The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-01-29
NEW HERALD THURSDAY JANUARY g. s74rRPLE SHEET

Governments Loss by the Failure OF
+. Clews, Hsbicht & Co.-What the Over
O0ciousncss OF tho State DEPARTING mt
Has Cost the People.
The Treasury Department. with the exception OF
two untmp0rtaut accounts not yet received from
the Department OF State, has succeeded in getting
the government accounts vita Clews Habicht A.
Co.. late bankers at London, In condition, prelim.
mary to final settlement OF the finances of that
concern, should they ever warrant such desir
able result. For great many years 1t has been
customary for the government to have destg
mated banking house in London for the transac
ton OF all financial operations incident to receipts
and disbursements of the diplomatic and consular
service. The disbursements for the naval service,
In European waters and postal expenses abroad
are also made through bankers selected
by those departments. Previous to the
passage OF the Consular aud Diplomatic
act OF August 49, 1856 the expenses OF the consular
and diplomatic services were paid by the govern
ment bankers on the order OF che Dtsbursing Clerk
OF the State Department. In those DAYS the
amounts included outfits and gross compensation
OF Ministers. The Ministers never rendered any
accounts but drew on the bankers. and the State
Department. without examination. said IL was all
right After 1856 system OF accounts was per-
footed which has since assured responsibility.
London were appointed government bankers and
transacted the business with great satisfaction to
the Treasury Department. Upon the incoming OF
the present administration cry was raised that
the government accounts ought to be in the
hands OF Americans. Various unfounded allegations
were made against the political productions and
sympathies OF the Barngs. Finally in August
1871, the President was induced to give the orders
necessary to the transfer OF che accounts to Clews
Habcht Co.. OF London who had been selected
in the place Of the Barings. The Treasury Depart
ment issued the necessary orders to consular and
diplomatic officers directing them. on ana after
October l. 1871. to remit the fees OF their offices
the new bankers At the time of the transfer the
Barings, according to the accounts OF the Treas
ury. held $4,000. which they were directed to
turn over to the newly appointed State bankers
The State Department. with characteristic kn0w-
edge OF IT'S financial business also sent an order to
the Earrings to turn over the balance their credit
It turned out that the balance was on the wrong
side OF the books, andthat, instead OF credit the
State Department owed the Barlngs ,000 This
lett $4,000 as the actual amount paid by the
Earrings to Clews, Habcht & Co. 1t should be
stated, In explanation Of what follows that all
Consular officers, except In BRUSH America, the
West Indies and South America, are required to
remit to the government bankers all fees in excess
OF the amount OF their salaries and allowances
which they are permitted to retain, accounting for
the same to the department quarterly. For some
lnexphcable reason, which the State Department
can perhaps explain, the balances to the credit OF
the Treasury Department in London were per-
mttted TO run up to the extraordinary sum OF be-
tween $225 900 and $3.50 900, which was the amount
OF the government funds In possession OF the
house OF Clews, Habicht & Co. when 1t failed
At the time IL was not known what the actual
amount was, the Treasury not being aware OF
the transactions Of the Department OF State
1t was presumed, however, that $125,OOO
would cover the government loss. The closing up
of the account Of Ciews, Habicht Co. shows that
the loss is just double that sum. The RESPONSE
bilty for this large loss OF government money
rests entirely with the Department OF State, in
consequence OF its interference with the proper
functions Of the oflcers Of the Treasury Depart
ment. Under the laws governing government
accounts the Treasury Department Is presumed to
have exclusive control Of receipts and dsburse-
ments and all other matters bearing directly
thereupon. At the time OF the change Of bankers
the Secretary OF State took umbrage at the crcu-
lar instructions sent out by the Secretary Of the
Treasury, and has invariably embarrassed that
officer in securing proper and prompt settlement
OF consular accounts In this the department OF
State ignores the plain provisions of the act Of
1856, under which the Treasury Department Is pre-
sumed to act In connection with other improve
ments Of the consular service 1t Is proposed to
take oil matters OF accounts out OF the hands OF
the Department Of State the interference OF which
has led to so much confusion and loss
Naval Estimates To he Reduced Forty
Per Cent.
The Senate Committee on Appropriations to-day
further considered the Naval Appropriation bill.
and heard Captain Jefrers Chief Of the Bureau OF
Ordnance. in regard to items for that branch OF
the service. Very little change will be made in
the bill as 1t came from the House, and the action
OF the latter body in cutting down appropriations
for the civil establishment OF the various navy
yards forty per cent below the figures Of last year
will be sustained by the Senate committee.