Evening star. [volume] (Washington, D.C.) 1854-1972, 1909-08-06
INQUIRY INTO BONDING
Congress Commission Investi-
eating Alleged Extortion.
RATES ARE TO BE FIXED
Cost and Losses to Companies to Be
Uncovered.
MR.. GALLINGER Is CHAIRMAN
He Says That It Is Proposed to Get
at Facts and Legislate
Accordingly.
[R. GALLINGER Is CHAIRMAN

Uncle Sam hasn't finished with the
| bonding companies which. it is charged,
have combined to raise the rates to bond
ed government officials and, in fact, or
ganiZed a bonding trust, of which the fed
eral government is the intended victim.
| A special commission representing the
\ Senate and House was organized this
morning in the rooms of the Senate COM
mittee on appropriations. whose duty 1T
will be to examine into this question with
absolute thoroughness between now and
the next session of Congress, with view
| to legislation fixing the rates which these
companies may charge government en-
ployes.
| is Senator Gallinger of New Hampshire,
| a member of the Senate appropriations
committee and the chairman of the DIS
| trict committee. Representative TaWney
preparations committee. is the vice chair
man. Clerk Courts of the House appro-
priations committee has been appointed
secretary.
Statistics to Be Gathered.
Expert auditors and other assistants
will be employed this summer to examine
into the affairs of the bonding companies
as far as possible and more especially
to find out just what rates have been
charged government employees for the past
fifty years and the percentage of loss IN
Cured by the bonding companies.
| In this way it is hoped to arrive fairly
at the rate which should be charged by
these concerns. If it is discovered that
the prevailing rates are too high the COM
mission will recommend to the two
branches of Congress legislation fixing
the limit which may be charged govern
ment employees requiring bonds.
The question of legislation affecting the
so-called bonding trust has been before
the appropriations committees OF the
House and Senate for some months. 1t
became known that the rates were re-
Gently Jumped by from 800 to 400 per cent,
and In one or two cases Congress was
asked to increase salaries of government
officials in order that they might meet
the increased payments due the bonding
companies.
Provision Aimed at Trust.
This phase of the question. touching
as it did the pocketbook Of Uncle Sam.
was given the serious attention it merit
ed without delay. After a number OF
hearings at which the bonding COM
panies and the government employees
We're represented. the House committee
on appropriations inserted in the urgent
deficiency bill, enacted just before the
close of the special session, provision
aimed at the bonding trust
ID
by a federal employee on bond above
an increase of 80 per cent over the rate
which prevailed in 1908. 1t further pro-
vided that in no case should the govern
ment pay for these bonds itself.
The Senate struck this provision out of
the BILL the appropriations committee OF
that body believing that no limit should
be placed without a most careful invests
cation of the entire question. chairman
Tawney, however, held out firmly for
the House provision and the other House
conferees stood Loyalty by him. After
lot of Wrangling an increase of 30 per
cent was compromised on, and the rest
of the provision left intact. In that form
the provision became law, and is now
m the statute books.
It was during this period of Wrangling
in conference that it was decided to in
stitute the proper sort of an investiga-
ton, and when Congress got the tariff
bill out of the way no time was lost in
getting down to work.
Facts to Be Ascertained.
I'VE propose to find out the exact situ-
ation,'' said Senator Galinger this after
noon. 1--WE will employ expert assist
ance and take time to do it right. By
the time Congress convenes next Decem-
Der we expect to know whether the bond
ing companies were justified in increasing
| their rates so greatly. If they were not
we will recommend legislation that will
|
nothing further.
1T has been said that the bonding COM
panes have suffered heavy losses outside
| of the government business, and are try
| ing to recoup at the expense of the gov
eminent employees. That may be. but l
hardly think they could have had any
losses that would even give them the sem
| blance of an excuse of that kind, If such
a situation could be called an excuse.
Senator Gallinger will not be here him
self to conduct the investigation this sum
mer. as he is going abroad member
| of the national waterways commission
next week to remain until next October,
but the assistants of the committee will
carry forward the work under the direc-
ton of Vice Chairman TaWney and Sec
rotary Courts of the special commission.