The Tiffin tribune. (Tiffin, Ohio) 1868-1887, 1874-05-14
Especial Dispatch TO the Cleveland LEAD
WASHINGTON.
Rep -rt on the sanborn Contracts

WASHINGTON, May AIN til
Rouse OF Representatives to-day
Cnaries Foster, of Ohio, from the Com
nlttee OF Ways and Means, submitte,
i report in the matter of the Sanborl
contracts. The committee, in the frs
place, state they shave examined, 81
/ fsr as they know, all parties ia an
, way connected with the execution O
the law under which the SanborI
|, contracts were made, and that they
annex to their report a statement O
the testimony" They then proceed
8 soliaws:
The Forty-Second Congress, at it:
second session, repealed ali laws which
provided for the payment of moieties
70 lnformers, 50 far as related to in.
8 ternai revenue taxes but in the last
hours or the same session, and by
means OF q committee of conference,
there was engrafted on the legislative,
executive and judicial appropriation
biH provision OF seemingly so slight
i signlncanee as to have been added as
the last half of sentence in one oi
unusual paragraphs relating to the
Internal Revenue Bureau, wherein
7 PROVISIONS have been annually made
q for the support of said bureau. The
Il provision is here quoted "UndeT
the provisions of this law contracts
were made with w. II. Kelsey, NAL
colin Campbell, J. Nicholson Elbert,
John Clark, and John d. Sanborn. -
The committee gave the history OF the
Sanborn contract and how he had ad-
ded to it large number of names of
persons alleged to have been guilty
of with holding taxes imposed upon
legacies, SUGGESTIONS and incomes.
On the first of July, 1878, SanbOrn
again asked to arrange his contract,
and Mr.. Richardson, then Secretary
Of the Treasury, on the 7th Of July
following, added to his contract the
names OF 592 railroad companies al
legged to be indebted to the govern
ment for taxes upon dividends and
interest paid upon bonds.
The committee find that the infor-
nation furnished by the paid officers
of the government on which collee-
tions were made, was placed a, the
disposal Of Sanborn, who, availing
himself Of the information paid for by
the government, obtained q contract
for the collection of the very claims
thus brought to light and found to be
due the government. 1t further ap-
pears from the testimony of Sanborn
that when he applied for this railroad
contract he furnished q list of rail-
roads taken from q railroad manual
or guide, comprising the names of 592
railroad companies, being substan-
TALLY the entire list of railroads within
the United States. That while he had
knowledge Of the delinquency of only
100 to $50 of them, he had no knowl-
whatever of the delinquency of the
remaining 400 or $50. 1t also appears
that when he so represented it to the
officers of the Treasury Department,
he was there told that ''it would make
no difference and to put them all in ;"
whereupon he made affidavit that the
entire 592 railroad corporations were
delinquent and were indebted to the
government. They were accordingly
added to his contract. In this con-
nectiOn it may be proper to add that
the officers of the Treasury Depart
ment, including the Secretary of the
Treasury himself, seem to have no
recollection of this fact as sworn to
before the committee by Sanborn, in
reference TO the list of railroads in
cluded in his contract.
Here follows copy of the contract
made between Secretary Boutwell, and
Kelsey:
The committee called attention to
the fact that the law provides for the
employment of three persons to as
sist proper officers in discovering and
collecting" while the contracts pro-
vide that the contractors "may pro-
ceed to collect" thereby ignoring
the internal revenue officers altOgeth-
er, while it should have been sGpu-
lated merely that they should assist
the officers. Secretary Boutwell,, on
der Of f6eI June 1877, og oggaDaTtment oST @ is
sued in relation to the employment of
persons under this act, directed that
parties applying for contracts shall, to
his satisfaction, set forth in written
statement "under oath to be held in
his Office, the character, in detail, of
the claim ; the name of the person,
firm or corporation with holding
money the laws by violation Of
which the money has been withheld;"
and the evidence by which the claim
is to be supported. Upon doing which
written contract will be made upon
such terms and conditions as he shall
deem best for the interests Of the
United States. The committee be-
lieve that this requirement of Secre-
tary Boutwell, was in exact confor-
nifty to law. but they are unable to
find in any case that the condi-
tions, as set forth by the Sec
retary, have been complied with.
It is evident that the proper Of
ficers of the government referred to
in the law could only have been taken
to mean officers of internal revenue.
The Committee cannot ascertain that
the Commissioner of Internal Reven-
ne, or any officer of his department,
was consulted before, at the time, or
since the contracts we're made, or that
he was advised as to making the con-
tracts, or of the character of the claims
it was intended thereby to be collect
ed; in fact it is shown that the Com
missioner wrote letter protesting
against the manner of these collec-
tons TO the Secretary, which has new
er been answered. Indeed this very
important officer, to whom belongs
exclusively the collection Of these tax
es, appears to have been studionsly ig-
nOred by the Secretary of the Treas
ury and the officers in the Office of the
Secretary, and without the knowledge
of the commissioner, his subordinates
were directed to assist these contrac-
tors, and in no case can the commit
tee find that the contractors assisted
this officer. The whole power Of the
Internal Revenue Bureau, as Well as
the entire machinery of the govern
ment for the collection of taxes, was
placed at the disposal Of Sanborn by
letters from Secretaries Boutwell, and
Richardson, requesting supervisors
and collectors of internal revenue to
assist him in the examination of OFF,
cial record, ETC., the committee find
that some OF the agents of SanborD,
who were not employees of the gov
eminent, were without the authority
of law, furnished by the Secretary and
Assistant Secrets of the Treasury
with special letters to supervisors and
collectors throughout the country,
calling upon said officers to aid and
assist them as they might require. sIn
addition to this, to more completely
arm them with power, two OF these
same agents were furnished with the
secret service detective commissions
of the solicitor of the treasury. 1t is
the opinion of the committee that q
very large percentage, if not all OF the
S437, 900 of taxes collected by Sanborn
were not q proper subject Of contract
under the law, and these taxes should
and would have been collected by the
officers of the internal revenue bureau
in the ordinary discharge of their du-
ty. 1t is shown by the evidence be-
fore the committee that about SIC, 1000
was collected by Supervisors Hawley
and Simmons from taxes imposed by
schedule 'C' of the internal revenue
laws, for collection of which no con-
tract was made with Sanborn or any
one else-nevertheless Sanborn claim
ed and was allowed fifty per cent.
/ thereof.
The committee cite the case of the
Delaware, Lackavanna & Western
Railroad Company, q full account OF
which has been Published, and go on
| to say that ''the theory of the law, as
administered, Is completely reversed
and instead of three persons being
employed to assist the proper Officers
Of the government, the proper officers
ofthe government have been made to
assist them. 1t IL certain that con-