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shooting nt our citizens on t1;e public highways slionld cease. Congress itself .should assume its rightnil bunlfn, tliat of making the law so plain that not only department heads and nil officers shall plainly understand it, liut that American c-itizciu may feel safe to travel ovi r tl-e highways.
We heartily protest against the manner and method of enforcement which has resulted in the nuluilng and wounding of our brother, not alone as Elks, hut as American citizens; and be it further
Rtioli'ed, That a copy of thi-se resolutions be sent to Jacob D. Hanson, the 1'resident of the United States, t'nited Slates Senators from tills State, Congressman from this district, Niagara Kalis Lodge of Elks, and the Grand Lodge of Elks.
Lockport Lodge No. 41. B. P. O. Elks,
Chaui.eh F. Folby, Chairman.
A. Bruce Hopkixs.
Joseph M. Kennbdt, Committee.
STEAMBOAT INSPECTORS AT HOQnAM, WASH.
Mr. JONES. From the Committee on Coinmeroe I report hack favorably without amendment the bill (11. It. 457) to create a hoard of local inspectors, Steamboat Inspection Service, at IIo.quiam. Wash., and I submit a report (No. 1182) thereon. It is a very short bill, and I ask unanimous consent for its Immediate consideration.
The VICE PRESIDENT. Is there objection to the present consideration of the bill?
There being no objection, the Senate, as in rommitlee of the Whole, proceeded to consider the bill, which was read, as follows:
Be U enacted, etc.. That a board of local Inspectors, Steamboat Inspection Service, consisting of a local Inspector of hulls and a local Inspector of boilers, be, and is hereby, created at the port of Hotitilmn, Wash. Kuch inspector of hulls and Inspector of boilers shall each be entitled, in addition to his authorized pay and traveling allowances, to his actual and reasonable expenses for transportation of instruments, which .shall be certified and sworn to nnd*>r such instructions ns shall be given by the Secretary of Commerce.
The hill was reported to the Senate without amendment, ordered to a third reading, read the third time, and passed.
APPROVAL OF JOVKNAL
Mr. CURTIS. I ask unanimous consent that the Journal be approved for the calendar days May 11, May 12, May 14, and May 15.
The VICE PRESIDENT. Without objection, it is so ordered.
ORDER FOR KECE38
Mr. CURTIS. I ask unanimous consent that when the Senate concludes Its business to-night it take a recess until 12 o'clock noon to-morrow.
The VICE PRESIDENT. Without objection, it is so ordered.
Mr. CURTIS. I move that the Senate proceed to the consideration of executive business.
The motion was agreed to: and the Senate proceeded to the consideration of executive business. After five minutes spent in executive session the diwrs were reopened, and (at 5 o'clock and 30 minutes p. m.), under the order previously entered, the Senate took a recess until 8 o'clock p. m.
The Senate reassembled at 8 o'clock p. m., on the expiration of the recess.
The VICE PRESIDENT. The clerk will call the calendar under Rule VIII, under the special order.
FIRST NATIONAL HANK OF NEWTON, MASS.
The bill (S. 2447) for the relief of the stockholders of the First National Bank of Newton, Mass., was announced as flrst in order.
Mr. BRATTON Let the bill go over.
Mr. GILLETT. Mr. President, this hill has been four times unanimously reiKtrted from the Committee on Claims. It has twice passed the Senate. So I feel justified in moving that the Senate give consideration to the bill notwithstanding the objection of the Senator from New Mexico.
On a division, the motion was agreed to, and the Senate, as in Committee of the Whole, proceeded to consider the hill which was read, as follows:
Be U enacted, etc.. That the Secretary of the Treasury be, and he is hereby, authorized and directed to pay to the stockholders of the First National Bank of Newton, Mass., interest at the rate of 4% per cent per annum on the Judgment rendered in favor of the First National Bank of Newton, Mass., against the United States In the sum of $371,025, from March 1, 1867, to the date oC payment.
Skc. 2. That the sum of $240,039.95 Is hereby appropriated for the purposes set lorth in section 1 out of any money in the Treasury not otherwise appropriated.
Mr. GILLETT. Mr. President. I will not take the time of the
Senale in discussion of the bill if the Senate is ready to vote.
Mr. BRATTON. Mr. President, it is not my purpose to delay the Senate long in discussing the bill.
Mr. WARREN. I wish to ask a question with reference to the bill. I understand it is the bill relating to the First National Bank of Newton, Mnss.?
Mr. GIIXETT. It is. I shall lie glad to answer the Senator's question later. The Senator from New Mexico has the floor.
Mr. BRATTON. Mr. President, the bill involves an expenditure of practically a quarter of a million dollars out of the Treasury of the United States. The claim involved is a stale one. to express it mildly. The transaction occurred in 1867. At that time the cashier of the bank entered into a conspiracy with an official of the Government. The official was short in his accounts in the subtreasury at the city of Boston. The conspiracy involved an agreement to take the property and funds of the bank out of the coffers of the bank and carry them to the suhtreasnry, to be used for the purpose of concealing the shortage of the officer of the sublreasury during an impending examination. Clearly it constituted a criminal act within itself. It was a conspiracy to conceal a crime which had already been committed by an officer of the Government.
The cashier of the hank was a party to the transaction and aided in its consummation. He was just as culpable as the official of the Government. Their degree of guilt can not be distinguished. The funds were taken from the bank pursuant to the criminal conspiracy, and were carried to the subtreasury for the purpose of concealing the embezzlement which had previously occurred.
I have not had time to reconsider the report this evening, but the Senator from Delaware [Mr. Bayahiij reported the bill for the Committee on Claims. lie sits at my right and I shall ask him to correct me if I go astray in detailing them.
As I now recall, some of the securities were earmarked in order that they might be identified for the purpose of making certain that they would be returned to the hank after they had been used by the official of the Government in concealing his shortage or embezzlement while he was being examined by the examiner who was due in a few days thereafter. A detailed receipt was given for everything thus received in the way of money or securities.
When the examiner came, as I now recall the facts, the embezzling official confessed the shortage, and the whole thing was made known. The Government held to the money and securities for a long period of years. Then the bank made claim against the Government for the recovery of the principal of the securities and money thus acquired by the Government and thus surrendered on the part of the bank. The claim was submitted to the Court of Claims. Judgment was rendered for the principal sum. It has been paid. The bank has recovered the principal sum of all of Its money and tilings of value with which it parted through the consent and connivance of its cashier, representing the bank, on the one hand and the officer of the Treasury, representing the Government, on the other hand.
It is now proposed through this bill to pay the bank practically a quarter of a million dollars for the interest upon the use of the money during the time the Government had il.
Admittedly the transaction was conceived through fraud. It. was born of corruption. The bank was as culpable as was the Government. It it a new doctrine when one party to a fraud oj' that kind can come before the Congress and contend that it has clean hands and accordingly may present a claim that can rest upon no ground except moral ground. There is no legal obligation here.
I venture the assertion that even the author of the bill, the Senator from Massachusetts [Mr. Gillktt], will not contend that there is a semblance of legal liability on the part of the Government. If not, then what character of obligation is there unless it lie said to be a moral one?
I submit to the Senate that the transaction bears close analogy to a proceeding in court where one gambler is attempting to recover from another gambler. Where is the court that will waste its time to hear a dispute between thieves or gamblers with reference to the loot or the fruits of their illegal transactions'; But we are asked here to appropriate a quarter of a million dollars of the taxpayers' money to reimburse a corporation that was just as guilty and participated in the illegality of the transaction just as much as did the official of the Government
It Is not my purpose to filibuster against the hill. I am perfectly willing for the Senate to vote uiton it. But I nm curious to know upon what theory a vote can be justified in favor of the bill, when it is known to the Senate that the obligation, if there is one, emanates from u transaction which sounds in crime— one that is criminal in its nature, filthy from start to finish, had no other purpose in view than to accomplish a crime by concealing one already committed. Yet one r.f the parties to a transaction of that kind comes before the Senate and asks the Senate to reimburse it with the money earned by the sweat of the brows of the taxpayers of the country who were never parties to a transaction of that kind.
My attention has been called to Section XXIII of the report.
I digress to inquire why this liab'.lity was not adjusted 40 years or more ago if it had sufficient merit to appeal to the conscience of the Congress? Why has it remained in this unliquidated and unsettled form during these years if it was founded upon merit either legal or moral?
Section XXIII of the report reads as follows:
XXIII. On i rhrunry 24, 1872. tbe bank filed its petition in the United States Court of Claims against the United States to recover its funds and securities deposited us aforesaid in the office of the Assistant United States Treasurer in Boston, and on January 24, 1881, judgment was rendered for the full amount, to wit, $371,025. In delivering the judgment of the Court of Claims, Chief Justice Drake thus expressed the opinion of the court regarding the taking of the bank's assets as a "villainous scheme," and the transaction as "simply a case of a bank being robbed and of its stolen assets being put into the hands of the cashier of the subtreasury for a purpose which by no law could be held to effect a transfer of the bank's right of property in them either to him or the United States."
Mr. President, I undertake to say that if the scheme was a villainous one, as the court characterized it, participated in by villains, designed to conceal an existing crime by the commission of another crime typical of villains, there is no justification for the expenditure of a quarter of a million dollars to repay the bank for the use of its money thus acquired by the Government.
Mr. ELAINE. Mr. President
Mr. BRATTON. I yield to the Senator from Wisconsin.
Mr. BLAINE. Mr. President, I was unable to hear what the Senator said with respect to the time when this transaction occurred. Was it four years ago?
Mr. BRATTON. It occurred in 1867.
Mr. BLAINE. It was not four years ago, then?
Mr. BRATTON. I said 40 years ago.
Mr. BLAINE. I understood the Senator to say four years ago.
Mr. BRATTON. I spoke figuratively when I said more than 40 years ago. The transaction actually occurred in 1867. During all the intervening time the Congress of the United States, with the combined judgment which its Members represented, has failed to see fit to reimburse one party to a transaction which the reviewing court characterized as a villainous one, yet we are called upon to pay interest for the nse of money furnished by one villain to another villain, to be used in concealing a crime previously committed, and in doing that another crime was committed.
Mr. President, I can not give my consent to reach into the pockets of the taxpayers of this country, the farmers who earn their livelihood by the sweat of their faces, or the man who earns his wage behind the counter, or the fathers and the mothers of this country who are interested in educating their children at heavy expense in order that they may become useful citizens, for the purpose of reimbursing a bank that participated in an unholy, a criminal transaction, as this bank did.
It is merely my purpose to bring the facts to the attention of the Senate, and then I am willing to abide by the judgment of the majorily of the Senate; but I do desire to have Senators understand what is involved and upon what foundation we are asked to appropriate the enormous sum of nearly $250,000. I think I have made a fair statement of what was done; I think I have been fair In my deductions as to how the transaction should be viewed in law or morality. With that explanation, Mr. President, I am content to yield the floor.
Mr. BAYARD. Mr. President, I submitted the report on ,hls bill both at this session of Congress and during the last Congress. While it does not appear in the report, I call the attention of the Senate to the fact that a bill similar to this bill was introduced in 1885: that a bill carrying tho same amount has twice passed the Senate; that a bill in the same amount once passed the House, and that a bill carrying a smaller amount also once passed the House. Therefore, the matter is not unknown to the Congress of the United States. It so happens, however, that in no one Congress was joint action
taken by both Houses, either for the whole amount or a smaller amount.
To refer for a moment to what the Senator from New Mexico has said. I do not think that he has taken the proper conception of the facts in this case. He has not misstated them; I think he has given a very fair and concise statement of the facts as they appear in the record: but I think he has unconsciously glossed over a part of the case, and to that I wish to call the attention of the Senate.
This money was stolen by the cashier of the bank from the vaults of the bank, and taken, as the Senator has said, and placed in the hands of the cashier of the United States Subtreasury in Boston; but that taking by the cashier of the brink was in no wise permissible, so far as his duties were concerned; he was a robber and thief when he did it. He did it without authority; he did it without order and without the knowledge of the bank. So, when he took it, he took it as a thief and not as a bank official. As a bank oflic.'al he had access to it; that was how he could lay his physical hands upon it: but the actual taking was not the legitimate act of a bank official but the act of a thief.
The Senator from New Mexico, as I have said, has glossed over that phase of It. While he tried to make it appear that the cashier of the bank was particeps crimiuis with the cashier of the subtreusury, nevertheless he holds the bank at fault for not having stopped this man from taking funds out of the bunk vaults.
Mr. BRATTON. Mr. President, will the Senator yield?
The PRESIDING OFFICER (Mr. La Follette in the chair). Docs the Senator from Delaware yield to the Senator from New Mexico?
Mr. BAYARD. I yield.
Mr. BRATTON. The Senator concedes that the cashier was one of the executives and controlling officers of the bank, was he not?
Mr. BAYTARD. No. The-Senator concedes he was the cashier of the bank and had control of the funds of the bank, to be paid out solely for the purposes of the bank and for no other purposes.
Mr. BRATTON. He was one of tbe controlling officers of the bank, was he not?
Mr. BAYARD. No; he was subject to the orders of the directors.
Mr. BRATTON. As cashier he had the physical control of the assets of the bank, including these moneys and securities?
Mr. BAYARD. No; I differ from the Senator. I do not like to say it, and I say it with great courtesy, but I dislike his language. The cashier did have the physical control of the moneys of the bank, under the orders of his superiors, to wit, the directors of the bank, for the purpose of not letting that control go loose from him: but lie had no orders and no power to let that money or the securities go out except in the regular transactions of the bank, as set forth under the terms of his employment by the directors.
Mr. BRATTON. Mr. President
The PRESIDING OFFICER. Does the Senator from Delaware yield further to the Senator from New Mexico?
Mr. BAYARD. I yield.
Mr. BRATTON. Suppose he had used the money to lend it out at interest and had gained something for the bank. Does the Senator suppose the board of directors would have ratified the transaction and enjoyed the fruits of it?
Mr. BAYARD. Undoubtedly; if he had loaned it out, that would have been within the scope of his duties. That was what he was there for. to supervise the loaning of money.
Mr. BRATTON. In other words, when he gained something for the bank, well and good; but the moment that he loses the bank's property in this way they repudiate the transaction and stand upon the technical ground that he was not authorized to take the money out of the vaults of the bank and pass it over to an official of the Government.
Mr. BAYARD. That is where the Senator and I differ in our conception of the moral quality of this act as compared with the moral quality of the acts which he was authorized to perform by tho directors of the bank. The cashier of the bank was authorized by its directors to lend money in the regular course of the banking business, and of course the bank in return would receive interest upon the loans or the discount, or whatever it might be; but in this particular case he did not lend anything. He took the money surreptitiously; he took it without permission ; he did not take it for the purpose of lending it to anybody to get any relurn for the bank, but he took it without the bank's permission for no banking purpose whatever; he took it for the sole criminal purpose of helping another criminal to cover up his tracks in the subtreasury of the United States.
That was the sole purpose, and I can not conceive of how the Senator gets In his mind the idea that this money was in any wny taken out of the batik for what, for lack of a better term, I may call a banking purpose, so far as the hank was concerned or those in interest, the stockholders of the bank and the directors. So much for that phase of it.
If Senators will caicfully read the report and the findings of the Court of Claims in this case they will find stressed in the opinion of the court this particular point—and I ask the especial attention of the Senate to it—that, as the court found to be a fact, when the cashier, who was the representative of the Federal Government, reciived that money and put it in the Government vault he knew it was stolen money. That is one phase of it. After he made his confession and it was found that the money was there, and when the cashier of the bank turned up with his receipt—a detailed receipt showing exactly what had been turned over to the defaulting cashier of the Federal Government, the whole Government of the United States then knew, through its own proper examination, through its own proper agencies, that every dollar of that money and all the securities were stolen. In other words, from that time on the Federal Government was knowingly the receiver of stolen goods. That is a fact determined and found in the opinion of the court.
Nevertheless and notwithstanding that fact, the Government kept control of that money from 18(57 until 1881, when, after the finding of the Court of Claims, the judgment was finally paid: but during that whole time it kept that money; it used it; it kept the securities from which it cut the coupons. In this connection let me say to the Senate that some of the securities were the Federal Government's own bonds and from those bonds it cut its own coupons, and cashed them and put that cash in its own pocket during that time. That is a fact. It is all in the opinion and in the findings of the Court of Claims.
Having received that money, having kept it from 1867 to 1881. knowing all that time that it was stolen property, and finally having paid it back in 1881. using it for 14 years, the Court of Claims could not under the then law, nor even under the present law without special authorization, allow interest on that claim. However, the Government did use the money during all that time, knowing it did not. own the property, that it had no righteous title to it, but it kept it. knowing from the very beginning that it was stolen property. This bill is to reimburse the bank for the use of that money at the average rate of 4% per cent during that period of 14 years.
Mr. NEELY. Mr. President, will the Senator yield for a question?
The PRESIDING OFFICER. Does the Senator from Delaware yield to the Senator from West Virginia? Mr. BAYARD. Yes.
Mr. NEELY. Why have the beneficiaries of this bill waited 61 years to ask for relief?
Mr. BAYARD. As I said a moment ago—I do not think the Senator heard the earlier part of my remarks——
Mr. NEKLY. I did not hear all the Senator's statement. Mr. BAYARD. A hill was introduced in 1884 or 1885. I think it first passed the Senate in 1885; I do not recall the exact date. I think it has passed the Senate twice, or perhaps three times, in this exact amount; it has passed the House once in this exact amount nnd it has passed the House once carrying a smaller amount; but in no one Congress has the same bill passed both Houses. I can not give the exact elates of the various passages. I think the last passage in either House— and the Senator from Massachusetts can correct me about it if I am wrong—was about 10 years ago. I think I am right about that, but I will not vouch for the exact time. Apparently, however, this case has been fairly well prosecuted, if I may use that term. The amount is large, nearly a quarter of a million dollars, nnd that in itself has been a stumbling block to the passage of the bill.
Mr. BRATTON. Mr. President, will the Senator yield?
Mr. BRATTON. I notice on page 4 of the report a receipt for $336,000 signed by J. F. Hnrtwell, cashier. Is that the amount of the securities and moneys that were taken in the first instance?
Mr. BAYARD. I will say to the Senator—and I think his question is a perfectly fair one—that the money was taken, I think, from three separate sources. There were other deposits than the deposits which were in the bank vault: that is, there were some deposits in the city of Boston where the bank had a department or an agency, and some moneys were taken from there, and I think some securities were tnken from some other place. They were not all taken from the same place. The one
receipt to which the Senator refers is for the definite amount, I think, which was taken from the New! on home bank.
Mr. BRATTON. If I may impose upon the Senator for an additional question, what was the total amount given by the cashier of the hank to the official of the subtreasury'!
Mr. BAYARD. It was three hundred and seventy-odd thousand dollars; I do not remember the exact amount. I have not the figures before me.
Mr. BRATTON. Then, Mr. President, the principal amount was only $371.025, as the bill recites, and we are now proposing to pay $249,03!) as interest upon that sum. I am correct in stating that the bank has been repaid the full amount of the principal, am I not?
Mr. BAY'ARU. Whatever was the amount of the principal it has been fully repaid. I have forgotten the exact amount of the principal, but this covers the interest at 4% per cent, which is the average rate during that whole period that the Government was paying for money, on the whole amount finally paid back by the Government.
Mr. GILLETT. Mr. President, the Senator from Delaware, it seems to me, has so adequately explained the bill th;it although I had expected to discuss it, yet, as I know the Senate is in haste, I will not occupy time except to say that I think the Senator from West Virginia did not fully understand that while this claim originated in 1867, suit was brought first, and that suit was not settled in the Court of Claims .until 1881). Soon after 1880 this claim was begun in Congress, and was prosecuted vigorously in the eighties.
Mr. KING. Mr. President, will the Senator from Massachusetts yield for a question?
Mr. GILLETT. Certainly.
Mr. KING. Obviously, after the Court of Claims had rendered judgment, the matter was presented to Congress for payment. If Congress had believed that more than the judgment rendered in the Court of Claims was due, morally or legally. Congress would have made the appropriation at the time that it made the appropriation to cover the judgment
Mr. GILLETT. Not at all.
Mr. KING. If Congress did not make the appropriation for anything more than the judgment, are we not entitled to the presumption that Congress felt that the bank had been adequately paid, and that there was no further, obligation, either moral or legal?
Mr. GILLETT. Mr. President, Congress could not make an appropriation for anything except the judgment.
Mr. KING. Why not?
Mr. GILLETT. It could not make the appropriation until a bill had passed Congress, authorizing it; and that bill was started very soon after that—I forget the exact year. It passed the Senate twice, and it lias four times had the unanimous report of the Committee on Claims.
Mr. KING. If the Senator will permit an interruption again, the Senator knows that whenever a judgment has been rendered by the Court of Claims, the matter is then presented to the Appropriations Committee. That judgment undoubtedly was presented to the Appropriations Committee. The Senator knows that in the eighties the Appropriations Committee assumed more jurisdiction in the matter of claims de novo than it does now, in view of the Budget system. If the Appropriations Committee had not been satisfied that the amount which was included hi the appropriation bill was all that was due, it would have recommended an additional amount; or, if the claimant believed that the amount of the judgment was inadequate, undoubtedly the claimant would have presented the matter to the Appropriations Committee of the Congress, and sought then an additional appropriation above the amount of the judgment.
Mr. GILLETT. Why, no, Mr. President; the Senator obviously misconceives the situation. The Appropriations Committee could not pay anything more than the judgment of the Court of Claims. It had absolutely no jurisdiction; and until a bill was introduced and passed Congress, there was no authorization for an appropriation.
Mr. KING. Will the Senator pardon me again?
Mr. GILLETT. Yes; but I hate to take the time.
Mr. KING. Is the Senator correct in stating that in the eighties and nineties, and indeed until quite recently, the Appropriations Committee did not have full jurisdiction over any claim that might be presented to it, whether the claim was founded upon a judgment of the Court of Claims or otherwise?
The Senator knows that the Appropriations Committee had plenary power to consider claims that were presented; and oftentimes it recommended appropriations in bills which were brought to the House or to the Senate far in excess of any judgment that had been rendered; and, indeed, it recommended, in the bills which were submitted to the Senate and to the House, appropriations for which no judgment had been rendered iu the Court of Claims or In any other legal tribunal.
Mr. BAYARD. Mr. President, may I suggest to the Senator from Utah a rather Interesting fact in the payment of this particular claim as to principal, and that is that there were two payments. It was not paid in toto at first. It was paid about half, roughly speaking, the first time, and in the next Congress the balance was paid. So it would appear that the practice at that time was, first, that the Court of Claims under the law was unable to do anything more than give a definite judgment for the whole amount of the principal, and could not give a judgment for the interest, if there be interest, on it— and there was interest, of course, under the circumstances I have described, or should have been interest paid—and, on top of that, Congress in those day was very unresponsive so far as speed was concerned, and it took two Congresses to get this claim wholly paid.
So I think it evidences the temper of Congress at that period that it was not in any hurry to pay the claim; and, as I say, it took some time to do it. It may have been that the Treasury was in straits; I do not know; but the record discloses beyond a doubt that it took two bites of the cherry before the claim was finally paid after the rendition of the judgment in the Court of Claims.
Mr. KING. Mr. President, will the Senator yield?
Mr. BAYARD. I yield.
Mr. KING. I ask for information: Why does the Senator slate that the Court of Claims could not render judgment for any sum in excess of that which it did render? Why does he make the statement that it could not render a judgment for interest upon a valid claim if there was a valid claim? May we not assume that the Court of Claims, taking into account all of the circumstances and conditions, felt that the amount for which the judgment was rendered was fair and just compensation for all that was due?
Mr. ROBINSON of Arkansas. Mr. President, will the Senator yield?
Mr. BAYARD. I yield to the Senator from Arkansas.
Mr. ROBINSON of Arkansas. I think the rule of law is that a sovereign is not liable for interest upon any claim presented against it. In order to hold the sovereign liable for such interest it is necessary to -secure the passage of a statute recognizing liability for interest.
Mr. BAYARD. I think there is no question about that. The principle involved is very well expressed by the Senator from Arkansas.
Mr. ROBINSON of Arkansas. That is the reason why the Court of Claims could not render a judgment for interest.
Mr. BAYARD. The Court of Claims, in the first place, could not legally give a judgment including the interest, and in the second place, legally could only give a judgment for the principal. The Court of Claims was absolutely circumscribed by the act empowering it to take charge of this case, and could only give thus and such a judgment; and that judgment, whatever it may be, could not include interest.
Mr. ROBINSON of Arkansas. It therefore becomes somewhat of an equitable qut-stion as to whether the Government will recognize liability for interest.
Mr. BA-YARD. It is solely a question, as stated by the Senator, as to whether the Federal Government, having knowingly received stolen property, and having used that property for 14 years, is willing or unwilling to pay interest upon the use of that money.
Mr. BRATTON. Mr. President, will the Senator from Delaware yield?
Mr. BAYARD. I yield.
Mr. BRATTON. If the Senator will tolerate a further ii> terruption, does the Senator subscribe to the statement made by the Senator from Arkansas that this claim is an equitable one, and that it has sufficient equities to appeal to the Congress to reimburse this bank for the use of its money hypothecated iu fraud and corruption and to compound a felony?
Mr. BAYARD. I do not agree with all the Senator's statement; and I may say, very frankly and courteously, that 1 do not think his presentation of it is quite a fair one.
Mr. BRATTON. I should be glad if the Senator will point out wherein it is unfair.
Mr. BAY'ARD. I do not mean to be discourteous, but in this way: He says the whole thing was conceived in fraud. All right; admit all that; but the point I am trying to make is that the Government took this money, knowing it to be stolen money; it kept this money knowing it to be stolen money, and for a period of 14 long years it utilized this money, knowing all the time that it was utilizing stolen goods. I quite agree with the Senator from Arkansas and with the Senator
from New Mexico that this claim Is only a claim founded in equity, and, more than that, I think, in decency. The Government knew what it was doing all this time. It was using stolen money, knowing that it was stolen.
Mr. BRATTON. Mr. President, may I ask the Senator what equity one conspirator in a fraud has against another conspirator therein?
Mr. BAYARD. Mr. President, it seems to me that the Senator's proposition, as I say, is not exactly a fair presentation, for this reason:
The bank was not a party to this conspiracy. Its dishonest cashier was a party; but in being a party to the conspiracy he iu no wise represented the bank in his official capacity. Hi? took advantage of his official opportunity to lay his physical hands upon something, and used it, which officially he had no right to use in that way.
Mr. LOCIIER. Mr. President, will the Senator yield for a question?
Mr. BAYARD. I yield.
Mr. LOCHEIi. What interest, if any, dtd the cashier have iu tills bank? What part of the bank did this cashier own?
Mr. BAYARD. I do not know that he had any interest in it beyond his official salary.
Mr. WALSH of Massachusetts. Mr. President, the merits of this bill have been so well explained by the Senator from Delaware [Mr. Bayard] that no further explanation is necessary. I want to point out the fact that the Committee on Claims on four occasions have reported this measure, and reported it favorably. That means that the committee intrusted with the responsibility of studying the merits and demerits of this legislation have decided that in equity and in decency, as stated by the Senator from Delaware, it ought to be paid.
We ought to decide this question now once for all and either vote for this measure or vote against it. Twice already the Senate has voted favorably, and the Committee on Claims four times. These litigants ought to have a decision. It seems to me that the equities in the case clearly point to and favor the enactment of this legislation.
Mr. KING. Mr. President, will the Senator suffer an interruption?
Mr. WALSH of Massachusetts. Certainly.
Mr. KING. Has the Senator examined the bill which was pas>ed by Congress, evidently along iu the early eighties, by which the matter was referred to the Court of Claims?
Mr. WALSH of Massachusetts. Yes, sir.
Mr. KING. Does that bill restrict the Court of Claims to a finding for the principal only; or does it not submit the matter to the Court of Claims to render a judgment upon the entire controversy? I feel confident that must have been the bill, because Congress would not have wanted to settle this matter in piecemeal.
Here was a claim presented to Congress. I believe that Congress must have said in the bill, "This whole matter is referred to the Court of Claims for the bank to present its demands and the Court of Claims to hear the testimony and render a judgment for whatever is due to the plaintiffs "; and the judgment then rendered was $371,000, which was paid by the Government. Does the Senator say that the matter is in piecemeal, that it was not fully litigated, that the claim was not fully discharged by the suit?
The Senator is an able lawyer. He knows that the court does not favor piecemeal litigation and the cutting of matters in two, segregating contracts and rendering different judgments growing out of the same transaction.
Mr. WALSH of Massachusetts. It is a fact that the Court of Claims did not render any judgment for interest.
Mr. KING. How does the Senator know that the bill did not require the court to find the entire amount due, and pronounce judgment accordingly? And if the court failed to give as much as it should have done, it was res adjudicata. That ended it; and why should we take ty> the matter again?
Mr. ROBINSON of Arkansas. Mr. President, may I answer the Senator from Utuh in that connection?
Mr. WALSH of Massachusetts. I yield to the Senator from Arkansas.
Mr. ROBINSON of Arkansas. The proceeding was not by bill. It was upon petition in the Court of Claims. The bank filed its petition before the court, alleging the conversion of this fund; and the court found in the full amount of the claim. It did not find interest, because, in all probability, it had no authority under the law authorizing the hearing of such claim*. The record is not clear upon that point, but I notice
Mr. BAYARD. Mr. President, will the Senator from Massachusetts yield to me?
Mr. WALSH of Massachusetts. I yield to the Senator from Delaware,
Mr. BAYARD. May I state to the Senator from TTtnh (lint the bank went into the Court of (Maims to'sue the Government as of right under the then statute covering claims of that kind. It did not require any special act of Congress for that purpose. There was at that time a law upon the statute books allowing claimants to come into the Court of Claims, and the bank pursued that right; and, even so, under the then law it could only lay claim to the principal, and could not lay claim to interest.
Mr. KING. Is the Senator sure of that?
Mr. BAYARD. Absolutely sure.
Mr. WALSH of Massachusetts. Mr. President, I want to call attention again to the fact that I have never spoken to a member of the Committee on Claims on this matter, and I do not believe my distinguished colleague [Mr. Gii.lett] has. Tins committee, sitting in judgment upon this claim, examining all phases of the subject, have on four previous occasions, and again during this session of Congress, given it unanimous approval.
Mr. BRATTON. Mr. President, will the Senator yield?
Mr. WALSH of Massachusetts. I yield.
Mr. BRATTON. Notwithstanding that, has a fair statement of the salient facts involved in the transaction been made here this evening?
Mr. WALSH of Massachusetts. I consider that the Senator from Delaware [Mr. Bayahd] is entirely impartial, has absolutely no personal interest of any kind or description in the matter, and that he honestly and conscientiously believes this bill a meritorious one, or he would not have advocated It.
Mr. BRATTON. Oh. certainly. I did not mean even to intimate anything to the contrary. The Senator from Massachusetts will not accord the Senator from Delaware any higher compliment in that regard than 1 will take pleasure in according him.
Mr. WALSH of Massachusetts. I am sure that Is true.
Mr. BRATTON. But the point is this: The Senator from Massachusetts is now laying stress upon the fact that the Committee on Claims has reported favorably on the bill. I ask him if a fair statement of the salient facts involved in the transaction has been made to the full Senate this evening?
Mr. WALSH of Massachusetts. I certainly believe a failstatement has been made.
Mr. BHATTON. If so, they are few. They are narrow in scoi>e. What particular significance has the report of the committee, then, when nil the facts are presented to the Senate fairly, as the Senator from Massachusetts in his usual frank manner admits?
Mr. WALSH of Massachusetts. I think the difficulty with the reasoning of the Senator from New Mexico is that somehow or other he thinks that the stockholders of this bank are responsible, and ought to assume the blame and losses for which the negligent officials are responsible.
I can not follow his reasoning in claiming that the stockholders are to blame for the neglect or criminality of an official of the bank. They are innocent parties, and they should not be held to lose because of the criminality of an official.
Mr. BRATTON. Then, Mr. President, if the genial Senator from Massachusetts will yield to another question, ho undertakes to support the claim on the theory that although the cashier of the bank was a party to the criminality involved, the bank is not bound by his action.
Mr. WALSH of Massachusetts. I certainly do adhere to that. It would not be any more bound than I would be bound by an agent of mine who stole my automobile and sold it to somebody else. I would have a right to get my automobile back, and I would have a right to be repaid for any losses I sustained. I am not responsible for the acts of a criminal agent.
Mr. BARKLEY. Mr. President, will the Senator yield?
Mr. WALSH of Massachusetts. I yield.
Mr. BARKLEY. Instead of this being the money of the stockholders of the bank, if it had been the money of depositors or others who had placed it there in charge of the hank, and the cannier, acting in his official capacity, had stolen that and converted it to the use of this embezzling Government officer, would the stockholders be liable for the acts of the cashier in that case?
Mr. WALSH of Massachusetts. Certainly not.
Mr. BARKLEY. He would not?
Mr. WALSH of Massachusetts. That is my opinion.
Mr. BARKLEY. Does the Senator think there is any greater obligation on the part of the Government to reimburse stockholders for the money that an embezzling cashier stole from them than would be true if it had been other people's property deposited in the bank in the care of these trusted officers?
Mr. WALSH of Massachusetts. The stockholders are not so Leld liable.
Mr. BARKLEY. What is the present law with reference to the payment of Interest on claims of this sort, if such a claim were submitted to the Court of Claims now? Would there be any authority in law to pay more than the principal involved?
Mr. WALSH of Massachusetts. I can not answer.
Mr. BAHKLEY. Will the Senator from New Mexico answer that question, or will the Senator from Delaware answer it? If this were a new claim being presented under the law which now exists, would the Court of Claims have any right to consider the claim for interest?
Mr. BRATTON. It is my understanding that the Government is not. liable for the payment of any interest, that the payment of interest rests u|xm the moral concept of the Government, or the equities of the situation.
Mr. BARKLEY. It has always been my understanding that in cases of property taken by the Government during war, or under any other conditions, although tbe owner may lie deprived of the benefit of the property for as long a period as is involved here, there is never any interest paid, either on recommendation of the Court of Claims, or by any special act of Congress. Is that correct?
Mr. BRATTON. That is my understanding. Will the Senator from Massachusetts yield for another question?
Mr. WALSH of Massachusetts. Certainly.
Mr. BRATTON. Suppose the deposits of this bank had l>een $100,000 and its capital stock had been $50,000, and tbe $100,000 belonged to 500 depositors, and the cashier had absconded with every bit of that proiKM'ty, money deposited by tbe depositorsCould the bank have repudiated that and said that it was not liable because its cashier had absconded with money belonging to its depositors?
Mr. WALSH of Massachusetts. I think not.
Mr. BRATTON. The bank would be liable for tbe action of its cashier?
Mr. WALSH of Massachusetts. That is my opinion.
Mr. BRATTON. Then in taking property criminally, as we must concede, that belonged to the Government, how does the bank escape being responsible for the act of the cashier in that respect?
Mr. WALSH of Massachusetts. I think the Senator has omitted one salient fact from the circumstances in this case, that the Government held this money for 14 years, knowing that it was stolen money, and had the use of it and the benefit of it for 14 years, and if anybody connived with the bank officials to hold the money for 14 years, and then use it, they would be responsible to the stockholders.
Mr. FLETCHER. Mr. President, may I ask the Senator a question?
Mr. WALSH of Massachusetts. Certainly.
Mr. FLETCHER. I understood the Senator from Delaware to say this was not all cash, that there were some securities, and that the Government clipped the coupons from these securities and collected them.
Mr. WALSH of Massachusetts. Absolutely.
Mr. FLETCHER. So the Government collected the interest on these securities during the time it held the securities.
Mr. WALSH of Massachusetts. For 14 years it used the securities as if they were its own.
Mr. FLETCHER. The question in my mind is whether, in entering this judgment against the Government, that interest was not included, as well as the principal sum.
Mr. WALSH of Massachusetts. The Senator from Delaware says it was not. He has examined the legal authorities and the details of the case.
Mr. FLETCHER. It looks to me as if. when they came to sue in the Court of Claims, they would have set up not only the original deposit of the securities to the amount of $370,000, but whatever the Government collected on those securities in the way of interest coupons. It looked as if that would have been included in the judgment.
Mr. WALSH of Massachusetts. Does the Senator from Delaware know about that?
Mr. GILLBTT. Mr. President, the Court of Claims did not have jurisdiction under a special act in this matter. The case was brought under the general jurisdiction, and at that time the Court of Claims was not authorized to award interest, its jurisdiction in the matter of interest being confined to cases of contracts expressly stipulating the paying of interest.
Mr. ROBINSON of Arkansas. Mr. President
The PRESIDING OFFICER. Does the Senator from Massachusetts yield to the Senator from Arkansas?
Mr. WALSH of Massachusetts. I yield to the Senator.
Mr. ROBINSON of Arkansas. May I ask the senior Senator from Massachusetts a question?
Mr. GILLETT. Certainly.