The daily exchange. [volume] (Baltimore, Md.) 1858-1861, 1861-03-11
TEE INDIAN BOND ROBBE cry.
THE DEFENCE OF EX-SECRETlRY FLOYD.
HIS REPLY TO the MORRIS
CON MHTTEE'S REPORT.
HIS EHPLANA TION OF THE TRANSAG-
TIONS OF HIS DEPA RTMENT
TO THE PUBLIC.

TIONS OF HIS DEPARTMENT
TO THE PUBLIC.
Before charactcrizng the extraordinary procee,
tIss OF TINS committee, L will examine and refut
| tne!r charges against me, in every case in whic
they nave ventured to reduce them to specific form
AND, hrst in regard to
| THE LEGALITY OF THE ACCEPTANCEs
winch L gave to TO the contractors for army tran;
portatlon over the Western plains. The committe
allege, without particle of authority in fact tha
confessed to Mr.. Benjamin they were illegal an
assert % that they were given in ''disobedience @
law" | could never have confessed thev were il
legal, for | never believed they were: thouob
never pretended that there was express law autho
rlzlng acceptances by name. They were not with
out precedent. At different times, almost every
| department OF the Government has put out paper
| IN Gluerent forms, for negotiation.
During the with Mexico it was for neriod
| the pracuce OF Quartermasters to draw upon thu
QuartermasterGeneral in favor of creditors os tl
! Government, and for the latter officer, in the alb
| sehce or funds, to accept the orders, whereupof
| the paper went into the hands of capitalists
suppose these acceptances amounted to millions O
uohars lot 1t has been said (though doubtless witt
| exaggeration,) that the Mexican war was carried
| on Dy this means 1t is also notorious fact that
| within the last year two, claims upon the Post
oflce Department, to a very large amount, have
oeen put INTO form to be made the subject of nego-
| uation Going back to an earlier neriod of tbf
| Government, it will be found that this practice
| was very early adopted. Indeed, paper precisev Y
| OF the Kind issued by me, drawn in the yerv Ian
| guage OF the unconditional acceptances which
gave, have, in repeated instances passed even the
| ordeal OF the courts unscathed During the Ad.
m!nlstration OF General Jackson the PoSt-ofiice De-
| partment issued accepances, unconditional as well
| as conditional. Not only did it accept in favor oil
contractors to whom it owed money but il in
uuced contractors, who enjoyed high credit with
the public, to draw upon it, in order that it migbt
accept ana raise money on the paper for its own
uses. lSee page 10 of the record of case No. IT'S
II IN the Court OF Claims One of these contractors
haVlng afterwards died, the settlement of his ac-
| counts with tbs Government involving several Of
tnese acceptances, became the subject of adiudica-
| ton In Pennsyl ylvania.
In this suit the court allowed the acceptances to
De estimated as valid; and its decision being en-.
dorsed by the Court of Claims Congress afterwards
| passed an act approprating the amount recovered
! against the Government-thus recognizing the va
ndlty Of the paper. (This was in the case of Rec
sldes executrix). There was also another suit in
stituted in the District of Columbia, turning spe-
clhcay upon the validity of this precise class of
GRATIS; and the Judgment of the court recognized
tlelr validity. The case went up to the Supreme
onuFt OF the United States, and that august tribu
mai affirmed the Judgment below, in an able deci-
SION, not one dissenting. (See Is Peters, 377 Some
taree years ago the Secretary of the Treasury
GAINED the right to offset some payments that had
pgeh MADE by the Government acceptances of
ahls sort against an appropriation of Congress in
iaVor OF the representative of party to the pa
per: The Attorney General gave an opinion
against the propriety of the offset based on MANY
reasons, but among all the assigned it did
not occur to that official to aege the illepaty and
nulity of the paper in support of his conclusion
ACase IT'S, Court of Clams) Thus court in
nsylvania, court in the District of Columbia.
the Court OF Claims Of the United States the Su.
pTeme Court of the United States and Conuress
nave all recognized this precise class Of paper as
valid and legal.
If this be so in the case of the Post Office DEPART
ment torori, is it so in that Of the War Depart.
hent, winch Is expressly authorized to contract,
without the authority of specific law for the case.
by the act Of 1920, in these words:
SEC G. And be it further enacted, That no contrac
shall hereafter be made by the Secretary of State or of
the Treasury, of the Department of War or of he
navy except under law authorizing the same or un-
der an appropriation adequate its ulflment; and ex-
OF the army and navy and contracts by the Quarteras
es Department which may be made by the Secretaries
Of those Departments
Here the Secretary of War is expressly author
lied to make contracts for the Ouarternaster,s De
partment without the authority of express law.
and accordingly dismiss the charge of the com .
mlttee, that my conduct was in dsobedience of
law
Will now explain the reasons which dictated
THE GRANTING OF ACCEPTAHCEs.
This was act of merit for which | deserva tho
commendation of the country, rather than the CEN
sure OF Congressional committees. In the history
OF the world there is nothing for which cabinets
sacrifices than for the safety of armies against an
want OF provisions and under similar circumstan
ces would do again for the comfort and security
OF our army IN the remote West, dependent for its
existence upon the transportation trains, what
yituperation W
The transportation for this service REQUIRED an
immense outlay at the outset for wagons, teams
ana perlshabe stock; such few men of establish
ed capital would venture upon and none hut men
OF extraordinary enterprise would think of risl,
ing. The stock thus purchased to be sent out into
the distant wilderness to encounter mutinIied
hazards, itself furnished no basis of credit for it
could not be insured; and the very fact that men
embarked their means and credit in such adven-
lures, tended to discredit them with capitalists,
class proverbially tmid and cautious. The outlay
moreover, was all required in the fitting out and
starting eff of these trains, while the earnings could
not be collected until the trains had traversed i'm
menSe distances, occupying several months; nor
until the bills OF adiug could retrace the same e-
dlous journeys in returning to the posts of the ac-
counting officers of Government. The service w AS
peculiar, also, in its immense magnitude involving
millions where other contracts of Govern
ment only involve thousands or hun
dreds Of thousands. Russell, Majors,
Waddell were the only bidders for this dangerous
contract, under the advertisements published by
the Departments. Thus in the heaviness of the
outlay necessary in the outset; in the dangers en-
countered by the stock employed from STAN
pedes, Indian attacks, and accidents of food
and field, rendering it useless as basis Of cred
1t; IN the extraordinary lapse of time requisite
for collecting the earnings after the expenditure
was made; IN the magnitude of the undertaking
ltsel and in the difficulty of obtaining contrac-
tors at all, this service differed from any other
ever before known in the history of military on
eratlous or government contracts. Under this
wholly anomalous state of things the question
arose IN the very beginning, and continued to pre-
sent itself in the progress of the seryce-how shall
these men be enabled to anticipate their earninps
thus unusually delayed, deprived as they are of the
means OF obtaining credit upon their stock from its
perlshable character, and the extraordinary haz-
ards attending 1t at every step? 1t plain that
they could obtain credit only upon their contract.
and the acceptances | gave seemed the only mode
available of providing them with the means neces-
sary Tor their operations. The house of Russell,
mayors Waddell universally esteemed
throughout the West as inferior to none either in
capital credit, character. This firm had bv its
promptness, efficiency, and fair dealing won the
confidence of the Government, in whose service it
mad been since lS4S 1t was, therefore, under the
circumstances, no imprudence even to confide to
them the important trust of taking care of their own
credit.
At the time the first of the acceptances were
gwen, there a deficiency of funds to nav for
the operations OF the Quartermaster's Department
Tor the fiscal year preceding that of nv coming
into office; besides which fact, an e-traordinary
outlay, IN advance appropriations, was necessary
lor the expedition to Utah; and these first accent
ances were given to meet the emergency thus nre-
sented. Moreover, trains of these contractors,
laden with army supplies, had about that time
been destroyed by the MOr MONS in respect to
which catastrophe the accounting officers of the
government were bound, of course, not only to
refuse payment OF the transportation money earned
hut to withhold also the value of the supplies on
hand out of other dues of the contractors who
thus lost, not only their earnings, but the value of
the goods for which they had receipted as we'll as
their teams and stock. This loss, resulting from
the act o the public enemy, and justly chargeable
upon the Government, could only be made good by
Congress.
The contractors have always estimated its amount
at ABOUT S44OOOO 1t has never vet been paid. 1t
very seriously crippled their resources at the out.
SIT OF their operations under nv administration
and threw them into the market as borrowers of
money at high rates of interest. The interest thus
entalled upon them for upwards of three years
added to the principal, now represents a loss of
more than half million of dollars. The country
cannot have forgotten that, at the time these &C
ceptahces were given, an actual rebellion was on
foot IN Utah; that the whole United States force
was In most perilous condition from the fear of
starvation. The troops were thousand miles be-
yond the limits ofour settlements, in desert coun-
try ahordng not solitary supply of any sort, and
annoyed constantly by an active daring enemy
who hung continually around them avowedly for
cutting of supplies. The country recollects that
our army was reduced to such extremity that only
a single weeks provisions saved them from the ne
cessity of eating their mules. What would have
been the censure of the country upon me if had
from any cause allowed the army there to suffer
for provisions! | was bitterly abused for the risk
the troops were exposed to--what would have
been the just condemnation heaped upon me if the
impending = dangers had actually. befallen them?
| think the public is now prepared tc understand
why "'N
THE AMOUNT OF THE ACCEPrAYcEs
negotiated during the four wears tor the purpose
explained, corresponded substantially with the
earnings OF the contractors say corresponded
SUBSTANTIALLY because the service was subiectad IN