The Montgomery advertiser., 1903-06-06
PURCHASE OF POUCHES
Alleged That McGreg0r and Upton Robbed Government.
Of $1s,ooo Paid Out by the Gov ernment, It is Charged That $S,OOO Went to Those Responsible for the
 Contract.

Washington. June 5.-The grand jury today reported an indictment against Au- gust W. Machen. former superintendent of the free delivery service of the Post office Department. who was arrested sev- eral days ago, charged with sharing profits on government contracts for let ter box fasteners.
 The indictment was brought for vio- iation of Section 5501 of the Revised Stat utes, the penalty for violation of which is a fine of not more than three times the amount asked or accepted or received and by imprisonment to not more than three years"
 The amount which the indictment states he received illegally is $1s9S7.79. MT. Machen was in court with his attor- neys when the grand jury reported and immediately gave bond in the sum of $20,0oO for his appearance in court. His F. M. Crisdell and Emanuel Spefch of this city.
 The trial will occur in October.
 By securing an indictment of Machen before the day set for his preliminary hearing before Commissioner Taylor, the government has scored a victory, in that it has avoided the necessity of showing its hand at a preliminary hearing. The proceedings before the Commissioner now will be abndoned.
 Machen Talks.
 In discussing the case with his friends MT. Machen says that certain checks which it is maintained were sent to him in payment of his profits in the Grof fastener and which have been secured by the postoffice inspectors were sent him by his business partner, George E.. Lorenz of Toledo, O., and fosmerly post master of that city.
 AHr nlo iPoo hal m r. ship with Lorenz was a strictly legih- mate one and that the checks transmit ted to him by LoreRz were in connection with mining business which the firm con ducted Although the amount of these checks cannot be ascertained, Mir. Ma chen says that the one for the largest amount represents a personal loan to himself from Lorenz.
 MT. Machen further states to his friends that he was not a partner of the Groff Brothers concern and that he did not receive any of the profits from the sale of the letter box fastener to the gov ernment. He says that no wrongdoing will be proved against him and that the only possible cause there may be for crit icism of his administration so far as the Croft fastener is concerned is that the price paid for the article may be consid- cred excessive.
 This was necessary, he maintains, be- cause the article was a patented affair and the larger price paid for it was in line with the universal practice m the purchase of articles which are patented and where there is no competition,
 His counsel tonight gave out he follow ing statement:
 Statement of Counsel.
 ''The indictment against MT Machen by the grand jury is such a lengthy docu- ment that we have had no time or oppof- tunity to consider 1t and we therefore cannot say anything about the charges in the nine different counts. At the in stance and under the direction of the authorities a warrant of arrest against MT. Machen was asked for and obtained from United States Commissioner Taylor and a lengthy supporting affidavit was filed in which direct charges of criminal acts were made.
 Upon MT. Machen's arrest we demand ed an immediate hearing which was op- posed by the government, and at the re- quest of the government a continuanc" was had until June 6. MT. Machen and his counsel had evident reason to believe that in the interim no steps would be taken to deny him the preliminary exami- nation to which he was entitled. The authorities responsible for the issuance of this warrant have seen proper to bring the same charges now pending before Commissioner Taylor to the attention of the grand jury The grand jury has. in consequence. indicted MT. Machen before the date fixed for the full hearing before the United States Commissioner.
 Unusual and Unfair.
 If you want the reasons for this pro- ceeding you will have to seek 1t from the prosecution. We do not know. We can only surmise and that much the public can as well do counsel for the de- fense. Suffice 1t to say that the legal effect of this course of policy (which is unusual and unfair, if not unprecedented in this jrisdiction) is to deprive the de- fendant of an open public investigation into the truth of the charges, to which he is fairly entitled and which a sound public policy vuchsafes to him. This action may or may not be technically legal but there seems to have been no necessity for the course pursued. Mir. Machen has all the while been within the Jurisdiction of the court under heavy bond and ready to respond to any process of law. The corse the defendants coun- sel will pursue in tke matter cannot now be made public, but sooner or later. and 1t will be sooner than some people want. the whole matter will be gone into and both sides will be heard where ex parte proceedings will be out of order.
 It Is expected by the Postoffice Depart nent that the grand Jury VIII report on the cases of the Grofr brothers of this city. the contractors for the letter box fasteners early next week.
 Clerks Under Arrest
 As result of the sweeping investiga- ton of affairs at the Postofice Depart ment, Thomas w McGregor. clerk in charge of the supplies for the rural free delivery service and c. Ellsworth Upton of Baltimore one of McGregor's assist
  of conspiracy with Charles E. Smith of Baltimore to defraud the government in the purchase of the leather pouches fur nished the rural carriers throughout the country Their cases make seven arrests in all since the investigation began. 9th CT arrests are expected later.
 The story of today's arrests is best fold in the following official atateunant