Democratic Sentinel, Volume 4, Number 35, Rensselaer, Jasper County, 8 October 1880 — CHESTER A. ARTHUR, [ARTICLE]

CHESTER A. ARTHUR,

candidate for vice-president. Corruption in the New York Custom-house —Suspension of Arthur for Dishonesty and Inefficiency in his Office by R. B. Hayes—Extracts from John Sherman's Letter Transmuting Reports upon Arthur’s Maladministratum. . Treasury Department, January 15, t 879. “ The Hon. William A. Wheeler, President of the United “ Slates Senate: Sir: I have the honor, by direction of the President, to ti\\smit to the Senate inclosed official reports to this Derelating to the abuses and irregularities in the New York Custom-house, and bearing upon the nominations pending in the Senate of Edwin A. Merritt, tor collector of customs at the Port of New York, in place of Chester A. Arthur, suspended: and of Silas W. Burt as natal officer at that.port in place of Alonzo B. Cornell suspended. I beg to add a fuller statement of the causes that led to these nominations and suspensions than appears upon a public record. “The management of the Customs Service has for several years been open to much criticism in Congress, in the press, and in popular and business circles, founded upon alleged arbitrary abuses, by the officers, and upon undervaluation and frauds. When I entered this office, I determined to make a full examination into these allegations, and into the existing methods of conducting the customs business, with a view to economy and reform, upt only at New York, but at every other p<srt of the United States. “ The President took great interest in the matter, and heartily supported the measure proposed. The examinations were made mostly by committees of private citizens, and resulted in a large saving and many reforms.” * » « « « » ♦ ♦ * “The Jay Commission, consisting oftwo eminent citizens of New York and one officer of the Department of Justice, made a very full and elaborate examination of the methods of business in the Custom-House at that port, and their repo-ts, copies of which I have the honor to send you, show great abuses, v

“ It appears from their first report, that in May, 1877, there were in the collector’s office 923 persons, in the naval office 81, and in the surveyor’s office 32, .making in all 1,036 permanent employees in the Custom-house, exclusive of the appraiser’s department, consisting of deputies, clerks, inspectors, weighers and gaugers, and that this number could be safely reduced 20 per cent. This reduction of 20 per cent, was opposed by Collector Arthur. “The second report shows that it was a common practice among entry clerks, withdrawal clerks, liquidating clerks, weighers, gaugers, inspectors and storekeepers to receive from importers and brokers Irregular fees, emoluments, gratuities and perquisites in the nature of bribes. This practice was a matter of general notoriety tn the Custom-house, and it does not appear that any effort was made by the collector, naval officer or surveyor to suppress it.” “ The third report shows that the gravest irregularities existed in the department of weighers and gaugers; that the larger number of the thirteen weighers and eight gaugers rendered but little, if any, personal service to the government; that the weighers’ fireman performed but little service: that the weighers’ clerks, in some instances, performed no duty ; that in most, if not all, the weighers’ offices men were hired as employees, and assigned to do the work of the regular clerks; that the number of laborers thus assigned varied from four to eight persons in each weigher’s office ; that the men so assigned had but little duty to perform; that persons were borne on the pay-rolls as laborers as a reward for political services, who performed no service except to sign their names to the rolls and receive their pay; that a part of the weighable merchandise was not weighed by the government officers, but by cijy weighers, who furnished memoranda upon which the United States’ weighers rendered their returns; that a part of the weighable goods were not weighed at all, but the marked weight on the packages were copied off ana returned by the weighers as if weighed; that the weighers had adopted the schedule of Irregular fees, which they illegally collected from merchants for special returns and copies of weights, delaying to make returns to the Customhouse until the importers paid these irregular fees; that by reason of these irregularities the cost of weighing and gauging imported goods at the port of New York had increased to the Enormous sum of $346,524.80 per annum. “ These evils were known to Collector yet he made no attempt during his term of office to remedy them.” “ Daring the period of his (Arthur’s) service, his compensation amounted to $155,860.36, a detailed statement of which is herewith transmitted. An officer, charged with the high duties of the collector of the port of New York, and receiving such compensation, ought properly to be held responsible for all abuses that grew up or continued during his term of office; and the existence of such abuses is sufficient, if within his power to correct them, to justify his removal. “ The President was strongly of the opinion, upon the reports of the Jay' Commission, that the public interest demanded a change in the leading offices of the New York Custom-house. I preferred to try to execute the reforms proposed with Mr. Arthur in office, rather than a stranger. The .President acquiesced in this view, but gradually it becariie*evident that neither Mr. Arthur nor Mr. Cornell was in sympathy with the recommendations of the Commission, ana could and did obstruct their fair execution.”

“I have the honor to be, very respectfully, John Sherman, Secretary.” “To the Senate of the United States : I transmit herewith a letter of the Secretary of the Treasury, in relation to the suspension of the late collector and naval officer of the port of New York with accompanying documenta. la addition thereto I respectfully submit the following observations: “The Custom-house in New York collects more than twothirds of all the customs revenues of the government Its administration is a matter not only ofa local interest merely; "but is of great importance to the people of the whole country. For a long period of time it has been used to manage and control political affaire. “ The officers suspended by me are, and for several years have been, engaged in the active personal management of the party politics of the eity and state of New York. The duties of the offices held by there have been regarded as of subordinate Importance to their partisan work. Their offices have been conducted as a part of the political machinery under their control. They have made the Custom-house a center of partiean polities! managomenL “ The Custom-house to a bmtfnaie effiee. Il should be conducted on business principles. General James, the postmaster of New York CHy, writing on this subject, says: * The Pesb-effice to a bnstaeso institution and should be run as such. It to my deliberate judgment that I and my subordinates can do more for the party of our choice by giving the people of this city a good and efficient postal serriee, than by controlling primaries or dictating nomination*.’ The New York Custom-house should be placed on the same footing with the New York PeetHsffice. But under the suspended officers the Cnstem-house would be one of the principal political agencies tn the state of New York. To change thia, they profess to would be, in the language of Mr. Cornell, in his response, ‘to surrender their personal and politieal rights.’ Convtacod that the people of New York and the country generally wish the New York Customhouse to be administered solely with a view to the vuMHe interest, it is my purpose to do all tn my power to introduce Into thio great office the reforms which the country dosices.” “With my information of the facta of the ease, sad WMha deep sense of the responsible obligation imposed upon mo by the constitution, to take care that the laws be faithfully I regard it as my plain duty to suspend the officers

In question, and to make the nomination! now before the Senate, in order that this important office may be honestly and efficiently administered.” “R. B, HAYES. “Executive Mansion, Jan. 31st, 1879.” -f .TESIKNT ST JOHN SHERMAN OF REASONS FOB ARTHUR’S SUSPENSION. - ;-rt Department, Office op the Secretabt. ) Washington, D. C., January 31st, 1879. J To rut ?:.csipsNT: “If it be bid I that, to procure the removal of Mr, Arthur, it is sufficient to reasonably establish that gross abuses of administration have continued and increased during his Incumbency ; that many persons have been regularly paid on his rolls who rendered little or no service; that the expenses of his office have increased, while collections have been di* minisping; that bribes, or gratuities in the nature of bribes, have been received by his subordinates in several branches of the Custom-house; that efforts to correct these abuses have not met his support, and that he has not given to the duties of his office the requisite diligence and attention, then it is submitted that the case is made out. This form of proof the department is prepared to submit.” “That the mode of conducting business in the Custom-house in New York during the entire administration of Mr. Arthur as collector, was subject to grave criticism is hardly a matter of dispute. The development made by the Committee of the Senate of 1872, of which Mr. Buckingham was chairman, excited the attention of the country. The abuses which sprang out of the moiety system were fully disclosed by the examination and discussion that preceded the passage of the Anti-mojety Act of 1874. Numerous reports of special agents called the attention of the department to existing irregularities.” “ I come now to the specific charges to which he replies; and first, as to the gratuities in the nature of bribes given to clerks and employees. ♦ * * The evidence taken shows that most of the witnesses who were interrogated on this point, testified that gratuities were constantly received. It was in testimony with regard to inspectors that they were anxious to be sent to discharge steamers rather than sailing vessels, because they were paid by the owners of the steamships a gratuity of from ten to fifty dollars, technically called ‘house money.’ The agent of another testified that perquisites were constantly paid to inspectors for discharging vessels; that the shorter the time the vessel was to be in port the larger the amount paid; that the inspectors received a gratuity for permitting the vessels to discharge before the Custom-house permit r • aches the ship; that, if these fees were not paid, the inspector had it in his power to delay the vessel in many ways, aud that it was merely a question between the owner and the inspector as to how much it was worth to the former to obtain these facilities; that is, whether it was cheaper to pay the inspector a gratuity for obtaining these facilities than to have the inspector stand upon the strict letter of the law, and throw obstructions in his way. It was also in testimony that other irregular fees were constantly received by inspectors customarily called ‘ “ hatchets ” ana “ bones,” - “ hatchets ” being fees received from merchants for the privilege of holding their goods on the dock, instead of going into the general-order store at once, and “ bones ’’ being paid by passengers for favors extended to them “in the examination of their baggage.” With regard to weighersit was testified that there was a complete list of irregular fees adopted by all of them, to be exacted of merchants for supplying copies of weights. “ These fees ranged from two cents to thirty cents a ton for iron and other metals, and a schedule upon which the foreman of the weighers was accustomed to make the demands, showing in detail the amount to be collected upon each barrel, package and bag, upon rice, sugar and many other articles. It was also distinctly testified that the collector's entry clerk received fifteen cents foreach entry from brokers and merchants for facilities in passing the entries. The receipt of these irregular fees for entry, withdrawal, export entry and refund clerk was afterward fully shown , from the books of the Custom-house. In addition to all this, it'. clear, from letters addressed to the Jay Commis- ' sion by the collector, naval officer and surveyor, in regard to this very question, that the practice of taking illegal fees was well known. ”. ,

“It appears from documents submitted to the House of Representatives and oral statements made to the Committee on Appropriations in the presence of the attorneys for these claims [for refund], that forged protests were introduced in' many cases to give jurisdiction in such cases; that there was a failure to plead the statute of limitations; that the amount already paid on these adtiquated claims is $1,980,000, and that there are still claims pending, all of which are over fourteen years old, which, if allowed, would require the further sum of at least $750,000. It is now contended by the Department of Justice before the Courts of New York that the great body of these claims are fraudulent. “ While Mr. Arthur admits that expenses increased and receipts from the revenue steadily diminished during his administration, he claims that there were improperly, if not illegally, charged to the expenses of collection large amounts over which be had no control, and which, in strictness, had nothing to do with current expenses. “ But leaving out of consideration the extraordinary expense to which he refers, as well as those incurred, by the naval officer and Surveyors and Appraisers’ Department, it is shown by the accompanying tabular statement, made up by the Treasury registers, giving the number and compensation of employees in the several divisions of the collector’s office and of the*weighers, gaugers and inspectors, all appointed upon the nomination of the collector, that the force and expenses of his own department increased steadily from the date of assuming his duties as collector to the 80th of June, 1874, in number 251 persons, and in amount $364,574 more than in 1871, and this in the face of the fact that the receipts had fallen off, in the time mentioned, many millions of dollars. ***** “Mr. Arthur admits that he did not sometimes reach the office at the hour when by law it is open to public business, but intimates that the time after office hours that he spent at the Custom-house was an off-set. His presence after office hours could be of little use to the public. lam advised by persons entirely familiar with the subject, that the time of Mr. Arthur, when at the Custom-house, was often occupied with other than government matters; that it was sometimes difficult for a merchant who was dissatisfied with the ruling of a subordinate to obtain a hearing. It is susceptible of proof that he habitually did not arrive there until afternoon, and was therefore absent during a period when his attendance was necessary to the transaction of public business; and this was especially so after the action of the Senate upon the nomination of his successor. The watchful care of a collector at a port of such importance as New York over the actions of his subordinates in their methods of doing business, is at all times imperatively necessary for the protection of the revenue. “In a case which has come to light since the retirement of Mr. Arthur, it has been shown that goods upon which the duties amounted to $120,000 were delivered to the parties without payment of of any duties to the government, and, in a suit to recover these duties, it is claimed by the importers that the unlawful delivery was due to the negligence, or something worse, on the part of theC istom’s officers under the charge of Mr. Arthur.” * *. * * * • “ It will be expected by the public that you see that these officers act in harmony with your policy in correcting all abuses that are developed, and securing all possible reforms; and if they, in your opinion, fail, that you shall exercise the power given to you by the Constitution, to secure .officers who will do so.” • ••••• “ Very respectfully,

“JOHN SHERMAN,

Secretary.”