Jasper County Democrat, Volume 6, Number 35, Rensselaer, Jasper County, 5 December 1903 — LOOTED OF MILLIONS. [ARTICLE+ILLUSTRATION]

LOOTED OF MILLIONS.

■furrow 3 REPORT ON POSTAL FRAUDB MADE PUBLIC. V 1 Postal Scandal Inquiry Bhost* to Involve Parry A Heath—Grave Frauds Found Trusted Men Help Swindling Games—Roosevelt’s Comments. The report of J. L. Bristow, fourth Assistant Postmaster General, on th* postal fraud investigation, with a memo-

randum by President Roosevelt on its contents, has been mads public. In his memorandum President Roosevelt declares his purpose to see that every guilty man, not ahielded by the statute of limitations, is brought to justice. Mr. Bristow says

tha frauds have been going on since 1893 and the evidence shows that the Arnold concern alone profited illegally to the extent of $3,000,000. Perry Heath, who waa first Assistant Postmaster General under McKinley, is severely scored by Bristow. Reference is mad* to Heath’s alleged connection with the Doremus Coseeling Machine Company. On this point the report says: “The organised Aug. 8, 1899, and capitalized for SIOO,OOO, divided into 1,000 shares of SIOO each. Of the 1,000 shares 250 were reserved for treasury stock, the remaining threefourths being owned equally by Doramus, Truesdell and the firm of Dudley & Michenen. • • • “When Interviewed by tho inspectors Truesdell stated that before the second order on June 30, 1900, was given for 100 machines, Green told him he had transferred to Perry _S. Heath, first Assistant Postmaster* General, $20,000 worth of his stock in cfgisideration of receiving an order for not less than 800 machines. “Truesdell states that he contributed $5,000 worth of stock to Green as his share of the amount given Heath. H* also stated that Doremus transferred $5,000 worth of his stock in the same manner. Doremus denies any knowledge of the stock having been given to Heath, but states that he did contribute fifty shares, par value $5,000, to Green to bs used for the best interests of th* comBny. Doremus admits that Truesdell Id him subsequently that the stock was to be transferred to Heath in consideration of receiving a large order for machines.” In concluding this feature of th* report Mr. Bristow says: “Heath refused

to make a written statement, but said verbally to Inspector Simmons that he never received any stock from tha Doremus Canceling Machine Company or any remuueration of any kind, directly or indirectly.” Evidence against Heath, Mr. Bristow says, was laid before the grand jury,

but it was not sufficient to Indict. Kevlewa the Investigation. Mr. Bristow in reviewing the investigation says: “More than forty inspectors have been employed upon this work, some of them continuously every day since the investigation began. The records of 1,000 postoffices have been examined, and the files of many divisions of tiie department, covering a period of from six to ten years, scrutinized. “The system of organized corruption that haa been disclosed began in 1893 and continued until stopped by this investigation. The amount of money secured by the corrupt officials and their confederates is small as compared to the total loss to the government. “To illustrate: Barrett received only $6 ,000 from Arnold, yet that company I defrauded the people out of over $3,000,000. a “Machen probably did not receive more than $26,000 from the Gross fastener. Yet the government has paid approximately $130,000 for that device, which represents a net loss, since the department, continued by th’e terms of the contract for letter boxes, to pay for the original fasteners. “Beavers and his associates received less than $20,000 from the automotic cashier. Yet the department expended $74,275 for this wholly unnecessary machine. “The total amount that the perpetrators of these frauds themselves received cannot be definitely learned, but it will aggregate between $300,000 and $400,000, while the loss to the government, considering the unnecessary supplies that have been purchased and th* Inferior quality of those furnished by fraudulent contractors, cannot be estimated with any degree of accuracy. "Aa the gross abuses have been

brought to light they have been promptly corrected by the proper departmental officers. Contracts where fraud baa been discovered have been annulled. “An n result of tbs investigation four officers and employes of th* department have, resigned and thirteen have been removed. Forty-fonr indictments have been found, Involving thirty-one persons, ten of whom have been connected with the postal service.” Praise for Bristow's Work. President Roosevelt, in commenting on the inquiry, says: “Mr. Bristow’s report Is n record of as thorough a bit of investigating work as haa ever been done under the government” Continuing, the President says: "No crime calls for sterner reprobation than the crime of the corruptionist in public life, and of the man who seeks to corrupt him. The bribe giver and the bribe taker are equally guilty. Both alike sin against the primary law of the State’s safety. All questions of difference in party policy sink into insignificance when the people of tliis country are brought face to face with a question like this, which lies at the root of honest and decent government. “On this question, and on all others like it, we can afford to have no division among good citizens. In the last resort good laws and good administration alike must rest upon the broad basis of sound public opinion. A dull public conscience, an eaay-going acquiescence in corruption, Infallibly means debasement in public life, and such debasement in the end means the ruin of free institutions. Selfgovernment becomes a farce if the representatives of the people corrupt others or are themselves corrupted. Freedom is not a gift which will tarry long in the hands of the dishonest or of those so foolish or so incompetent as to tolerate dishonesty in their public servants. Under our system all power comes from the peopfe, and all punishment rests ultimately with the people. The toleration of the wrong, not the exposure of the wrong, is the real offense.” The President refers to tho case of Perry Heath in a sentence as follows: “The case of ex-Firet Assistant Postmaster General Heath, who had left the service July 31, 1900, Is set forth In the report of Mr. Bristow.” The President severely scores Tyner, Machen and Beavers, who, he says, are the chief offenders. He approves the recommendation of Attorneys Conrad and Bonaparte that the statute of limitations be extended to a period of at least five years.

List of Indicted Official*. Included In the President’s memorandum is the following list of persons implicated in the frauds, with the action of the government in each case: James N. Tyner, Assistant Attorney-Gen-eral for Poetofflce Department; appointed Special Agent Postofflce Department March 7, 1861; with Intervals of a few years has been In the service ever since and was Postmaster-General under President Grant for several months; he was removed April 23, 1003; he has since been Indicted three times. A. W. Machen, General Superintendent Free Delivery System; appointed clerk In poetofflce at Toledo, Ohio, March 1, 18871 continuously In service ever since save for three years; removed May 27, 1903; has since been Indicted fourteen times. George W. Beavers, General Superintendent of Salaries and Allowances; appointed to clerkship In New York Postofflce January, 1881; continuous service ever since; resignation accepted to take effect March 81, 1903; has since been Indicted eight times. James T. Metcalf, Superintendent MoneyOrder System; appointed Postofflce Inspector Feb. 2, 1882; has been In postal service ever since; removed June 17, 1903; has been Indicted bnce. Daniel V. Miller, Assistant Attorney, Postofflce Department; appointed July 1, 1902; removed May 25, 1903; Indicted once; after one mistrial was retired and acquitted. Louis Kempner, Superintendent Registry System; appointed clerk In New York Postofflce August, 1886; removed Oct. 21, 1903. Charles Hedges, Superintendent of City Free Delivery Service: appointed Assistant Superintendent Free Delivery Service July 1, 1898; removed July 22, 1903. James W. Erwin, Assistant Superintendent Free Delivery Service; appointed Postoffice Inspector June 27, 1887; removed Sept. 16, 1903; Indicted once. W. Scott Towers, Superintendent Station C, Washington, D. C.; appointed clerk Washington Postofflce November, 1800; removed Oct. 1, 1903; Indicted three times. Otto F. Weis, Assistant Superintendent Registry Division, New York Postofflce: appointed clerk New York Postofflce June, 1890; removed Oct. 21, 1903. T. W. McGregor, clerk Free Delivery Division, In charge of supplies; appointed Postofflce Department, March 11, 1891; removed June 5, 1903; Indicted twice. C. E. Upton, clerk Free Delivery Division; appointed July l.bWOO; removed June 5, 1903; Indicted once. M. W. Louis, Superintendent Supply Division; appointed Kansas City Postofflce April 17, 1&7: removed Oct. 21, 1908. Charles B. Terry, clerk Supply Division; Sept. 20, 1900; removed Oct. 21, A number of outsiders were also indicted. Heath on the Report. When Perry S. Heath had read the report of Mr. Bristow and the comments of the President, he said: “It is no surprise to me to see the denunciation of me in this report. Tie author of it, from the time he entered the Postofflce Department up to the present moment, has, in his official capacity, pursued me personally, in season and out, as every one who has been in public life In Washington during the past six years knows. Innuendo is artfully contrived and malice ill-concealed throughout the entire document.”

PERRY s. HEATH.

JAMES N. TYNER.