New-York tribune., 1901-02-25
OF A CENTURY
LOSSES TO THE GOVERNMENT OF $l6,-
OOO0OO-HOW SOME OF 1T rs
RECOVERED.
[rY rrIEcRArH To TIE rR1RrxE.l ]

Washington. Teb PIN one hundred and ten
years the gross receipts Of the United States
Government have amounted to SD 26633l334S IL.
In that time the Government has lost through
dishonest agents and officials approximately
S16o0n0o0 Gradually portions of these defal-
cations are being collected by Uncle Sans
agents. Occasionally some bondsman of de
,faulter. who failed n make good his pledge,
has a balance due him from the Government
from some contract secured services rem
dered. which is withheld and applied 70 his for
mer Indebtedness. In this way considerable
portion of the SIC ooo0O0 due the United States
is gradually being collected.
Reimbursements were numerous in the Span
sh-American War. 4 number Of men who were
defaulters or who had been the bonds Of dis
honest agents of the Government, secured posi-
tions in the volunteer Army. In cases
their unsatisfed obligations had been running
for a period Of forty years They supposed
that the account had been lost sight Of by Uncle
Sans agents Imagine their surprise when the
paymaster visited their regiments and rendered
them. instead OF their salary. a certificate Of
receipt for the amount Of money due them
which had been applied their old indebted
ness TO the Government In that way a good
many thousands Of dollars were collected u
1895 and 1899
When officers discovered that they we're no
TO receive the cash for their services but merely
a certificet te OF allowance on their old -1dsl..
ness. they usually rendered their destinations
In one case, however, major of volunteers
continued 10 serve until his regiment was mus
tered out. his entire salary being applied 70 the
extinction Of his old debt 10 the Government
while ne merely drew his subsistence allowance.
At the Solicitors Office in the Treasury Depart
ment is kept minute record Of all Government
creditors whose terms Of service has expired.
This record dates hack 10 11S9 II includes not
only list OF defaulters and embezzlers hut
list of their bondsmen we'll In some cases
the amounts small, while in others they ex-
tend into thousands Of dollars. In nearly every
case the defauter had given a bond which
proved worthless insufficient to cover the
amount of his shortage In some not
dollar realized on the bond which had been
accepted by Uncle Sans agents
It is an interesting fact to note that for
twenty years after the organization Of the Gov
ernment there was not single defacaton.
From 1920 10 1910 shortages in the accounts %
the Government officials became numerous
and from 1910 to 1860 there was "A very marked
increase. The ten years from 1860 to 1870 ex-
ceed any similar period, the opportunities for
embezzlements were greater. The Postofice
Department has been since the beginning of the
Government the most opulent field for the de-
faulter. Shortages in the accounts of postmas-
ters from 1920 to 1880 when the system of in
spection became extremely rigid were OF fire.
quent occurrence. In most cases, however the
full amount of the defalcation was collected
from the bondsmen. In about 10 per cent Of
these defalcations, however. the bonds proved
to be practically worthless, and Uncle Sam be-
came the loser. Shortages for small amounts
were usually paid promptly by the bondsmen
but when 1t came to settling for a large amount
II has been more difficult.
So much trouble has been experienced in COM
pelling bondsmen TO make good the amount of
their pledges that the Government has adopted
the policy in recent years of encouraging bonds
by companies organized for that purpose. There
are two advantages in this First, a Federal Off
cial realizes when he has a company his
bond that If there is a shortage in his accounts
there will be no mercy shown him. and that he
must suffer the extreme penalty of the law.
This has tendency to make him careful. Sec
ond the Government has difficulty in exact
Ing the bond from the company, for should there
be any unnecessary delay in payment the COM
pany realizes that IL would secure more Gov
ernment business, and for this reason it is pune
tIouS in settling.
Only few months ago a bonding company
called upon to pay 100000 for a defalca-
tion which occurred in California. Within
twenty-four hours after a full investigation had
been completed, certified check for the amount
sent to the Secretary of the Treasury AL
though the company lost considerable sum
the expense proved invaluable an advertise
ment. In addition to the advantages offered the
Government by having companies as surety for
officials, 1t has been found that the defacations
Of employees giving such security are rare In
the last three years only four defalcations where
companies have been on the bonds of officials
have been reported. AS compared with the de
falcations Of those who gave private bonds this
is remarkable record
The Internal Revenue service from tba haeir
ming of the Government to the present time has
been remarkably free from dishonest officials
Ihere is not case on record in the Treasury
department OF Internal Revenue coIIector
belhs defaulter. Treasury officials are AT a
loss 10 assign reason for this. as the system
OF inspection Is no more rigid, and as the amount
oI money handled by Internal Revenue collectors
| Is greater than that handled by any other Off :
cials of the Government ~ ~