The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1903-06-06
TWO MORE ARRESTS
FOR ALLEGED FRAUDS
BristoW Mill Grinds Out
New POst0ffice Grist.
SUBoRDlNATES or MACHEN
T. w McGregor and C. E. Upton
Charged With Conspiracy and Fraud
Alleged Gain, $4,000 Each.

The following statement was issued
late yesterday afternoon by J. L. Bris-
tow, Fourth Assistant Postmaster Con
eraI:
Thomas w McGregor and C. Els
worth Upton were arrested this after
noon upon warrants sworn out in Bal
timore by Inspectors J. D. Sullivan and
r, D. Simmons. charged with con-
spiracy; With Charles E. Smith. and
others. TO defraud the United States
Government in The purchase of pouches
from C. E. Smith. OF Baltimore. The
complaint sets forth that McGregor and
Upton agreed with Smith to obtain for
him orders for many thousands of leath-
er pouches, such as are used by rural
letter carriers. The price agreed upon
was so cents per pouch; the actual value
was less than so cents. Smith was 10
pay 10 them the difference between 80
and 80 cents per pouch. It is stated
at the department that the actual num-
her of pouches which were purchased
exceeded 10000, for which the Govern
all. Smith received and retained of this
for his own use $4,000. The remaining
$S,e00 was paid to McGregor and Up
ton. The Government could have bought
the entire number of pouches from the
manufacturers Tor $4,000"
Both Men Arrested.
McGregor was taken before United
States Commissioner Taylor and re-
leased on $1,000 bail Upton is a resi-
dent of Baltimore. and preferred to be
arrested in that city. as he could more
easily arrange for bail there than in
Washington. He was taken to Baltimore
by two inspectors and locked up in the
Central police station. Both cases will
be heard before United States Commits
sioner Rogers, in Baltimore, Thursday
next.
John C. Rose. United States district
attorney at Baltimore. was in Washing
ton yesterday comforting with Mr. Bris-
tow about the arrests. II is alleged that
the money which caused the arrests was
paid in Baltimore, and that the scheme
was worked out there. 1t is not thought
that the C. E. Smith who is alleged TO
have been involved in the transaction
viii be arrested at present. There is
feeling among the inspectors that
Smith may be induced TO tell things
which viii be OF service TO the depart
ment in prosecuting McGregor and Up
ton, and in unearthing the system by
which blaekrnail was levied upon Post
Office contractors.
A Tribute to Machen's Discernment.
McGregor was appointed from Nebras-
ka in 1891 as messenger in the free
delivery division under Mr. Machen. The
latter early professed to see great pos
sibilities and abilities in McGregor and
rapidly pushed him to the front From
messengers work MeCregor was trans
ferred TO clerical work, for which. it is
said, he was not well fitted at the time
Encouraged by Mr.. Machen. he applied
himself assiduously. and was advanced
from one position to another until, at
the time of his arrest, he was chief of
rural free delivery supplies.
Mr.. Machen frequently boosted that
McGregor was his creation; that he de-
teeted his latent ability; that. hut for
him the Nebraskan would still have been
messenger, and that <MeGregor' s rapid
rise was a distinct tribute to his dis
comment. Upton was an order clerk
under McGregor and was appointed from
Maryland in 1890.
Sent Dummy Letter.
One of the devices used by the inspec-
tors in working up the case was to send
a dummy letter TO the manufacturer OF
the pouches asking for bid Not sus-
pecting the origin OF the, letter, the firm
replied that he would be,pIeased TO de-
liver them in large lois at 80 cents Der
pouch. When the inspectors read this
letter and comparedsit with the 9O-cent
rate paid by the department they con-
Guided that the time for action had ar
rived.
Inspector NJ. C. Fosnes. who is tenn
rorarily in charge of the division. is
counted the ablest and most relentless
fiaud exposer in the department. if not
In the Government service. His special
~ is the handling of Just such cases as
these OF McGregor and Upton, cases in
yclving contracts secured in violation
OF the law or by collision between de-
pertinent officials and people without
tic department. He is a tireIess worker
snc has been given some of the keenest
and most industrious of the inspectors
to assist him.
"Going Down the Line"
The manner in which the inspectors
are going down the line is worth
watching. IN view OF the methods OF Mr.
Nachen in controlling his division The
ex-superintendent is alleged to have
boldly declared on several occasions that
anybody who baked at his authority in
any way. or refused TO do his slightest
bidding, would lose his position When
mutterings against his methods or trans
actions reached his ears. he fatty an
nounced that he would cut OF the Of
fetal head of the grumbler if silence
were not restored Immediately. People
90 to much trouble to secure Govern
ment positions; good Jobs are scarce.
and the threats of Ar. Maehen were suf-
acient TO stop complaints.
Mr.. Fosnes yesterday abolished the
Western division Of special agents of