Morning journal and courier., 1881-11-24
News by Telegraph FROM ALL QUARTERS. STAR ROUTE METHODS. Means Employed to SwindIe
 the Government. A Huge Conspiracy Unearthed. Effective Work by Special
 Agent Gibson, Guiteau's SaIIies in the Court. Averse to Being Described as
 a Fool.
Guiteau's SaIIies in the Court
Averse to Being Described as
 Fool.
THE NATIONAL CAPITAL.

! THE NAIlONAL CAHlIALs The Star Route Frauds-Meth0ds Adopt | ed to Swindle the Government-The Re ! port OfSpecial Agent Gibson-A Length! and Comprehensive Statement-Othe Matters.
 | WAsHINGToN, Nov. 23.-The report of A M. Gibson, the special agent detailed to ex anime into the Star route frauds for the de partment of justice, is made public to-day | The report is made to the Attorney Genera | and is very lengthy, consisting of nearl, | twenty thousand words exclusive of a mum 1 Der of tables marked "exhibits." Its genera statements are as follows:
 First that in advertising for proposals to transpor the mail on Star routes in the Pacific contract secto1
 1t was the rule to ask for number of trips less thai
 1t was pretended the needs of the country required immediately after the service began. Second, tha the schedule time in the Star routes sys eInat icaly made longer in the advertisements by which was pretended immediately after the service bega1 Star routes advertised to be larger than the, really were Fourth, that the Star routes have beer advertised to be shorter than they really Fifth that this system in the manner described proposi tions first second, third and fourth steps take1 whereby few contractors obtained control of more than four hundred routes at very low pay and the1 by means of extra allowances made iD violation of law got the pay of the increased by the addition trips the expedition of the schedule and increased distance until three, four, i've six and time the orlglna contract price paid Sixth, that by advert tising the routes longer than they petition of the schedule thereon required less vices Seventh That the routes being adyerLisec shorter than they actually were, enabled he contrac increased by trips added schedules expedited obtain pretext another pro rata pay for the increased distance Eighth this system required
 ontractors who obtained routes at small pay to give proportionaely less rds which not required tc be increased in proportion the pay increased by extra allowances for additional trips, expedited schedules and increased distance that this opened the door to straw bidding. and men who were no torlous dummies hab1tually appeared as bidd rs and as circumstances required became failing bidders and failing contractors remained and sublet their principals just as they failed succeeded in getting the pay of the routes increased that the bondsmen of these dummies were always worthless hind them. Ninth, that in giving out temporary service 8 few contractors received all the rich instances these temporary contracts were extended from time to time. T nth, in many instances con tractors have suffered in portions Of the routes
 perform service and to omit service in violation the contracts, whereby they proitsd largely. Elev ent that contracts have been awarded on proposals manifestly and confessed1y irregular and illegal the plea that great saving thereby to be made and within few days or month after the service be gan the pay on routes thus let increased mani fold Twelfth, Contracts have been aparded to cer- tain contractors on illegal proposals and at the letting cont acts were not awarded proposals hav
 ing prec sely the same defects the department hold
 ing that the proposals illegal when the identical defects in other held not to be sufficient ustify rejection. Thirteenth hundreds of con
 tracts have been awarded proposals with the guar
 
 cuted with the sureties known to be frauds. Four teenth that in making extra allowances Serond As ece of the department which had rarely if ever been departed from during than fifty years and vio
 lated the letter and siri of the law by accepting ucient the statements Of contractors to the cost of performing additional service. Fifteenth, there still graver official Shortcomings in the administra
 on of the Sixth Auditors ofice that gross abuses tract office the Postofhce department in the past would have been impossible had the auditor of the ecuted the law with au honest purpose to correct glaring and bring to justice notorious wrong doers Following are some extracts from the report showing the wholesale in which operations are alleged to have been carried out:
 On June 30, 1879, the Star service in Arkansas Cali fornia, Colorado, Kansas, Louisiana Nebraska. Ne vada, Oregon, Texas, Arizona, Dakota, Idaho New Inan TarrtorW' bit +T @ wyoming ana 92So, was swollen to s3 ,997, increase in nous increase accomplished? Extra allowances on the routes controlled by thirteen men added s1,399, competition to the same thirteen men or their repre- sentatives added $16s 6s the reettng of extend ed and new service to begin October 1878, added 47 24s 59. Extra allowances made during the first half of the fiscal year 1s79sO aggregate s761 1885 let during 1s7s in most part to thirteen contractors and their dummies, who obtained the enormous al the same period From July i, 1873, to De cember 31, 1879, there were awarded wi h. put competition to the same men PIT con aggregated s93. .,76O2O. By these allowances and ig qoring the, the eay awards of temporary service and Territories was increased until the per nun January T. lsso was s4 z6s, 5s2 30 The tabular that 4l9 routes, the annual contract pay of which was $404 41l22, were manipulated by Brady and the contractors until this annual pay was increased in thirty months to $2,366, ,581.27 The tabular state ment marked Exhibit Hn shows that during the period 290 contracts for temporary services on routes aggregatng 13,994 miles in length were with out compt ttition awarded to the same favored con tractors and that this service paid for at the rate Of S1,l21,Z2331 annum, al cost per annum of s7,726 In eighteen months 9s of lated by adding trips increasing distances and diting schedules until from annual cost of S762 s5s09 which the original contracts called for the pay increased to S2 723 464 50 per annum an in crease of S1. ,522 A. Brady in almost every in stance violated letter and spirit of the law in making the orders for additional allowances by which few contractors have been receiving more cases of expedition were prior to Brady's term. of rare occurrence. After careful examination of sexpedted routesn by sworn Statements of -tnesses cannot resist the conviction that in almost every case the allowance for expedition fraudulently collusively and oorruptly obtained Sworn state ments of contractors, upon which allowances were made, were frequently false. The number of horses and men alleged to be necessary to perform expedi very much higher than actually nAn1ed FaithIes ss postmasters at the termini roues falsely certified that the arrivals and departures had been accord ance with the schedule fixed by the department. mention some of the most fragrant cases where ser vices were put from weekly to daily and increased from mile and half hour to five miles hour at cost of tens of thousands dollars when f. asked for it. the ca of one route from Canon
 City to Camp McDsrmott, tri-weekly mails were car cou' try, with only abandoned military camp between the terminal offices. Near the eastern established postofce As the family got bt ons o two letters year. the head of the family often asked want to be bothered with making reports Evidence is in our possession to show that the contractor tive pioneer and satisfy him. saying he had already paid him $50 to keep quiet and that he knew fel There was another route in the Northwest over which not one letter carried. The pouch went were nearly worn out In several instances the sub contractors remonstrated with the departnent for ed. The old form of straw bidding had become obso- lete. The new scheme was to obtain contracts and then have the service increased and expedited and the pay thereby enormously increased. This scheme was concocted by an old and experienced contractor He selected eight men to act bidders and equal number to figure as bondsmen. Not one of them owned any real estate to enable them to qualify qua & as bidds s; guaFanteers, contractors lots Philadelphia 1qnd in New Jersey and Virginia As soon as one set went through the form of qualifying bidders, guaranteers contractors bondsmen they reransferred the property to another set and when all were qual fed the property re- conveyed to its rightfm o .ners. Forty-eight bids submitted by these straw bidders contracts awarded twenty three, the faca of the bonds required herewith being ,O0o be secured by real estate valned at S1 O62 0OO aggregate con tract price the twentythree routes was sl27 435
 increased ss2 9.59 being added to the annual pay Five which did not promise we'll gotten rid of before the service commenced and six within a very short time raised from S45, I'll year to SIPS 110 59 year. But when this progress had been made the investigation of 1880 happened and the fight Congress the deficiency bill occurred Some re- ductions made and it began to be difficult to get increases ordered Accordingly there began to be failures Unfortunately for the promoters of the venture the administration which came in March 4th did not believe in winkng at fraud covering crime One of the first subjects to engage atten- tion was the failures of the Philadelphia dummies An investigation followed and in very short time the whole truth was known.
 It is rumored in Treasury and financial circles here that Secretary Folger has direct ed computation to be made to ascertain at what premium the government can afford to purchase and 1-2 per cent. bonds instead of calling 1-2 per cents, and at the same time protect the government from loss. This has been done in view of the fact that 4 1-2's and As are not redeemable until 1891 and 1907 respectively. If the surplus reve- nues should enable the government to call in 3 1-2's outstanding there might be space of time in which there would be no bonds at the command of the government for the use of the surplus revenues