, I have thus far noted 1,120 alterations and changes in the 39 books I have examined. Most respectfully, your obedient servant, Hon. H. G. DAVIS, Chairman, &c. EDWD. BYRNE. Q. Have you made examinations of different books in the Secretary's, the Register's and the Treasurer's office ?-A. My examination was particularly in the Register's and Treasurer's books, and the public debt of the Secretary from 1860 to 1871, inclusive. Q. Did you find upon those books alterations or errors or erasures in figures ? -A. Yes, sir; I found alterations, scratches, canceled warrants. Q. To what extent ?-A. In the Treasurer's books from 1860 to 1867, inclusive, the alterations, scratches, and canceled warrants amounted to about twelve hundred in round numbers. Q. Twelve hundred different alterations?-A. Alterations, scratches, and canceled warrants, anything like a change from the original amount. |