Omaha daily bee., 1903-06-06
TGREGOR or NEBRASKA IS ARRESTED
he and Ellsworth Upton Are Involved by
the Investigation.
IS cONsPlsNG TO DEFRAUD
Inspectors Allsge OrOOkedness in Buying
Pouoher.
SUPPOSED RAKEoff AMOUNTS TO $4,000
BristOVT Says that sum was Paid Nc.
EreROr and Upton for Participate
ing I'm a s172.OOO steal from
the Government,


WASHINGTON, June 6.-The grand jury |
tocay reported an indictment against Aug !
US. w, Machen, former superintendent OF |
the free delivery service OF the Postofflce |
department, who was arrested several days |
ago, charged with sharing profits on gov |
ernment contracts for letter box fasten- |
srs. The indictment was brought for vio-
lauon OF section 550l OF the revised statutes. |
the penalty for violation OF which is a
nne Of not more than three times the
amount asked OF accepted or received, ana
imprisonment for not more than three |
years. The amount which the indictment |
states he received Illegally Is SIs.gS.7s
AZ an Incidental result Of the investiga- !
ton Thomas w. Meqregor, formerly OF
Nebraska, I'm charge Of the matter of rural
delivery supplies for the Postofiice depart |
ment I'm Washington. and G, Ellsworth Up
ton. one OF his ASSISTANTS today were ar
rested on warrants sworn out by postofice
inspectors, The charge is conspiracy to de-
fraud the government I'm the purchase OF
pouches from G. e. Smith OF Baltimore
Mr., Machen was in court with his at
torneys when the grand jury reported in
his case and Immediately gave bond in the
sum Of ~, 900 for his appearance. His sure
ties were c. C. Staples, David Moore, II.
NJ Crlswell and Emanuel shech of this
city. The trial will take place In October,
Eject of the Move.
BY securing an indictment OF Machen be-
fore tomorrow, the day set for his prelm-
mary hearing before Commissioner Taylor,
the government has avoided showing it's
hand at a preliminary hearing. The pro-
oeedings before the commissioner will now
be abandoned.
=
Mr. Machen says that certain checks which
Il IL maintained were sent TO him in pay
ment OF his profits in the Gron fastener,
and which have been secured by the Post
office inspectors, were sent him by his
business partner, George f. Borenz, of To-
tedo, o.. formerly postmaster OF that city,
Mr.. Machen insists tina. his partnership
with Lorenz was a strictly legitimate one
y and that. thA rlsepsr strahEnittei - hlEsl BY
Lorens were In connection with the mining
business which the firm conducted. Al
though the amount of these checks cannot
bo ascertRined. Mr. Machen says that the
enc for the largest amount represents a
personal loan TO himself from Lorenz.
Mr.. Machen further states to his friends
that he was not partner In the Grofr
Bros. concern and that he did not receive
any OF the profits from the sale OF the let
ter box fasteners TO the government. He
says that wrongdoing will be proved
against him and that the only possible
cause there may be for criticism OF his
administration. SO far as the Gron fastener
Is concerned. Is that the price paid for the
article may be considered excessive, This
was necessary, he maintains. because the
article was patented affair, and the larger
price paid for It In line with the uni
versal practice in the purchase OF articles
which are patented and whore there is no
competition,
His COuasePs Statement.
His counsel tonight gave cut the follow
Ing statement,
The Indictment nga.nst Mr. Machen by
the grand Jury Is such lengthy document
that we have had no time or opportunity
to consider 4 and we cannot. therefore. say
ANYTHING about the charges In the nine
the direction OF the authorities a warrant
OF arrest against Mr., Machen was asked FOR
onep TaSo ma
afldavit was nled, in which direct charges
o. q criminal ,aSt acts " were made, Upon Mr.
hearing, which was opposed by the govern
ment. and at the request Of the govern
G. Mr. Machen and his counsel had evi-
dent reason TO believe that IN the INTERN
preliminary exareinstio TO which he was
entitled. The authorities responsible for the
issuance OF this warrant have seen proper
10 bring charges now nending before Com
missioner Tavlor 10 the attention of the
grany Jury. The grand jury has. In conse-
date nxed for the full hearing before the
commissioner II you want the reasons for
from from pe'TG the Prosec1tion. We do not know,
We can only Eurwise, and that much the
defense sufnce Il 70 say, the legal effect
OF this course Of policy (Which is unusual
nq HHs n ~ not aepPTe p2pTeffaef tSs defsnd n
an open public herring. 20 which he Is fairly
entitled and which sound public policy
may not be technically legal. but there
seems 20 have been no necessity for the tn,
the while within the Jurisdiction of the
court, under heavy bond and ready TO re-
the defendnnt's counsel viii pursue ia the
matter cannot now he wade puhhc, but
sooner or later, ana ~ wiz b ne soefTr ,ottsr vii,
be gone into and both sides viii be heard
whe~e exparte proceedings will be out OF
order.
n Is expected by the Postofice depart
Tnent that the grand jury will reach the
cases OF the Gron Bros. the contractors
for the letterbox fasteners early next
week.
Against McGreEOF ana Upton.
As result OF the sweeping investigation
OF anairs at the Postofnee department.
Thomas w. McGregor clerk In charge OF
the supplies for the rural free delivery
system. and c, Ellsworth Upton OF Balu-
more, one Of McGregors assistants today
were arrested on a charge OF conspirlng
with Charles r. Smith af Baltimore TO
defraud the government In the purcha Sc
OF the leather pouches furnished the rural
carriers throughout the country,
These cases make seven arrests I'm all
since the investigation began, Other ar
rests are expected later, The story OF to-
days arrest Is best told In the following
statement given out by Fourth Assistant
Postmaster General Bristow this evening;
Thomas W, McGregor and c. Ellsworth
Upton were arrested this afternoon upon
warrants sworn out in Baltimore by In
spectors ]. ID. Sullivan and r., D. Simmons,
charwed with conspiracy with Charles Il.
Smith and others 20 defraud the United
States government IN the purchase OF
pouches from c. r Smith Of Baltimore.