CHAPTER XIII.

"WHEN I entered the Department its accounts with some of the principal contractors were in a most confused state, as well as those of some postmasters, particularly those of James Reeside, Stockton and Stokes, and Samuel L. Governeur, postmaster in the city of New York. Not only did these contractors appear to be overpaid, but they had received large sums in acceptances which had been negotiated in various banks. I doubted the legality of these acceptances, and had no doubt of their impropriety. But as I felt bound not to pay these contractors anything until their current quarterly compensation should have cancelled the overpayments in their accounts, the means of paying the discounted acceptances all at once would be cut off; they would, unless some indulgence were extended, be discredited, and would probably be unable to continue the service. Under these circumstances I consented to furnish them with new acceptances, to be used only for the purpose of taking up those already discounted, upon their pledge of honor to apply them solely to that object, and ultimately take them up. Not believing that I had lawful authority to bind the government or the Department to pay out of its funds when nothing was due, the acceptances were made on the express condition of payment only in the event that the amount should be due when they came to maturity. Stockton and Stokes honorably redeemed their pledges; but Reeside suffered the acceptances to be protested, and withdrew from the service of the Department, though already indebted to it, as appeared by its books, many thousand dollars. This balance he did not contest. Yet, some years afterwards, in the trial of a suit against him in a Philadelphia court to recover judgment for it, he obtained a certificate from the jury that the Department was indebted to him about three hundred thousand dollars! And this amount was afterwards allowed by Congress with interest.

"By what means the decision of the jury or of Congress was obtained I never knew. In neither case was I called upon to testify. All I know is that no such claims were ever presented to me, and that Mr. Reeside did not, at the time, question the correctness of the settlement.

"The account of Samuel L. Governeur, postmaster at New York, had

not been settled for several years. Circumstances had led to suspicions of his fidelity. But though I had serious thoughts of removing him, occurrences, after I became Postmaster-General, determined me to retain him. I so informed him, at the same time stating that it was absolutely necessary for him to close up his accounts. His evasions and delays excited new suspicions. There was an item on the debit side of his account which he declared belonged to the account of James Reeside, the mail contractor, but had been put to his debit to conceal the true condition of Reeside's account from the investigating committees of Congress. He presented no evidence of the truth of the assertion, but it seemed from the nature of the item that it had no appropriate place in a postmaster's account; yet it was incredible that it should have been placed there without some reason. While the item was under consideration, the accountant of the Department brought me a half-sheet of cap paper on which was a list of acceptances amounting to $25,000, having at the foot the initials J. A. H., and my chief clerk stated that he had heard vague rumors indicating that the Department had had pecuniary transactions with James A. Hamilton, Esq., of New York. Upon the basis of these indications, I wrote to Mr. Hamilton. He promptly replied, that at some time in the administration of my predecessor, he was in Washington, and learning that the Post-Office Department wanted a temporary loan, he tendered his services to aid in the operation, that acceptances to the amount of $25,000 were placed in his hands for the purpose of raising money by getting them discounted in the banks; that he was unable to get them discounted, but that he raised $25,000 on his own credit and handed it to Mr. Governeur; that it was afterwards repaid by Mr. Governeur ; that he had undertaken to raise the money on condition that his name should not appear on the books of the Department; and that the acceptances were still in his possession. This explained the mystery. Mr. Governeur had not charged himself with the $25,000 received from Mr. Hamilton, but in lieu thereof, had charged himself with sums advanced by him to refund that loan, thus converting an apparent credit into a debit. So wrong did this appear to be, that I had promised him to strike out the item unless the Department should be able to show why it was so entered. Mr. Hamilton's letter afforded the explanation. The account was rectified by transferring this debit to the credit side of his account, and charging him with the $25,000 received from Mr. Hamilton. But what could be said of Mr. Governeur? He had in this matter palpably attempted to cheat the government out of $ 25,000, by insisting on having this charge struck out, and concealing the fact that he had received that sum, not otherwise accounted for, in whole or in part. He was dismissed, and was found to be a defaulter in a large sum.

"But the case which illustrates more strikingly than any other in that Department the power of corruption in a government, and the fate of an honest man who endeavors to put a stop to it, is that of Stockton and Stokes. They had long carried the mails in post-coaches between Philadelphia, Baltimore, and Washington, and between Baltimore and Wheeling. They were of that class of 'old and faithful contractors' who procured a continuance of their contracts by 'private understandings between them and the Department,' had before the lettings, and by means of very low bids, afterwards improved.' They transported in their coaches, free of charge, prominent members of Congress, members of the Executive, judges, influential citizens, and not only the Postmaster-General, but all of his subordinates in the Department who were supposed to have influence there. When General Jackson went on to Washington in the winter of 1828-29, to enter upon the office of President, they refused to receive the usual fare from him, and not to feel under obligations to them, he sent to Mrs. Stockton a present of greater value than the fare. His private secretary, Major Donaldson, refused to enter an extra coach, gratuitously offered to convey him and his party from Frederick City to Washington, until they had paid the ordinary fare. It was these men who attempted to cheat me into a free passage from Frederick City to Wheeling, through instruction to their agents. Few, however, declined the tendered freedom of their coaches, and thus it was that the executive, legislative, and judicial departments of the government were in a great measure filled with men whose money they had saved by this apparent liberality. If this was not corruption, there is a moral difference between giving a man money for his influence or saving his money by a valuable service, the object being the same.

"Soon after I took charge of the Department, I learned that a large sum had been recently carried to the credit of Stockton and Stokes, apparently in consideration of services for which, if there was any truth in the reports of the committees of Congress, they had previously been overpaid. This discovery was very alarming in two aspects. First, it apparently added that sum to the responsibilities of the Department, already overwhelmed with debt. Secondly, if the reports of the committee on this case were to any extent true, here was a considerable amount, unknown to them, added to the allowances they had condemned, and presenting the question as to what was my own duty in the premises. It was my desire, as far as consistent with duty, to avoid conflict with the decisions of my predecessor, and at the same time to do my duty, whatever might be the consequences. I consulted the President, who remitted the matter to my discretion. As I was uninformed of the basis on which this allowance rested, and only knew that it was in conflict with the opinions of the committee, and therefore prima facie wrong, I

ordered its suspension from the credit of the contractors until a more mature knowledge of the affairs of the Department should enable me better to understand it. My predecessor was still in Washington, and on hearing of this decision was much excited, and meeting my chief clerk declared in his own words that 'Mr. Kendall shall not make a Toby Watkins of me.' I sent for him, and assured him that while I should do my duty in the Department, I should do it in a spirit of the utmost kindness towards him; that if he did not make himself the partisan of the contractors, but left them to rely on his official acts as shown in the Department, there would be no quarrel between him and me; that my action in this case was not definitive; that as soon as I was able I should investigate the whole matter, and restore the credit if I found I could do so consistently with my duty to the public. As to the allowance, the only defence he set up for it was, that without it the contractors would be ruined, so great were their losses in attempting to expedite the mails. He left me in a good humor, promising to refer all parties who might question him as to his official acts to the records and files of the Post-Office Department.

"As soon as I conveniently could, I entered upon the promised investigation. I found that this was not a recent allowance, though lately entered on the books; that it had been made on a loose slip of paper some time before; that the slip was retained in the Postmaster-General's drawer until the committees of Congress were supposed to have finished their investigations; that it was never seen by them; and that the money was paid over to the contractors soon after the allowance was ordered, producing in whole or in part the apparent overpayment in their accounts on the books of the Department. This obviated the impression that it had added its amount to the debts of the Department, but it did not show that it had any basis in law or in services rendered. In short, the investigation conclusively showed that the entire allowance was nothing more nor less than a gratuity to the contractors, which might or might not have been necessary to save them from ruin.

"While this question was still undecided, a circumstance occurred which certainly did not aid the cause of the contractors. Major Eaton, General Jackson's first Secretary of War, and his wife were warm friends of Richard Stockton, the leading member of the firm of Stockton and Stokes. While I was investigating this affair, Mrs. Eaton called on Mrs. Kendall and told her that if she would induce her husband to allow this claim, Mrs. Stockton would give her a carriage and pair of horses.

"The investigation ended in making the suspension permanent, on the ground that the credit was an error, having neither law nor equity to sustain it.

"Prima facie it was impossible for me to conceive that the condemnation of the Department for its allowances to these men was sheer hypocrisy, designed merely for political effect, much less that Congress would in any way give countenance to the addition of one hundred and twenty thousand dollars to the hundred and odd thousand already allowed them, as the committee alleged, contrary to law. But I was mistaken. Stockton and Stokes petitioned Congress for relief, and that body, without calling on the Department for information or explanation, passed an act vesting the power to settle the claim in the Solicitor of the Treasury, a friend of the contractors, from the State of Maryland. Those who had denounced the Department for its illegal allowances were now dumb, and I did not think it my duty to volunteer information, although I had afterwards cause to regret that I did not then take steps to have a call made.

"The Solicitor of the Treasury, without calling upon me for any evidence contained in the books and files of the Department, or information of any sort, sent me an award allowing not only the entire amount originally claimed by Stockton and Stokes, but about forty thousand dollars in addition thereto, based upon claims which had never been heard of in the Department! To say that I was shocked by the decision, is but a faint description of my sensations. I thought it my duty, if I could by any lawful means, to prevent the consummation of such an outrage on the Department. I therefore addressed a letter to the Solicitor, assuring him that the Department contained abundant evidence that nothing of this large sum was due to the claimants in law or equity, and asking him to withdraw his award, and allow me to present those evidences before him. To this he assented, and I furnished him with what seemed to me conclusive proofs that not a particle of service had been rendered the Department for the hundred and sixty thousand dollars which he proposed to allow. Nevertheless, he returned the award without any material alteration, except in one small item which in his haste he had allowed twice over. As there was no question of his legal power to allow all of the claims which had formed the basis of the legislation of Congress, I proceeded to pay those claims in full; but I refused to pay the amount added by the solicitor upon new claims which had never been presented to the Department or Congress, had never been a subject of dispute, and of course did not come under his jurisdiction.

"Stockton and Stokes applied to Congress for the passage of an explanatory act or resolution to enable them to realize the balance of the award. No effective action took place in the House of Representatives. In the Senate it was referred to the Post-Office Committee, of which Mr. Felix Grundy was chairman. He called on me, as I at first sup