The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1903-06-06
CHECKS WE'RE FROM
BUSINESS PARTNER
He Says It Was Strictly Legitimate
Transaction and that Sums Received
Represented His Share in q
Mining venture-More
Arrests Are
Made.
nv Associated Press.

\ WASHINGTON, d. c.. Juno 0-1ThA
grand jury today reported an Indictment
against August w. Machen. former su-
perintendent of the free delivery service
of the Postofflce Department, who was
arrested several days ago charged with
sharing profits on government contracts
for letter box fasteners.
Two moro arrests were made to-day
in connection with the investigation OF
affairs at the Postofl1ce Department
Thomas w. McGregor. q clerk In Charge
of supplies for the rural free delivery
service. and c. Ellsworth Upton. OF Bal
timore, ono OF McGregor's assistants.
were to-day arrested on the charge of
conspiracy, with Charles e, Smith, of
baltimore, to defraud the government in
the purchase of the leather pouches fur
nished the rural carriers. Their cases
make seven arrests in all since the in-&
vestigation began. Other arrests are ex-
pecteG later.
brought for violation Of section 55M Of
! the Revised Statutes. the penalty for
violation of which IS d fine mot more
| than three times the amount asked, or
accepted, or received, or by Imprisonment
not more than three years. The amount
which the Indictment finds he received
Illegally is S1S,9S7.79.
Mr.. Machen was in court with his at
torneys when the grand jury reported,
and Immediately gave bond in the sum OF
$201 for his appearance In court. The
trial will occur in October.
BY securing an indictment against Ma
chen before tom orrow, the day set for
his preliminary hearing before Commis
sioner Taylor, the government has avoid
cd the necessity of showing Its hand at
a preliminary hearing. The proceedings
before the commissioner will now be
abandoned
Strictly Legtimate.A
In discussing the case with his friends
MI. Machen explains that chetks which
1t is maintained We're sent to N1achen II,
pa yment of his profits in the Croft fas-
| ltener were sent him by his business part
ner, George e, Lorenz, OF Toledo OHIO.
who was formerly postmaster at Toledo
Mr. Machen claims that his partner
| ship with Lorens was a strictly leg1ti-s
| mate one. and that the checks We're IN
| connection with the mining business
the one for tho largest amount represents
personal loan from Lorenz.
Mr.. Machen further says that he was
not partner of the Croft Brothers and
that he did not receive any of the profits
from the sale of the letter-boX fasteners.
He adds that the only possible cause
there may be for criticism of his admin
Istration so far as the Croft fastener Is
concerned Is that the price paid for the
article may he considered excessive. This
vas necessary, he maintains. because the
article was patented affair.
Counsel Make Statement.
Ills counsel tonight made a statement.
| saying;
Upon Mr.. Machen's arrest we demand
eo an immediate hearing. hut at the re-
quest OF the government a continuance
was had until June 9Th. Mr.. Machen and
his counsel had every reason to believe
that no steps would be taken to deny
him the preliminary examination The
authorities responsible for the issuance
of this warrant have seen proper 70
bring the same charges now pending be-
fore Commissioner Taylor to the atten-
ton of the grand jury. The grand jury
has In consequence indicted Mr Machen
before the date fixed for the full near
Ing before the United States commission
er II you want the reasons for this pro-
ceedihg You Will have to seek II from
the prosecut,on We do not know. Suf-
flee 1t to say that the legal effect OF
this course OF policy (Which Is unusual
and unfair. II not unprecedented IN THIS
| tudication) is 10 deprive the defendant OF
| an open public Investigation into the
| truth OF the charges, to which he Is fairly
| entitled, and which a sound public policy
vauchsafes to him"
Leather Pouches
The complaint against McGregor
and Upton sets forth that Nc
Gregor and Upton agreed with Smith to
obtain for him orders for many thou
| sands OF leather pouches, such as ara
used by rural letter carriers. The prics
agreed upon was so cents per pouchi the
actual value was less than fifty cents,
| smith was to pay them the difference
between ninety and fifty cents per pouch.
| 1t rs stated that the number of pouches
| purehased is 10000. for which the gov
ernmen, paid ninety cents each, or SIS
600 In ALL Smith received and retained
of this for his own use $1,000, The r4t
| mainlng $500 was paid to sIcGregor ard
| Upton. The government could have
bought the entire number OF pouches,
| from the manufacturers for IS, 600
MeCiregor has been IN the postal SER
| vice since 1891. He came from Neoraskt
as a messenger, and subseauently was
promoted TO clerkshtp, and finally was
lappointed by Mr.. Machea In charge of
| the supply work os the rural free tey
livery service Mr.. Upton Is p saisf-
merean. ANA has been In thc postal SER
l ,,,ca for thirtaAn YEARS Both tina men