The Tiffin tribune. (Tiffin, Ohio) 1868-1887, 1874-06-04

5 these facts known to the Treasury of
Z fieials, why was the contract made
: Sir, these are some of the questions Il
: which the committee cannot Obtain
] satisfactory answers from any on'
: connected with the Treasury, and Il
{ has been found impossible 70 plee'
: this gross dereliction of duty where
! IL directly belongs. On the 18th o.
D October, 1872, Sanborn made applica'
T ton to have added to his contract the
; names of seven hundred and sixty
: persons alleged to have withheld tax
: es imposed on legaeies, SUGGESTIONS
} and incomes, and on the 30th of De-
2 tober following, they were added tC
: his contract, the additional contract
being also signed by Acting Seereta-
; ~ Richardson.
Sanborn applied for on the 18th oi
March, 1873, and had added to bis
contract on the same day the names
OF some two thousand persons alleged
also to have been guilty OF withhold
J ing taxes imposed upon legacies, sue
cessions and incomes, including the
names Of about three hundred and
nifty foreign residents. On the 1st OF
July, 1873, Ssnbo-n again asked to
amend his contract; this time appear
ing In person and asking that the
names Of five hundred and ninety
two railroad companies be added to
his contract, alleging that these rail-
road companies were Indebted to the
Government "for taxes upon divi-
dends and interest paid upon bonds" I"
banbofn testified 20 the committee
that the five hundred and ninety-two
railroads which were added to the
eUntract at this time were taken from
Appieton's or some other railroad
guide or manual, and that it COM
prised the names of all the railroad
companies found therein, including
: some that were simply organized and
which could not by any possibility
have owed the Government. Then
he advised Secretary Richardson that
he had knowledge that only one hun
dred and fifty had been examined
with q view to ascertain their Iiabili-
ty to the Government; and that he
had no knowledge whatever in re-
gard to such liability on the part of
the remaining four hundred to four
hundred and fifty; and that the Sec
retary, with full knowledge of this
state of facts, told him to "put them
all in" and thereupon he made oath
that they were all indebted to the
Government; and they were accord
ingly added TO this contract.
The following is transcript OF the
entire proceedings from the records of
the Treasury Department, by which
this now remarkable contract was at
tached to the original contract of
Sanborn
BosToN, July I, 1873.
SIR: I have the honor to inclose a list of
railroad corporations doing business in the
United States which are indebted to the
| Government for taxes upon dividends and
/ interest paid upon bonds, which they have
heretofore withheld and refused to pay.
| IWould respectfully ask that the Enclosed
the Secretary OF the Treasury; said contract
bearing date August l3, 1872, and as amend
ed October 30, 1872.
Very respectfully, your obedIent servant,
JOHN d. SANBORN.
Hon. WM. A. RICHARDSON,
| Secretary of the Treasury.
Subscribed and sworn before me, legally
appointed notary public for the City and
eonnty Of New York, this Sd day Of July, in
the year 1873. WIN. H. STINER,
| seal. Notary Public. (239.)
Endorsements.
Respectfully referred to the Solicitor of the
VIM. A. RICHARDSON,
Secretary Of the Treasury,
JULY7, 1873.
recommend that the within list be added
to and made a part OF Mr.. Sanborn's con-
&c. BANFIELD,
Solicitor Of the Treasury.
WIN. A. RICHARDSON.
Secretary.
BY the testimony of Supervisor
Hawley, Of New York, it is shown
that as early as the month Of
May, 1873, he, acting upon the written
Instructions of the Treasury Depart
ment and the verbal version thereof
given to him by Supervisor Simmons,
of New England, detailed two of his
subordinates, Stiner and Stowe, to
make examinations of railroads al.
legged by Sanborn to have withheld
taxes, Sanborn advising bim that he
had q contract for the collection Of
| taxes SO withheld Among the ex-
aminatiOns made by these persons de-
tailed by Hawiey under the instrue-
tions of Simmons was that of the
Delaware, Lackawanna and Western
Railroad Company.
Now, Mr.. Speaker, 1t appears that
two months after this detail of Stiner
and Stowe was made, two months
after Mr.. Sanborn had told Hawley
that he had q contract, this extraor-
dinary railroad contract was obtained
by Ssnborn, and included in this con-
tract were the names of railroads
worked up by Stiner and Stowe, aud
so worked up while under pay of the
Internal Revenue Department.
Thus Sanborn, availing himself of
information paid for by the Govern
ment, he himself at the time an en-
plOye of the Government, obtained
contracts for the collection of claims
thus found to be due the Government.
In fact Hawley testifies that in no
case did Sanborn furnish information
beyond saying that the parties named
owed the Government that Sanborn
was at no expense whatever in col
| lecting, and he was unable to tell
whether or not his department had
any knowledge of the liability to the
Government of any part included in
Sanborn's contracts. He simply
obeyed SanbOrn, and felt bound to do
so, under the written orders Of the
Treasury Department, rs explained
and expounded by Simmons, who pro-
fessed to have seen both the Secretary
and Commissioner Of Internal Reve-
nue., Simmons saying to Hawley that
both of these officers fully understood
the matter, and that It was Hawley's
duty to obey Sanborn as he might re-
quest.
The following is copy of the con-
tract between the Secretary of the
Treasury and Kelsey, being the first
one made under the law:
An agreement made this sth day OF June,
A. D., lSz2 by and between Geo. s. Bout
vel, Secretary y 81 me TreasnTy, party 0i S. Ine
eseo, in the county OF Livingston, and
State OF New York, party of the second
part:
The party Of the second part having been
designated by the Secretary OF the Treasury
as one OF the three persons to assist the
proper ofacers of the Government in dis
| covering and collecting moneys belonging
TO the United States, withheld by certain
persons or corporations, under one OF the
provisions of the Legislative, executive, and
| Judicial appropriation bill approved May s.,
i 1872 and the said party of the second part
| having fully set forth as therein reqEired, in
/ q written statement, nnder oath, addressed
TO the Secretary OF the Treasury, and fled in
his ONCE, that ne proposes 70 recover or as
sist In recovering for the United States from
the following hore-railroad companies in
the city of Philadelphia, a large sum OF
/ money. to wit; the sum of about 100000,
/ which the said party OF the second part
| claims TO be due to the United States. as and
| for iuternal-revenue taxes which have been
withheld by said corporations, to-wit; taxes
due under and by force Of sections los, l09
and - Of the act OF June 80, 1854, and sec
| tions Is and IL of the act OF July IA, 1870.
| Now II Is agreed by and between the said
| parties
First. That the said party of the second
part may proceed to collect the said taxes so
/ alleged to be due to the United States by the
said corporations.
Second. That in case any legal proceed
fngs are required to be had IN the premises,
/ the same shall be conducted by the proper
/ United States attorney, but no such pro-
/ ceedfngs shall be taken without the written
consent Of the Secretary of the Treasury INST
being obtained.
! Third. No settlement of such claims shall
| be made, except under the provisions OF sec
j ton 10 Of the act Of March 8, 1853
i Fourth. All the costs and expenses which
shall be incurred by the party Of the second
part IN investigating and prosecuting the
4 said claims, OF every name or natnre, shall
be paid and borne by said party OF the sec
ond part, and no part of the same shall DC
paid out of that portion of whatever shall be
realized from said claims under this agree.
ment which is 70 be retained by the United