, 1862-01-29

Report Of the Senate Committee on
Naval Affairs in Reply to
the' Communication Of
Secretary Wellest

Navy IN answer to resolution Of the Senate
OF the 9Th Inst, relative to the employment
Of George D. Morgan Of New York to par
chase vessels for the Government, ask leave
to report:
That they have given to the subject that
Careful consideration Which its important char
acter seemed to demand, and they now sub
nit the result Of their examination to the Sen
ats: By tle letter Of the seeretary the Com
Inlttce and Senate are relieved from all EN-
harrassment rs to the evidence Of the transac~
tions under consideration, rs the facts arc
plainly stated By the Secretary, who, without
endcayorlng to conceal or cover up any Of the
prominent features Of the ease, claims in his
letter that it. Is 4 matter for praise rnthcr
than, ccnsnte and his conduct was the JaA!Jm2
JH.t'h"tnt. u htx public d,ay, andMr. G D. Morgan,
lEe agent employed, and who admits in his
ictfer to the Chairman Of the Committee on
Naval Affairs in the House Of Representatives,
winch the Secretary Of the Navy adopts and
makes part Of his report to the Senate), that
he Las already received seventy thousand dol
lars 0,000} for q Lricf period Of few months
III WHICH :he was employed, solemnly dealares
upon bis character and responsibility as 4
CARDS tie system adopted By the Secretary as
wise, and, # faithfully and well carried out ut
this time, highly conducive to the public i1-
teFest5. II this be true, and the transaction
deserves praise, and is the faithful fu1dIment
OF public duty, and, if faithfully and well car
then it ought to be Incorporated into our ordi-
narS and regular mode OF furnishing supplies
tor our army and navy, and extended to as
many branches Of the public service as posi-
bic.
In order to form Il proper estimate Of this
system, 50 much lauded by the Secretary and
his agent, let us see, in the first place, prc-
cisely what it is. The Government proposes
to buy large number Of vessels, and employs
IN agent to purchase them, allowing him to
k.1F
cent. on the price paid for each ycssc1-in
other words, onc-fortieth Of all the money paid
bE the Government for each and every vessel
is paid to the agent thus employed. That is
tic contract fairly stated In brief and simple
language If the Secretary had not raised tie
question, it could hardly have admitted Of
doubt that this compensation is wholly and
exclusively paid BY the Government from the
pu6lie treasury. But the Secretary ibors
under the hallucination that this money does
not come from the Government, md admits
that if it did, Or If his agent had been paid BY
fixed salary, or 4 percentage, however mod
est, payable by the Government, it would un-
qncstionably have been in violation Of Law
His language is:
Law has not been violated by the establishment
ahd operation OF the system as it GnGacstionably
W"nid haye been if ! had appolntcd mercantile
agent 10 do this work ct dxed salary, OF at per
! celltage, however moderate.
As the Secretary Of the Navy here admits
E; that If this percentage had been paid by the
| Government the transaction would rnuues-
| tionabIy have lccn . violation Of law, your
! Committee ask the attention Of the Senate to
Il brief examination Of that question, if Quc=-
| tion it may be called.
| To the minds Of your Committee nothing
can be palmer than tIl.t every seller fixes the
| price OF the article he proposes to sell by ref
ereucc to the cost OF the same up to the time
| OF sale. Il the vessel has, for example, to be
brought from one place to another before the
s:le is completed, Or if :, tax is levied By the
Government on the sale, or if 4 percentage is
PAYABLE to the State Or national Government,
| or to any one else on the amount received for
tic yesssl, cal, it be necessary to argue the
| proposition tI,st the cost Of such trlnsporta-
t1on, or the tax, or the percentage, is consId.
cred by the seller in fixing the price, and is
paid by the purchaser? Mr.. Morgan, it must
made 4 purchase, informed the person to
wl'o,n he proposed to bug, that p per ccut.
on the amount paid must 60 to him; and it
/ appears to your Committee to be an
lnlpeaenmcnt OF common sense to
pretend that the seller did Hot include that
commission i'll the price for Which he CON
s.nted to sell. The gross amount for which
th. vessel Is 10 be purchased, including that
| which GOES to 1hc Seller and that whi.h Mr.
Morgan rctalls IN lis own hands, al comes Ill
rcctly from The Treasury OF tllc United States,
and no part of it from any oth.r source; and
it is impossible for your Committee 10 con
ceivc how the Must ingenious and subtle So
| rhl=tIy can impose On the simplcst under
J staAdinG the impression that the Cnitel States
doc: not directly pay this moncy. IT the cost
ef the vessels to the Government is not in
erased by the ~ percent. commission exact
I'd from the SELLER it would not be Increased
ts commission Of yer ceut. or 10 per cent.
or even 30 Per cent.
1t is elaimcd that this arrangement is in ac-
cordance With tho usual mercantile custom
say soncthing Of 1lHlt hereafter, yonr Commit
tee arc Of opinion, in the language Of III emi
n.nt and liahly respectable gentleman o
New York, with whom they have had OCCASION
to correspond, that the ''hakiag a Gorssa,ueu
"'aT'tt for purchases ttpe'atltat upon The ssElet
"tio; depeaaa1t upon tie crte,t tad costlt,tesS O
s'hfs1,a'c|usrs, is Immoral a7aa sosE*ptiny, ans
~ nttntfs 70 etffaFaytt"ce, to eeNusios aid 4
! "fIuH04a
Human nature is frai} enough when sur
rounded by all the Inducements to honest,
Which cali BE- thrown around il us safeguards
and accordingly it has been found to be til,
| wiEcst policy, i'll the conduct Of the oriinar,
affairs Of Life, as far as practicable, to MAXI
duty and interest to coincide, but by this sys
MUM is offered to dishonesty and trcaclery
Instead Of its being for the interest Of ti
, agent carefully to guard aud protect the right
*nd Interests Of tue Government Eo7 WHICH HI
acts, and to purchase the vessel for the loves
t price at Which she can be bought, lie has di
+ rect pecuniary interest in ra?ing the larges
possible price which the seller can with IN.
slos: Of decvncy demand, and thus lis iutcT
csts are brought i'll direct conflict with Iii
) 1nty. Now, although Mr.. Morgan, with th
s7o, 600 in his pocket, AYERS upon bis " char:lc
and; a Man Of business that this i
"a wise SYSTEM, and il well and faith
E fully carried out at this time, lishl
!, conducive to the public Interests" yet it uu
= fortunately happens that the universal jud.
mc1t Of mankind is Of rery different cha'
:. acter. Thus no judge or juror is allowed
C set in 8 case where lie has the slightest pecr
MARY interest, and Il II were known that
= referee, Arbitrator, or umpire between tw
t parties, was 10 have lis compensation dcpcnt
C cnt upon the amount which he should adjud,
= where would join in denouncing lis decisioil
= = not as dishohest and corrupt. ut least
. unworthy OF any confidence. The Eropos
l. tinn that one man should act as agent for Il,
n Other mud have direct reeuniary interest AZ
:. verse to lis employer, and prompting him
Ii make }ar.r purchases at high prices, with Ii
compensation constantly Increasing in diret
v proportion to the number of his purchase;
K and the cxtreyaganee Of the prices WHICH /
i conpels his employer to pay, seems to yo1
/; I committee to be proposition so moustrov
4 | as 10 require 10 argument to demonstrate il
= lneSpcdlcDcy and immortality.
j. At The time this arrangement was mad
l. | there were MANY other things Of which IL
II | Government Was in pressing want as well .
/. Vessels, such as horses, beef cattle arms, etc
i and # the system adopted by the Secretary
# the Navy tor the purchase Of vessels WEI
h wise, and L faithful discharge Of a public dut
j. why would it not bc 4 proper mode Of pu
= chasing horses? Yet what would have be-
e said if an agent had been employed to pu
II chase horses, and to receive rs !. compensate
~ for his services Il commission Of 21s Der cc,,
on the a1nount he should pay for tbem9 Do
rot every one perceive that such an arfanu
IL uIcnt would Lave been IN Invitation to frat
E and premium npon dishonesty: Aud yo'
Committee are by no means satisfied that i!i
~ srch 4 consequence as might naturally lla,
e brrn anticipated 10 follow such an ;,rrar1c
~ and that Instead Of saving, as the Secreta
), tlattcrs himself lie has, some Is per cen
=, OH the amount demanded By the sellers Of IL
Il 7cssels purchased, he has not actually pa
!, more for those vessels than they might ha,
= been obtained for if 10 sueh course had bee
- adopted. Indeed to your Committee it sccn
- altogetlleg probable that such was the fact, f
=, the very announcement that al agent was
- =. the market to buy vessels for the Govcrnmeu
i amount paid for the purchases he might max
y we submit, would naturally suggest to eve
:. seller that here was rare opportunity, such
> never had occurred before, and in all hum:
- probability never would occur again. where Il
~ interest of both buyer aud seller united in Il
ing the highest price that could be demands
II and paid without shocking the moral sense
- the community.
~ e. Nor are tile Committee at all shaken in Il,
- opinion by the ostentatlous display in parall
~ columns, il the table affixed to the Secretary
- | letter. Of the price asked and the rrice m