The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-06-06
HeREaoR AND UPTON ARRESTED.
They are Charged With Conspiracy to Defraud
the Government
(By the Associated Press.)

Nby tue ASSOcldJeQ PfeSS.)
Washington, June 5.-As a result of thC
sweeping investigation of affairs at tbs
Postoffice Department, Thomas w. Me
Gregor, a clerk in charge of the supplies
for the rural free delivery service, and c.
Ellsworth Upton, of Baltimore, one O.
McGregor's assistants today were arrest
ed on the charge of conspiracy, with
Charles E. Smith, of Baltimore, to de-
fraud the government in the purchase oi
the leather pouches furnished the rura
carriers throughout the country Their
cases make seven arrests in all since tn
investigation began. other arrests art
expected later.
The story of today's arrests is best told
in the following official statement given
out by Fourth Assistant Postmaster Gen
eral Bristow this evening:
Thomas w. McGregor and C. Ellis
worth Upton were arrested this afternoon
upon warrants sworn out in Baltimore by
Inspectors j. d. Sullivan and R. d. Sim
mons, charged with a conspiracy, with
Charles E. Smith and others, to defraud
the United States Government in the pur.
chase OF pouches from c.. E. Smith, Of
Baltimore. The complaints set forth that
McGregor and Upton agreed with Smith
to obtain for him orders for many thous-
ands of leather pouches such as are used
by rural letter carriers. The price agreed
upon was 80 cents per pouch; the actual
value was less than SO cents. Smith was
to pay them the difference between ninety
and fifty cents per pouch. 1t is stated at
the department that the actual number
of pouches which were purchased exceeded
10000 for which the government paid
ninety cents each or $4,000 in all Smith
received and retained of this for his own
use $4,000. The remaining $4,000 was
paid to McGregor and Upton The gov
ernment could have bought the entire
number of pouches from the manufac-
turers for sS.O00''
MeGregor has been in the postal SER
vice since 1897. He came here from Ne
braska as a messenger and subsequently
was promoted to a clerkship and finally
was appointed by Mr.. Machen in charge of
the supply work of the rural free de
livery service. Mr.. Upton is a Balti-
morean, and has been in the postal SER
vice for thirteen years. Both the mon
arrested are married. They were taken
into custody at the Postoffice Department
shortly before the close of office hours.
Upton asked to be taken before COM
missioner at Baltimore instead of in this
city. because of his wider acquaintance
there and better opportunity for securing
bail. Accordingly he was taken to that
city by two postoffice inspectors shortly
after six O'Clock this evening. McGregor
was taken to the office of United States
Commissioner Taylor.
McGregor has been under the close sur
veillance of the inspectors for weeks. and
has been subjected to a close examination
for several hours a day during a part of
that time. The inspectors say that today
they completed the evidence they wanted
before taking decisive action.
Postal officials after the arrests would
not say whether their investigations in
any wise imrl;-~4oS Mr. Machen. who was
general superintendent of the system
with the alleged transactions occurred. in
the present matter. Fourth Assistant
Bristow when asked a question on this
point declined to answer, saying that tbe
statement made public comprises all the
department cared to give out on the suo-
ject at this time. Mr.. Bristow also de-
chned to say what action was likely to
be taken in the case Of c. E. Smith, the
Baltimore contractor who is named in
connection with the case. Mr. Bristoyv
said, however, that the two arrests close
the case for the present.