The Republican. [volume] (Oakland, Md.) 1877-current, 1890-08-01
TREASURY FRAUDS.
Many Have Been Attempted, But Not
One Proved Success.

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application for the reissue of lot Of
coupon bonds alleged to have been de-
stroyed. The claimants proved the facts
as clearly as human testimony could
that these bonds, each with six coupons
attached, were deposited in locked
mailbag in Frankfort, transported to
Liverpool, and there delivered into the
hands of an agent of the post-ofiice on
board a steamship which was wrecked
by collision, and went, with all its mails,
and all but two or three of those on
board, to the bottom of the sea. The
completeness of the evidence was itself
source of suspicion, and, much to the
chagrin of the claimants, Secretary
Chase affirmed The decision of bureau
officer that the duplicates should not be
issued except by the direction of Con-
gress. On the application of the claim
ants at the next session, Congress
duplicates. The claim was again pre-
sented with the act, and the duplicates
were demanded. The same bureau
officer again represented his suspicious
to the Secretary, and, with the sanction
of the latter, the present regulation
was adopted, interposing a delay of
twelve months after proof of the claim
before the actual issue. This rule was
vehemently assaulted by the claimants
through the press; they even charged
the officer with Intentionally multiplying
the authority of Congress.
At this time the coupons of bonds re-
deemed were in packages in the Regis
ter's file-room. There was little need
of their examination, and no attempt
had been made to arrange them in con-
secutive order. Books were now made
with one page appropriated to each bond,
and a space for each coupon, while a
force of clerks was detailed to place
each redeemed coupon in it's appropriate
space. -,
At the expiration of the year uno
claimants came for their duplicates.
They were assured that they would now
be issued unless some satisfactory reason
could be shown for further delay. The
books were sent for, and in their proper
spaces were found all the coupons which
had been proved to have sunk to the
bottom of the sea! A few months later
the bonds themselves were presented
for redemption and, no adverse claims
being made, they were paid.
What was the explanation of this
mystery? l do not know. The pressure
of official duties and the anxieties Of
war which occupied us so necessarily
prevented any further investigation,
and the inquiry will probably never be
answered. r-
The next fraud which l recall was a
success as far as the department was
concerned. The loss of the money was
prevented by an accident.
The course of proceeding for the col
lection of claim for army supplies was
usually this: The contractor made his
collections through his banker. His
monthly account was made up in con-
formity with all the rules of the War
Office, and transmitted to that Office
with letter of directions where the
| draft should be sent. The War Office
approved the claim if correct, and trans
mitted the account, the letter, and the
action of the War Department to the
Secretary of the Treasury, by whom it
was sent to the proper auditor, whose
duty it was to audit the claim. If he
decided that the claim was a proper
one, it was sent to the Comptroller, who
revised the action of the auditor, and, if
correct, approved it, sending the ac-
count with the accompanying docu-
ments to the Secretary, who issued the
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was countersigned by the Comptroller,
and entered on the books of the Regis
ter; the Treasurer then drew his draft
upon one of the repositories for its pay
ment, and the draft was sent by mail
according to the original letter of in
struction, which constituted one of the
file papers. The file was then sent to
the Registers fle-room, and there re-
manned. 1t comprised all the papers,
showing complete history of the
| transaction.
On the occasion in question the CASH
Ter of one of the Washington banks
came to the Office of the Register with
draft just issued for more than $50, 600,
payable to a well-known Massachusetts
contractor, and regularly endorsed. 1t
had been presented by the head porter
of Wizards hotel, a reliable man, who
said that the payee was i'll and unable
to leave his room. He had therefore
requested him to collect the draft in
notes, if possible, of $1,000 each. With
out any apparent reason the cashier
said his suspicious were excited, and he
went with the porter to the hotel to see
the payee, and be sure that the transac.
ton was all right. But the sick gentle.
man had disappeared. He had probably
watched the porter, and finding tina,
there was delay in the payment, had
vanished.
The file was sent for, and the letter
found directing that the draft be sent
to the contractor at Wizards hotel.
He was communicated with by tele.
graph, and said that the letter was a
forgery. He had given the same direc.
tons in this case as in his former col.
lections.
This fraud was consummated by an
outsider with the assistance of a clerk
in the treasury. No outsider could
have obtained access to the files in
order to remove the true letter and sub
stitute the forgery. Such fraud could
not be prevented by any system. For