The San Francisco call., 1898-01-15

consumers, were privately advised as to how they might get in on the ground floor.
 Mir McNear of San Francisco, very successful operator in commissions and margins. had 100, 900 sacks set aside TOT him. without presenting at the tune either affidavit or deposit. In fact, he did not have an affidavit covering ap- nlication for so much as a single sack, but. like Mir Diggs, he agreed to send ont into the country to procure them.
 This deal, admittedly made as the re- sult of 2 private conversation between MT. McNear and Warden Hale, left only 150.000 surplus sacks to be dlspos-. ed of at the prison clearing house. Evi- dently MT. McNear, like others, was keeping a pretty close tab on the San Quentin stock. and figuring on the rise to s 40 which the board made on March 2O when they had nothing but the sale of the output to consider.
 With MT. R. Lichtenberg, the San Francisco dealer, similar transactions in larger quantities are recorded. He speaks plainly in his communications of placing the San Quentin sacks. MT. Lichtenberg deals in big numbers 50 900 and 100, 900 at a turn. With ref erence to the sack situation he has private consultation with Mir. Ellis. He is kept closely posted on the condi- ton of the San Quentin supply, and insists on having all the "culls" or so- called imperfect sacks saved for him. His telegraphic orders are regularly booked, affidavit and deposit to follow. The Warden even goes to the length of setting 50,000 sacks aside for him in the State warehouse at $4 75 future de- livery, after the 2,000000 surplus sacks covered by the board resolutions had been disposed of. Notice to this effect was served on MT. Lichtenberg Febru- ary 19-the day before the board met and raised the price to s.
 MT. Fitzgerald, present chairman of the Board of State Prison Directors, and MT. De Pue, the recently retired member, visited The Call office last evening. Both gentlemen asserted that they were unaware of any violation of the Ostrom law, and that the affairs of the jute mill have been managed to the very best interest of the State. While mistakes may have been made, from a business point of view MT. De Pue stated that the board had acted ever with the object in view of making the mill successful and self-support- ing; that any intimations of collision with middlemen or violation of the law to the injury of the farmer, was an out rage of the truth, and that their trans actions are preserved in the records, where any one who chooses may read them. When his attention was called to the fact that goods had been sold in violation of Sec. of the law he ad- mitted having labored under a misun- derstanding as to that clause, and thought it related merely to jute bags.
 MT. De Pue explained the difficulties experienced by the board in selling sacks direct to farmers when the latter were without the means with which to make the legal payments, and thought any business man would approve the course pursued in disposing of the sur plus product to replenish the revolv- ing fund.
 Both gentlemen were indignant at the intimation of wrongdoing expressed by Senator Ostrom, and resented it as wholly undeserved and unjust