The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-03-23
PART !.
THE DEFALcATIoNs OF MR. swARTwoUT.

eDeiat duly, BY the Fira Aadiior ~ hs 1reas1'y'
The duties Of the Fist Auditor are prescribed
In the 9th section Of the act af September y 80.
TO establish the Treasury Department. ana sns
act of March g. 1917, TO provide Tor me PIo'np
settlement Of public accounts" and are as follows;
al shall be the duty Of the First Auditor to re-
ceive all accounts accrung IN the treasury pepaI-
ment, and, after examination 20 cefiiy inc balance
| and transmit tina accounts, with the vouchers ana
certificates The First Comptroller, for his decision
thereon"
The present Auditor came into his Office Novem-
Der l, 1886.
The accounts Of Mr. Swartwout up to December
81, 1887 appear 10 have been regularly transmitted
10 his Office, pursuant 10 the Treasury circular
OF March !, 1880, for examination and settlement
The law conlemplaes this examination TO be tho
rough check upon the errors, II any exist, Of both
the collector and naval officer. And here all Mr..
Swartwouts accounts, except his bond accounts, APP
pear TO have been examined, with their proper
vouchers, and certified by the Auditor. But The
AUDITORS certificate covered the bond accounts as
well as the other charges although not IN iact ex-
amned. His certificate, with the vouchers, except
those relating TO bond accounts was transmitted to
The First Comptroller; but there was constant ne
gect TO transmit the vouchers OF the bond account
herewith, as positively required by law. II Is IN
these bond accounts thus neglected., and in regard
to which the law and Treasury instructions have at
all times been most specific requiring examination,
with vouchers, that the frauds upon the revenue by
Swariwoul were committed. No account appears
v
the Comptroller, because the vouchers of the bond
accounts OF Swarwout were not transmitted with
the Auditors certificate thereon.
II is to this eulpabe disregard Of law and neglect
OF duty In the Office of the Auditor that Is Attributable
the escape OF Swarwoul's fraud and defalcaion
from detection.
The same neglect In this most important branch Of
Swartwouts account appears 10 have prevailed In
the Auditors Office since 1882. II then originated
10 the disuse Of the records required BY positive in
structons well as from the nature OF the exami-
nation of accounts thai is required by law of the
Auditor. This feature in the administration Of this
office Is exhibited in the following examination;
Answers Of Mr.. Underwood, principal clerk in
the Office
Examined BY Mr.. Foster.
Question 90. Were not the accounts, abstracts,
and vouchers or other papers which were before
you at the time you made those examinations and
statements such usually before you In your
examinations and statements when upon the same
class of duties 7"
Answer They were.
Question 81. In that examination and aatement,d did
you not bestow the same care and attention as you
have at other times bestowed upon the same class
of duties 7"
Answer did, except that, in relation to the bond
account, made no examination whatever
Question D. What were the reasons why you did
not examine the bond account at the same time that
you examined the other accounS7
Answer. As the bonds taken in New York are
quarter VI 1884, while those paid or put in suit are
marked off only TO the 4h quarter Of 1892" it was
utterly impracticable for me 10 make such an exam
nation of the bond accounts for the 3D. and 4h quar-
tiers of 1887 as would test their accuracy As soon
as the account of the customs was received at the
office of the First Auditor, the bond accounts were
handed in to the clerk, whose duty II was to enter
and mark off the bonds; and there they remain to
this day.
Question 49, Did you, on that examination and
statement discover any dealeafton the part Of Mr.
Swanwout
Answer. did not.
Examined By Mr.. Smith.
Question Al. L 1t true, or is 1t not true that the
prescribed by law, of Mr.. Swarwouts quarterly ac-
counts OF bonds taken and bond. paid returned to
the Treasury Department, has been entirely omitted
since 1882 and Is true or not true, that this omis
sion examine said accounts is The sole reason why
Swarlwoul's defalcaons on paid bonds have escaped
detection at The Treasury Department until after he
left his office
Answer. The bond accounts Of New York have not
been examined, is believed. the Office Of The First
Auditor, since the fourth quarter of 1892. Had said
accounts been thoroughly examined received
the office of the First Auditor the def,lcation in re-
gard to the bonds must. in my opinion, have been dis
covered before the expiration Of Mr. Swartwouts
term Whether the omission to make such examina-
ton be the sole why his dedication said bonds
was 50 discovered, / do not know.
| Question AZ. Do you know, from your acquaintance
with the nature OF said accounts, and yonr experience
in the Auditors Office, any other for
successful concealment Of his defalcations than the
omission to examine his accounts thoroughly at the
Auditors Office ~ Please also for what period
you have been connected with said office an account
upon custom house returns
Answer. do not know, regards the returns of Mr.
Swartwout to the First Auditor, any reason why his
defacaons were not discovered sooner, other than the
omission to examine his bond account promptly and
thoroughly atthe First Auditors office.
1t is apparent to the committee, from the examna.
ton and testimony, that the First Auditor himself has
never until very recently, made himself acquainted with
the internal organization and duties Of his Office or the
system Of checks instituted under Treasury regulations
for IT, OF course If the chief IN the Office is either
negligent or ignorant of the duties devolved by law
upon him, negligent because ignorant of the modes
instituted and IN force through prior years Of executing
those duties, the subOrdnacs of the office may find
ample opportunity for INDUCING in any degrees of
negligence la their vocaons, to the imminent hazard
of the whole revenue Of the nation, and its conse-
quent loss in unmeasured and unknown masses In
answer he says: " When came into Office on the
LIST of November 1885, the recording Of the abstracts
Of bonds taken in New York was, think as far back
as some time IN 1888, and the checking off was back
somewhere in 1882. was considerable time in
office before my attention drawn TO these bond
registers; and, at first only regarded them records
the purpose Of reference when occasion might require
and did not understand that they intended to check
me collector In his quarterly returns. At what time
did become acquainted with the object for which they
were instituted, cannot rccocct; and perhaps even
ihen d'd not fully estimate the Importance Of having
them brought up. The manner in which thew had been
kept and the little importance that seemed to have
been attached to them by my predecessor had certainly
essened their importance in my estimation however
dd direct another clerk whom | had employed in re-
cordns The reports on the collectors accounts, to de.
vote any time he had to spare from recording the re-
ports TO recording bonds which he did until other
business required his attention But, deem il proper
to say, that, II had been fully aware Of the use Of
these registers at the moment came into Office, and
had put clerk his whole time to recording aud checking
off the New York bond account he would no, have heen
able to have brought il mn 40 as To have discnrered The