Democratic Sentinel, Volume 7, Number 31, Rensselaer, Jasper County, 31 August 1883 — THE TREASURY RING. [ARTICLE]

THE TREASURY RING.

John Sherman’s Legacy—How Some of the Department Clerks Grow Rich. [Cor. of the Chicago Express.] The Treasury Department has grown to be by Jar the greatest machine of the Government. Particularly within the last twjenty years it has spread out by the addition of new bureaus and divisions. One result of this growth has been that the safeguards imposed by law for the management of its business have been largely broken down. Authority has been taken from officers in whom it is vested and lodged in clerks who are not known to the law. This was due almost entirely to a desire among the Secretaries after the war to get into their own hands the supreme control of the business of the department. It has been kept up ever since by the' interested efforts of those who have profited by these arrangements. Perhaps as glaring an instance of this as any is in the office of the Solicitor of the Treasury. This officer belongs to the department of Justice, but is appointed by the President and stationed at the treasury. He is by law the legal adviser of that department, and is intrusted with the management of all its law business. He has charge of the collection of direct taxes; the detection and punishment of fraud in the revenue are left to him; he makes rules for the observance of Collectors of Customs, District Attorneys and Marshals; he instructs District Attorneys, Marshals and Clerks of Courts in all cases in which the United Slates is a party, except those arising from the Internal Revenue laws; all ligitation Concerning national banks fe’Uitder "MiS direction; lie brifigff air’itfftrf'against - 3elinquqpt. debtor?; he approves the bonds of Internal .Revenue Collectors; his recommendation is necessary in all cases of comprtflnise; Ire-’tiW’tsfiafge of lands and trusts held by the tates in payment of debts, and,, in general, Oversees and directs all the legal busi-. ness of the’ departrtfeirt, except that of. the Internal Revenue Bureau, 1 for'which a special sblknt-oris Htr also' has charge of the Secret Service, yvlfich . is employed in the detection of counterfeiting and all'titheV ‘frauds on the'psovx. prnmeAt. *■' *••" -K>. £’• This office was created.-in 1830,- and was designed to form a cheek upon the Secretary of the Treasury by appoint? ing a high-salaried officer of another department and selected by the President to have control of the treasury litigation. Some of the best lawyers in the country have held the place, and it has always been considered a peculiarly honorable one. But within a few years the most important powers lodged in the Solicitor’s hands have been taken from him. A new institutution has grown up in the department by which it was intended to keep them directly in the Secretary’s hands, without the restraint of the Solicitor. This is known as the “Secretary’s office.” It consists of about twelve heads of divisions, who report directly to the Secretary. They are not known to the law, except as mere clerks, but as things now go they are intrusted with the most intricate legal questions. These clerks swallow up the functions which by law are assigned to the heads of bureaus. They are responsible to no one except the Secretary, who makes and unmakes them. The revolution was fully accomplished by John Sherman, who made it his plan to gather the business directly under his own control. In this way all the innumerable cases of fraud or attempted frauds on the revenue go to the subordinate clerk, although the statutes expressly provide that everything of this sort shall go to the Solicitor. They are referred to an officer known as the head of the customs division. These decisions involve millions of dollars yearly. They affect larger interests than any other which the Government makes, and yet for more than six years not a single custom case has been sent to the Solicitor’s Qffice. They arise every day under our complex Tariff laws, and are passed upon by a clerk. Perhaps this may account for some of the extremelyqueer decisions which have emanated from the treasury of late, decisions which, like Caesar’s wife, have not been entirely above suspicion. Take the National Banking Bureau. The law expressly says that “all suits and proceedings arising out of the provisions of law governing national-bank-ing associations shall be' conducted by District Attorneys, under the direction* and supervision of the treasury.” Tins would seCm to be plain enough. And yet all the litigation arising out of broken banks, wrecked or ruined in quick succession all over the country, is left entirely in the charge of a clerk in the office of the Comptroller of the Currency. The suits are mainly conducted by special counsel hired by him, instead of the District Attorneys. They are never sent to the Solicitor’s office. But the most glaring perversion of the'law goveriag the' Solicitor regards compromise cfiSes. All compromises must be recommended by the District Attorney, indorsed by the Solicitor, and then decided by the Secretary. Very few people understand the proportions which his business reaches. In almost all cases of customs frauds, of delinquent bondsmen, and numberless instances where judgments have been Obtained for the Government, a compromise is sought. All kinds of political influence are brought to bear. Members of Congress consider the gaining of a compromise as a great service done to a constituent. Where so much depends in a financial way upon the decision, great firmness and strength are required. But here again the Solicitor is ignored. His recommendations are not acted upon directly by the Secretary, but are referred by him to the Navigation Division. Here opinions are written which often entirely oppose those given by the Solicitor. Sometimes thev are substituted therefor, and followed m preference. Take the famous Rothschilds case. That firm owed SIB,OOO to the Government as a penalty for smuggling. It was well able to pay. The courts had decided for the Government. The sum of $4,000 was offered in compromise; the Solicitor recommended that it be not accepted. It was sent to the Navigation Division, a favorable report ren-

dered, and Secretary Folger accepted the offer. It was entirely without warrant of law. Recently the Jouett case, of Chicago, came up. Three whisky-bond sureties owe the Government SBO,OOO. They offered $4,500 in compromise. A responsible firm in that city wrote to the Secretary showing that the claim was worth more than that, and offered SIO,OOO fdr it. Their letter was sent to the Navigation Division. The Solicitor did not see it. And so things go on day after day. The present Solicitor is Kenneth Raynor. He is an old-time North Carolina Whig, who was in Congress as long ago as when Martin Van Buren was President. Judge Raynor is a well-preserved old gentleman, who has killed his man in his day, is inclined to forget to button up his capacious shirtfront, and calls upon the Deity oftener than strict morals prescribe. But he is a good lawyer, and, more than that, a perfectly honest man. He took the Solicitorship in 1877, on HayesJ distinct promise of a Court of Claims Judgship. But this is not the only one of Hayes’ unredeemed drafts on futurity which has not been paid. When Judge Folger came in he went to work honestly to remedy some of the evils which had grown up in the treasury. He asked different heads of divisions to furnish, him with information ' regarding abuses. He particularly requested Judge Raynor to submit a statement. This the Judge did. It covered nearly 100 pages of manuscript. He did not Confine himself, to the mere legal aspects of the case, but indulged in some rather-pointed statements regarding sqine of .the men and methods in the Secretary’s-office. These he offered -to prose.at.any time. It was a document contained more truth than poetry, , .Secretary Folger read it ■ Over. He was tempted to -actr upon -it,-but the, ?tupe ffifluejice .which had. grown up.uudeib&Aermaa amkcon tinned Under Windom-proved too strong to be’combated by He was roused, however, •“-by*' -the ''•re'velations "which were made’ to him, aijd ever since he ,ljas shown nmarked suspicion of the officials who- constitute what is known as the treasury ring. He has been too sick dnd too uncertain dfhisowntengo further. > These abuses are not confined to one bureau. Other’ important functions have been absorbed by degrees in unknown and irresponsible divisions. Clerks on small salaries are growing rich. Important questions are decided in corners, and the plain provisions of law are habitually disregarded. It will take a brave and thorough-going Secretary to correct these things, but it will have to be done sooner or later. When it is begun in earnest there will be a lively shaking up of dry bones among the subordinates, who, in the neglect of their superiors, have been allowed to assume important trusts and obtain control of great stakes. The letter of Judge Raynor has never been made public. It would show a startling state of affairs. The existence of a treasury ring is well established. The investigation forced from John Sherman proved that, but they were hushed up when things became too warm. The Murch inquiry will have the same result. What is needed is a'n inquiry to the bottom of things, and then some of the fortunes made by ill-paid clerks would be understood.