has been referred to this office for consideration and decision, relates to the question of taxing as a scrip dividend the sum of $23,036,000, the same representing the issue by the company on the 19th December, 1868, of interest certificates to the amount of eighty per cent. of its capital stock. The proceedings of this office with reference to assessing and collecting a tax of 5 per cent. upon said eighty per cent. scrip issue have been as follows: On the 17th June, 1869, this office directed Supervisor Smythe, of the northern district of New York, to investigate the affairs of the New York Central Railroad Company, with special reference to its liability to tax upon the aforesaid issue of scrip. On the 16th February, 1870, in view of the evidence presented by Mr. Smythe, Supervisor O'Donnell (his successor) was instructed to cause an immediate assessment of a tax of 5 per cent. upon said scrip; March 5, 1870, an assessment of $1,151,800, the same representing a tax of 5 per cent. upon $23,036,000, was made against this company, and the list containing said assessment passed to Collector Baily, of the 14th district of New York. This assessment was ordered at the time in order to save the Government from being barred from the assessment of a tax under the fifteen months' limitation, contained in section 20, act June 30, 1864, as amended by section 9, act July 13, 1866, and to enable the question of liability to be determined upon a claim for abatement, or refunding, as the case might be. The tax has not yet been collected. Collection has been suspended at three different times, once by telegram, dated March 26, 1870, again by letter, dated April 9, 1870. The last suspension was ordered on the 22d November, when the collection was staid until January 2, 1871. These suspensions have been ordered at the urgent request of the president, C. Vanderbilt, esq., and others, in behalf of the company, in order that they might, as they claimed, have ample opportunity to collect and forward evidence in behalf of the company. It is proper to add that the seeming delay on the part of this office in deciding to collect said tax has arisen from what it conceived to be not only the desirableness but the necessity of having all the statements of the company in its own behalf, before determining so important a question, and from the repeated delays of the company in furnishing such statements. The resolution is herewith returned in accordance with your request. Very respectfully, J. W. DOUGLAS, Secretary of the Treasury. Hon. GEO. S. BOUTWELL, 3d Session. No. 10. LETTER Ꭺ Ꭱ OF THE SECRETARY OF WAR, COMMUNICATING, In compliance with the resolution of the Senate of the 14th of December, 1870, information relative to an alleged unlawful traffic with rebels in the State of Texas during the late war, entered into by Harris Hoyt, Byron Sprague, and others. JANUARY 4, 1871.-Referred to a select committee of five, consisting of Mr. Thurman, Mr. Hamlin. Mr. Trumbull, Mr. Howe, and Mr. Willey, and ordered to be printed. WAR DEPARTMENT, The Secretary of War has the honor to submit to the Senate of the United States, in answer to the resolution of December 14, 1870, a copy of a report of the Judge Advocate General, dated June 15, 1865, relative to an alleged unlawful traffic with rebels in the State of Texas during the late war, entered into by Harris Hoyt, William Sprague, a Senator of the United States, Byron Sprague, William H. Reynolds, and others, and to state that neither the papers therein referred to, nor any record of them, can now be found in the War Department. It is, however, possible that certain of them may be on file at the Headquarters of the Department of the East, New York City, and search for them will accordingly be made and the result thereof hereafter reported. WM. W. BELKNAP, WAR DEPARTMENT, BUREAU OF MILITARY JUSTICE, The following report is respectfully submitted respecting the case of illicit trade to Texas implicating Hoyt, Sprague, and others, brought to the notice of the Department by Major General Dix. The papers herewith, consisting of an abstract of statements of Byron Sprague and others, prepared by Major Bolles; letters of William Sprague to General Dix; papers found upon Hoyt, and the latter's confidential statement, (which, it is stated, is only to be used in case Hoyt is made a witness for the Government,) have all been examined, and show in substance that Hoyt, residing in Texas at the breaking out of the rebellion, made his way North, where in the fall of 1862 he effected an engagement with William Sprague for undertaking an enterprise to get cotton out of Texas. Four firms took an interest in the venture, Sprague & Co., Reynolds & Co., Taft & Co., and Knight & Co., all of Providence, Rhode Island, each furnishing $25,000. Vessels were purchased, loaded with cargoes of machinery, arms, &c., &c., cleared for foreign ports, and run to Texas, sometimes under a changed flag; Hoyt proceeding thither upon one of them, carrying letters of introduction from Governor Sprague, commending him to General Butler and Admiral Farragut. The papers inclosed do not give an entirely clear account of subsequent operations, and some of the evidence taken does not seem to have been forwarded. It is unnecessary, however, in this report to go into all the details. It is sufficient to remark that the cargoes of goods were sold in Texas and the proceeds invested in cotton, a part of which appears to have been gotten out, while some portions were seized by our blockading cruisers. William Sprague has written several letters to General Dix in regard to the case, in none of which does he admit, and in one of which he denies, a knowledge of Hoyt, and of the details of the operation, such as is indicated by letters from him found on Hoyt, who expressly declares William Sprague to have been cognizant of the progress of the business, and to have advised and aided it to the utmost of his power. It is stated by William Sprague that the object was to aid Union citizens in Texas, and obtain information for the Government; but no one else connected with the venture seems to have viewed it in that light; and Byron Sprague, his partner, who, as William Sprague avers, had special charge of the speculation, plainly describes it as undertaken to get out cotton. Major General Dix, in a letter to the Secretary of War, dated March 23, says: The parties who furnished the capital, knowing how it was to be employed, were Messrs. William Sprague, United States Senator, Byron Sprague, his brother, and William H. Reynolds & Co. These gentlemen were all engaged in business in Providence, Rhode Island, where the enterprises were fitted out. Messrs. B. B. & R. Knight and Messrs. Oway, Taft & Co., of Providence, also furnished a part of the capital, but it is not clear that they were fully advised of the manner in which it was to be used. The high social standing of these gentlemen makes the case one of great delicacy, and I regard it also as a question of importance whether the proceedings against them should be by a military commission or in a civil court; whether the facts charged, if true, constitute a mere violation of the laws of war, or a higher crime under the Constitution of the United States. There are at least two witnesses to the fact of illicit trade, and ample written proof. Harris Hoyt and Charles L. Prescott, who were parties in interest, are willing to testify to all the facts in the case, provided their doing so shall not insure their own conviction. It appears that among the articles purchased in New York to be taken to Texas were some arms and ammunition, and on the invoice of cargo with which Hoyt proceeded from Havana to Matamoras were thousands of cartridges and percussion caps. From an examination of all the papers, this Bureau is of the opinion that the parties who were engaged in this unlawful traffic may be brought to trial before a general court-martial, under the 56th Article of War, for relieving the enemy with money and ammunition, or by military commission for violating the laws of war in trading and holding intercourse with the enemy. It is for the Secretary of War to declare whether, in view of all the circumstances and of the present condition of affairs, their trial shall be ordered. The SECRETARY OF WAR. Official copy: J. HOLT, Judge Advocate General. J. HOLT, Judge Advocate General. In compliance with the resolution of the Senate of 14th of December, 1870, further information in relation to an alleged unlawful traffic on the part of Messrs. Hoyt, Sprague, and others with insurgents in the State of Texas during the late war. JANUARY 9, 1871.-Referred to the select committee of five to investigate the alleged unlawful traffic with rebels in the State of Texas, and ordered to be printed. WAR DEPARTMENT, January 9, 1871. The Secretary of War has the honor to submit to the Senate of the United States, in further reply to the resolution of December 14, 1870, copies of certain papers found on file or record at Headquarters Department of the East, New York City, relating to the alleged unlawful Traffic entered into by Messrs. William and Byron Sprague, and other citizens of Rhode Island, with persons in the insurgent State of Texas, during the late war. These papers are as follows: 1. Letter from the commander of the Department of the East to the collector of the port of New York, December 13, 1864, advising the noncancellation of the bond of Reynolds & Co., on the cargo of the vessel Caraccas, and the seizure of cotton expected to arrive on the vessel Warrior. 2. Letter from the aforesaid department commander to the United States provost marshal at Hartford, Connecticut, directing the arrest of J. W. Boynton, and the seizure of his books and papers, December 15. 1864. 3. Letter from Headquarters Department of the East to William H. Reynolds, one of the alleged illicit traders, January 12, 1865, returning his account books and directing him to furnish transcripts of all entries therein relating to the so-called Texas adventure. 4. Letter from Headquarters Department of the East to the United States provost marshal at Providence, Rhode Island, January 19, 1865, renesting that a sworn statement concerning the Texas adventure be obtained from one General Freyas, who was understood to have acted as the agent of William Sprague in that adventure. 5. Letter from the Judge Advocate Department of the East to the department commander, March 22, 1865, reporting the result of his inTestigation into the alleged contraband traffic, and requesting special instructions before further proceeding against the parties implicated. 6. Letter from the department commander to the War Department, March 23, 1865, submitting the case for the action of the Department. 7. Letter from the Adjutant General of the Army to the commander of the Department of the East, June 9, 1865, directing, in the name of the Secretary of War, the release on parole of Harris Hoyt, the immediate manager of the Texas adventure, and the principal witness against the persons whose prosecution was then contemplated. 8. Letter from the department commander to the Superintendent of the Metropolitan Police, New York, June 12, 1865, ordering the release of Harris Hoyt from the house of detention upon the execution of an accompanying parole. 9. Letter from the attorney of Byron Sprague, one of the accused persons, to the department commander, June 26, 1865, notifying him of the intention of the said Byron Sprague to contest in the civil courts his arrest and restraint by military authority, and demanding that he be released from further restraint and duress. 10. Letter from Harris Hoyt to his attorney, August 13, 1865, requesting, for reasons of business and convenience, that he be discharged from his parole, or that the same be extended. 11. Letter from Headquarters Department of the East to the attorney of Harris Hoyt, August 18, 1865, extending the parole of the latter person, as requested. 12. The other papers upon which the report of the Judge Advocate General, of June 15, 1865, was founded-though duly returned by him to the War Department-have disappeared from its files and cannot now be discovered. WM. W. BELKNAP, HEADQUARTERS DEPARTMENT OF THE EAST, New York City, December 13, 1864. SIR: In consequence of disclosures made to me, I deem it my duty to advise you to prevent, for the present, the canceling of the bond given by Reynolds & Co. on the cargo of the Caraccas, from New York to Matamoras; and also, to notify you that on board the Warrior, daily expected in from Matamoras, there is a large amount of cotton that should be seized and held for forfeiture. I am, very respectfully, your obedient servant, SIMON DRAPER, Esq., Collector, &c., New York City. JOHN A. DIX, P.S.-McDennison, the naval officer, is aware of, and on the lookout for, the arrival of the Warrior. HEADQUARTERS DEPARTMENT OF THE EAST, New York City, December 15, 1864. SIR: You will please arrest J. W. Boynton, (of Boynton Machinery Agency, Hartford, Connecticut,) and take into your custody his books of account, letter-books, files of letters and accounts, and all books and papers exhibiting his correspondence since September, 1862, with Harris |
