Evening star., 1925-03-03
Declares Bureau IrreguIarity
Charges as Far From Prov
en- as in 1920.
SAYS YEARS OF SEARCH
FAILED TO SHOW GUILT
Committee, With Two Dissenting,
Recommends Comprehensive Audit
of the National Debt.

Secretary Mellon in letter to
President Coolidge today informed
the Executive that the Treasury's
"accusers" charging irregularities in
the handling of Federal securities
remain 'as far now from proving
their charges as they were in 1920"
The Secretary added that with the
exception of petty theft involving
some $4,000 in bonds, the two and
one half years of investigation by
Charles B. Brewer, Department of
Justice agent, and the more recent
investigation by special House COM
mittee had developed nothing further
than reiteration of the original
charges made in 1920 by J. w. Nc
the Treasury
The letter is as follows:
There has been submitted to Con-
gress majority report of the spe-
cial committee appointed under
House resolution 231 (Sixty-eighth
Congress. first SESSION., to investi-
gate matter relating to Government
bonds. One member of the COM
mittee. Representative Strong of
Kansas, has filed a minority report,
expressing complete disa greement
with the committees findings. The
chairman of the committee, Repre-
sentative McFadden of Pennsylvania,
has filed a separate report.
No New Information.
The committees report. for the
most part, is hardly more than a
repetition of charges made by Mr..
Charles B. Brewer, a special assist
ant TO the Attorney General, in a
report to the Attorney General, dated
January Is, 1924 Mr.. Brewers
charges We're, in turn, substantially
repetition of charges made in 1920
by Mr.. J. w. McCarter. former as
sistant register of the Treasury under
the Democratic administration.
These charges are familiar to you,
to membe. of Congress and to the
public generally. l shall not repeat
them in this communication. Briefly,
they allege that fraud has existed in
connection with Government bonds.
When the charges were made by
Mr.. McCarter, in 1920, Secretary Hous-
ton thoroughly investigated them
and publicly stated in two letters,
dated September 2S, 1920, that they
were without foundation.
MIR. McCarter again presented his
charges in April. 1921, to a member
of Congress. by whom they were re-
ferred to the Department of Justice.
1t was at this time that Mr.. Charles
3. Brewer, a special assistant 10 the
Attorney General, began his actiy-
tiles.
Says Irregularities Improved.
'aAIr. Brewer devoted nearly 3 years
70 an investigation of the McCarter
charges, and during that period made
several reports TO the Department of
Justice which indicated, in substance,
that he suspected irregularities but
could not prove them. In these in
terim reports he usually included an
appeal for more time in which to de-
termine the facts. In October, 1928,
after 2k years had elapsed and Mr.,
Brewer still claimed his inquiry
was incomplete, you designated Mr..
Charles G. Waehburn, an attorney-at-
law of Worcester, Mass, as your per-
sonal representative to consult with
Mr.. Brewer and to ascertain what
facts he had developed. The situa-
ton, as disclosed by Mr.. Washburn'
study of the matter was much the
same as in preceding. years. Mr..
Brewer stated that he had not de-
veIoped all the facts, and that he
desired more time to present his
proof
'Mr. Washburn advised you of the
situation, and Mr. Brewer was given
three additional months in which to
complete his investigation. Having
already spent two and half years
on the matter, certainly it was rea-
sonable to suppose that this would
be sufficient to enable him to finish
any remaining phases of his work.
Accordingly, it was arranged between
Mr. Brewer and Mr.. Washburn, that on
January Is, 1924, Mr.. Brewer should
submit his final report.
Mr.. Brewer filed a report with the
Attorney General under date of Janu-
ary Is, 1924 1t contained no evidence
which could in any wise be construed
as a justification of the charges. AS
an investigator of the Department of
Justice, it was Mr.. Brewers duty to
ascertain and determine whether the
charges were true or untrue. he did
neither His report was merely
reiteration of the charges, with en-
bellishments, and with the comment
in each instance that further fnvest-
cation would develop the facts.
Calls Charges Absurd.
mfr. Brewers report was .eferred
to the Treasury, and in my letter to
you of April 26, 1924, l answered in
detail all his specific charges. l stated
then, and l repeat here, that there
have been no fraudulent Implications
or overissues of the public debt, and
that the charges are absurd. There
were some mechanical and clerical
errors in the preparation and record
ing of the enormous volume of war
time securities, and there were some
petty thefts of retired securities from
the files. The mechanical and clerical
errors did not result in any loss to
the Government, while the thefts of
retired securities from the files have
involved a loss to the United States
of only s13,100 out of approximately
s1O0, 100000, 900, principal amount of
securities retired by the register of
the Treasury during the period 1917
to 1922. Any fair-minded person will
agree that this is a remarkable rec
ord The wonder is that, considering
the frailty of human nature and the
war time conditions under which
most of the work was performed, the
errors were so few and the actual
losses to the United States so insig-
nificant.
"In March, 1924, nearly a year ago,
the House of Representatives passed
a resolution authorizing a special
committee of five members to inves-
tigate the Brewer charges. While the