National Republican. (Washington City (D.C.)) 1872-1888, 1874-05-06
TIE SANB0RN CONTRACTS
REPoR- FROM FEy; - fYS AND MEANS
COAHITTEE.

CONHITTEE.
RECOAIMrNDATICN THAT THE LAW IF re-
rEALED-CDNFLICT OF TESTIMONY AND
OF OPINION RETWEEN MESSRS. KICIIAED-
son. SAWYER AND BANFIELD-THE IN
TEENAL REVENUE BUREAU IGNORED
The Committee on Ways anil Means, to whom
were referred the several COMMUNICATIONS OIL tue
Secretary Of the Treasury in answer 10 inc resp
luton of tho House OF February IL, 1874, calling
unon hin, 70 transmit TO the House copies Of all
contracts made under The authority Of the Treas
ury DEPARTMENT in pursuance OF one OF the provi-
sions Of the legislative executive ana ludclal ap-
propriation bill approved May s, 1877; ana also
comics Of all schedules and correspondence and
or,fers OF The Department relating to said con-
tracts: and also the amount Of money paid in
under said contracts, and by whom, and under
which contract paid, having considered the same,
submitted report on Tuesday, embracing an ex-
tended synopsis Of the testimony taken. Among
other deductions, the committee declare that mo
Communication on tho subject ever passed from
the office OF the Secretary to that Of the commits
sioner. No order in regard to II was ever issued
through the commissioners office, nor were any
collections or other actions Of bis subordtnates
ever reported to him until after action was taken
in the House calling upon the Secretary Tor In
fact 1t is shown that the commissioner wrote
letter protesting against the manner OF these
collections to the Secretary which has never oeen
answered. Indeed, this very important onlcer, 10
whom belongs exclusively the collection Oh THESE
taxes, appears to have been studiously Ignored oy
the Secretary Of the Treasury and the officers In
the office Of the Secretary. And without the
knowledge of the commissioner his subordInGtes
were directed to assist these contractors, and In
no case can the committee ind that the con-
tractors assisted this officer"
Finally the COMMITTEES reach the conclusion that
IL the law authorizing the contracts sis not re-
peaIed and these contracts remain in force, the
contractor, armed with the power that he now
posses, will collect all the taxes due the Govern
rnent under repealed laws These taxes amount
to several millions of dollars, and this misplaced
power will take 1t all out Of the hands Of the
proper officers of the Government, virtually dis
placing them by the creation OF q new bureau for
the collection of this class of taxes, with some
such person Of these contractors at its head
and at the cost of one half Of this large sum.
"The theory OF the Law, as administered, is
completely reversed, and instead of these three
persons being employed to assist the proper on
Gers of the Government, the proper officers Of the
Government have been made to assist them.
"By the terms of the contract, and by the orders
of the Treasury Department, the taxes collected
by Sanborn could not be paid through the ofiees
OF the Internal Revenue Department, as required
by law. While the committee have no direct evil
dence that any internal revenue officer has had
corrupt connection with Sanoorn in the collection
of taxes vet the circumstances are such as to
show that certain internal revenue officers were
willing to obey the orders Of Sanborn, and, in do
Ing So did BOT communicate the fact to the COM
missioner of internal revenue and through their
agency very large sums have been collected.
sItis certain that a continuance OF this system
must work to a greater or less extent demoraliS-
alton of the entire outside working force engaged
under this bureau, in the collection Of the rev.
enues.
The committee, feeling alarmed at the ap-
parent loOseness with which the law has been
administered, we're DESTROYS Of ascertaining where
the responsibility rested whore 1t would seem to
belong somewhere in the Treasury Department.
They have had before them the Secretary. Assis-
tant Secretary Sawyer, and the Solicitor OF the
Treasury. The Secretary gave but little infor-
nation and exhibited an entire want of knowledge
as to the manner OF making the contracts, admin
fstering the law, or Of the provisions of the law
itself His only connection, far as he could
member, with these transactions, was in at1Xing
his signature to the various papers presented to
him as a mere matter Of once routine, without
knowing their contents.
"The Assistant Secretary discIaimed any par
ticular knowledge Of the law or contracts, and he
in like manner affixed his signature as q matter
of Office routine. The Secretary and the AssIs-
tant Secretary, by their testimony, show that the
papers were prepared by the Solicitor, thus indi-
eating the responsibility upon him. The Solicitor,
In turn, testified that he Is simply the laW-ofleeT
of the Treasury Department, and q subordinate
of the Secretary Of the Treasury, without any
power in regard to the administration OF this law
except that expressly given by the Secretary;
that he had consulted In every instance with the
Secretary or Assistant Secretary Of the Treasury;
that he had in all cases simply Obeyed the direc-
tiOns Of his superior officers, and that the CON-
tracts and the various orders of the Department
were well known 10 the Secretary and Assistant
Secretary.
'.Tao disagreements and contradictions given
respectively by these gentlemen, as appears from
their testimony, is matter greatly deplored by
the committee, By It they unable to Z upon
any one, or anywhere, the responsibility for the
administration Of this law; and they look with
serious apprehension upon the apparent effort OF
these gentlemen to transfer the responsibility each
from himself to the other.
''WhiIe the committee, therefore, are unable to
determine where the responsibility rssts, they
cannot in Justice to themselves ignore the fact
that these three persons deserve severe condem-
nation for the manner in which they have per-
mated this law to be administered. While the
committee thus severely crIticise these officials Of
the Treasury Department directly charged with
the administration Of this law, they find nothing
impca ching the integrity of Secretary BoutwslIs
or Richardson's action and the testimony docs not
prove that the Secretaries or any Of their assOc-
ates were Influenced by corrupt motives.
at is due to the Treasury officials to say that,
as far blck az the administration Of the Treasury
Department by Secretary uthre, such Contracts
were made for the collection Of moneys due the
United States in extraordinary cases. and that
this practice was continued zip to the time Mr..
Boutwell, became Secretary Of the Treasury.
When he canFs into oflse he found a number OF
contracts in existence, and his solicitor testifies
that, after thorough and exhaustive examlna-
ton, he found no authority in law permitting
them 10 he made, and the Secretary Of the Treas
ury at once annullci them. and that nothing OF
any consequence was ever collected from this
class OF contracts. Under the act oflS-O anumher
OF contracts were made by Secretary Boutwell,
and although Il was represented to the Secretary
that large sums were due the Government, and
the parties making the contracts professcd to be
able to collect what was due the amount collected
was very small. With the light Of the experience
orthe Treasury Department in the contract bust
ness here referred TO, the officers. We are told,
concluded that the parties proposing TO take eGn-
tracts under the law OF SIay e. lS72 would fail to
make collections in any considerable amount and
this fat may account for the apparent neglec, Of
this Department to carefully aai strictly enforce
the law.
And it is further dus 20 the present Treasury
officials say that no: only was this law enacted
while the predecessor OF The present Secretary
was in Office, hut that the first contracts we're
made by him, and the general policy Of admins
tration subsequently pursued determined upon
while Mr.. Boutwell, was Secretary Of .lo rreaE-
sury.
Tho committee are OF opinion that any system
OF farming the collection Of any portion of the
revenues Of the Government IS fundamentally
wrong: that no necessity for such laws exist, for
the reason that the Secretary cf'he Treasury and
the heal Of the thermal Revenue Bureau are
fully em powered by law TO rake all collections of
taxes, iLciu4Ing taxes due on account Of repealed
laws.
1.-The internal Revenue Bureau IS possessed OF
full knowledge OF the laws relating to the eUlec-
tion Of tie revenue: has all the machinery neces-
gary for the full and complete enforcement and
has full authority in extraordinary cases to pay
at discretion, FOR information, Congress annually
making appropriations therefor. Any law that
provides for any other method Of collsctingtaxes
the duty Of which collection Is imposed on any
Department Of the Government, is in fact q re-
Election the Department charged with that