Part 14

The next suspicious circumstance, gentlemen, is that we bid. That is a suspicious circumstance. Miner bid, Peck bid, and John W. Dorsey bid. And the suspicious circumstance is that they did not bid against each other. Why should they? I was at an auction the other day and unconsciously bid against myself, but I did not think it any evidence of rascality on my part; I thought it tended to show that I was not attending strictly to business, and yet it is brought forward as a suspicious circumstance that these gentlemen did not bid against themselves. Another suspicious circumstance is that they bid in their individual names. That is the way all the bidding is done, I believe. I believe every bond has to be signed by the individuals and not by any partnership. That I believe to be one of the regulations of the department. Well, there is no rascality yet, as far as I can see. Now, when the contract is accepted--I will come to the bidding question again--the contractor has to give a bond. One of those bonds will be put in evidence in this case. You will see what the contractor is bound to do. Then it can be subcontracted. You will find that the contract given by the subcontractor to the department is not a hundredth part as severe as the bond the contractor gives to the Government. In the contract that we give to the Government certain things are provided. You will find that a copy of it will be intro duced. The contractor is left to the mercy of discretion-I believe that is the word--of the Postmaster-General You will find that if he fails to carry the mail one trip, no matter by what he may be prevented, by flood or storm or fire, he is not to be paid for it. Although he is there ready with his men and horses, if he is prevented by the elements he has no pay. If the Postmaster-General thinks he ought to have carried it when he did not, he can take from his pay three times the value of the trip. He can take from him one quarter's pay. He reserves in his own breast the power to declare that contract null and void, because in his judgment the contractor has not done his duty. Everything is left to him. The man who signs that contract gives a mortgage on his life, liberty, and pursuit of happiness. He has no redress. I simply call your attention to this to show you the obligation that a contractor takes upon himself. We will show you that he is under obligation to discharge any carrier that the Government does not like; that he has no right to carry any package or any letter that can go by mail; that he is to forfeit a trip when it is not run, or not to exceed three times the pay of a trip; that he is to forfeit one-quarter of a trip if the running time is so far behind that he fails to make connection with the next mail; that if he violates any of these provisions he forfeits a penalty equal to a quarter's pay, or if he violates any other provision touching the carriage of the mail and the time and manner thereof, without a satisfactory explanation in due time to the Postmaster-General, he can visit a penalty in his discretion, and the forfeitures may be increased in the penalty to a higher amount, in the discretion of the Postmaster-General, according to the nature or frequency of the failure and the importance of the mail. Provided that, except as specified, and except as provided by law, no penalty shall exceed three times the pay of a trip in each case.

It is also agreed by the said contractor and his sureties that the Postmaster-General may annul the contract for repeated failures; for violating the postal laws; for disobeying the instructions of the Post-Office Department; for refusing to discharge a carrier when required by the department; for transmitting commercial intelligence or matter which should go by mail; for transporting persons so engaged as aforesaid; whenever the contractor shall become a postmaster, &c.

It is further stipulated and agreed that such annulment shall not impair the right to claim damages from said contractor and his sureties under this contract; but such damages may, for the purpose of set-off or counter-claim in the settlement of any claim of said contractor or his sureties against the United States, whether arising under this contract or otherwise, be assessed and liquidated by the Auditor of the Treasury for the Post-Office Department.

And it is further stipulated and agreed by the said contractor and his sureties that the contract may, in the discretion of the Postmaster-General, be continued in force beyond its express terms for a period not exceeding six months. You will see, gentlemen, how perfectly, how absolutely, the contractor is in the power of the department. The Government enforces its contracts. No matter how many years may elapse they are still after the sureties and are still after the principal. Nothing relieves a man but, death. Only a little while ago a case was decided in the Supreme Court of which I will speak to you. An importer of sugar gave the importers' bond to pay the duty upon that sugar. By the custom of trade, sugar is sold in bond.

The importer sold to a third person and the third person went to get the sugar. By law he could only take it after paying the tax; and yet one of the officers of the Government, contrary to law, allowed him to take the sugar without paying the tax. The Supreme Court has just held that the original importer and his sureties are liable to pay that tax--the man who took the sugar out having become bankrupt--although the sugar was given to the second party simply by a violation of law, and that law was violated by one of the officers of the custom-house without the knowledge or consent of the original importer. I tell you, gentlemen, whenever a man gives a bond to this Government the Government stays with him. The Government does not die; the Government does not get tired; the Government does not get weary. The Government can afford to wait, and the poor man with the bond hanging over him cannot go into business, cannot get credit, but just lingers out a life of expectation, of hope, and of disappointment. I trust none of you will ever sign a bond to the Government. There is another thing, gentlemen. If you bid on a hundred routes and they are given to you and you put the service on ninety-nine of the routes and carry it in accordance with the contract, and yet fail on the hundredth route, the Postmaster-General has a right to declare you a failing contractor. A failing contractor on the hundredth route? Yes. On any more? Yes; on every one. And whoever is declared a failing contractor on one route is by virtue of that declaration a failing contractor on all. They are all taken from him. So that when a man bids for more than one route, for instance, a hundred or a thousand, and gets them and carries them all absolutely according to his contract but one, he can be declared a failing contractor on all. What does that mean? It means not simply ruin to him, but ruin to every one of his sureties, unless they are in a condition to go on and carry the mail. I want you to understand something of the obligation of a contractor with the Government of the United States.

Now, I come to the bidding. These bids were made with a full understanding of the obligation of a bidder. Messrs. Miner, Peck, and John W. Dorsey bid, I believe, on about twelve hundred routes. You see you are in great luck in bidding if you get one route in fifty that you bid upon. In the first place, there are about ten thousand star routes. I do not know that it is too much to say that the number of bids runs up into the hundreds of thousands; somewhere in that neighborhood. Hundreds of men often bid on one route. Consequently, nobody who bids expects to get more than a few of the routes for which they bid. Now, is there the slightest evidence in the statement of the Government as to the frauds in this bidding? Let me tell you how some frauds have been committed. Suppose, for instance, this was a fraudulent business, and Miner, Peck, and Dorsey were bidding. Let me explain it to you. I want you to know it. All there is in this case is simply to have you understand it. That is all there is. And if you do not agree with me when we get through the case I shall simply think that you have not comprehended it. Say that four men bid on the same route, one man four thousand dol-ars, another man three thousand dollars, another man two thousand dollars, and another man one thousand dollars.

Now, the man who bids one thousand dollars is of no account, has not a dollar in the world, and so when the bid is given to him he does not want it. He is what they call a straw man. The law provides then that the next man may have it. The law does not provide that he must take it. He may have it if he wants to, but you cannot force him to take it, because he is not the lowest bidder. He is the two thousand dollar man. He is another straw gentleman. He does not want it. Then the Government offers it to the next man at three thousand dollars. He is another chap made of hay. He says he doesn't want it. Understand the Government cannot force these straw and hay men to take it. Then they go to the fourth fellow, who bid four thousand dollars. It is a good thing at four thousand, and he says, "Yes; I will take it." That is what they call fraudulent bidding. If you had found Dorsey and Miner and Peck bidding on the same route and one of them failing and another one taking it, you would not only have suspected fraud, but you would have known it. Now, if it is a badge of fraud for them to bid upon the same route and apparently against each other, I will ask you if it is not a badge of fair dealing that they were not found bidding against each other. They bid on about twelve hundred routes, and much to their astonishment they got one hundred and thirty-four contracts.

You have heard here a great deal of talk about the number of men and horses. We will show you all about it. Men differ upon this subject. If men did not differ upon it at all these bids would be alike. Instead of being a dozen bids, all different, and differing sometimes as much as ten, twenty, thirty, forty, or a hundred dollars or more, they would bid the same. If they all agreed on the number of horses and men it would take, and about what it would cost, they would bid about alike, wouldn't they? But when they are bidding they honestly differ. One man says it would take twenty horses, and another says "no, it will take forty." Do you not know that the number of horses depends a great deal upon the kind of man who makes the estimate. Here is a man who is hard and brutal, and he says a horse can do so much work. He says it is cheaper to buy him and wear him out than it is to feed him decently. You have known men who were perfectly willing to make fortunes out of a horse's agony, and out of animal pain. There are hundreds of them in the world. Now, take it on horse railroads, and with freighters, and teamsters. Whenever you find a mean, infamous man, if he cannot whip his wife, he will take his spite out on his horse. If a man is a good, broad, generous, free fellow he will say, "I don't want to work that horse to death; I think it will take four horses. I am going to keep my horses fat, and I am going to treat them as a gentleman should." Another man, a wretch, will come up and swear it would not take more than fifteen horses. When his horses are through the service you will simply see a pile of bones wrapped in a lamentable hide. You understand that.

Well, these men made twelve hundred bids and got one hundred and thirty-four contracts. Ah, but they say, here is another badge of fraud, another badge. Ah, they bid on small routes, on cheap routes, on routes where the mail was carried infrequently and on slow time. If it is a badge of fraud to bid on such routes the Government can never let out any more. Most of these routes were cheap routes. Now, I owe it to you to give you the reason for this. We will prove in the first place that these men were not rich men. If they had been very rich they probably would not have gone into the business at all. They would have gone into that perfectly respectable business of buying Government bonds. They would have bought Government bonds and made other fellows pay the interest, and twice a year they would have formed a partnership with a pair of shears, and thus in the sweat of their faces they would clip their coupons. They bid on poor routes. Why? They were poor, comparatively speaking.

They had not the money to stock the expensive routes where four horse coaches were run. They preferred to take the cheaper lines. Why? Because they could stock them. They would have been able to have stocked the routes if they had only obtained the number they expected. But as I told you, they got many more routes than they expected. Was that for the benefit of the Government? How did these men come to bid so cheaply on some of these routes? I will tell you. Because they had the information, because they had received the facts from all the postmasters on the routes, and consequently they made a good close calculation, and the result was that their bids were below others, and the fact that their bids were accepted saved the Government hundreds of thousands of dollars. When they found themselves with all these contracts, the first hard work they did was to give away all they could. That was the first hard work. They had contracts, not for sale, but just to give, and they succeeded in giving away several of them. I believe they sold two of these children of conspiracy for the enormous sum of one hundred dollars each. That was the highest sale they made at that time. Afterwards another route was sold which I will explain when I come to it. Now there is no rascality yet. No fraud yet. No conspiracy yet. Well, they then went to work to get their bonds. But first let me say that there was another reason for bidding on cheap routes. Whenever the bid is above five thousand dollars, then the man who bids must, at the time he bids, put up a check for five per cent, of the amount.

A check certified by a national bank. For instance, if it all comes to a hundred thousand dollars he has got to put in a certified check for five thousand dollars. Even in the little bids we made we had to deposit with the Government some twenty-six or twenty-eight thousand dollars, and I do not know but more, in cash, or what is the same as cash, for the bank certifies that the money is there. That is another reason they bid on smaller routes. What is the next? The Government asks such frightful bonds, such terrible amounts, that a man must be almost a millionaire, or else there must be a confidence in him that is universal, before he can give these bonds.

There was one route at this very bidding where they had to give bonds for six hundred and forty thousand dollars, and the sureties upon these bonds under oath had to testify that they had real estate to the value of six hundred and forty thousand dollars, exclusive of all debts, dues, and demands. So there was another reason for bidding upon small routes. Where the amount was under five thousand dollars no certified check had to be deposited, and the smaller the route of course the smaller the bond.

Now, I have endeavored to show you the reasons that we bid upon these routes instead of upon the larger ones. The reasons as stated by the Government are that we took these routes where the service was once a week, so that we could have the service increased; that we took those routes where the time was long so that we could have it shortened, that is to say, expedited. But I tell you that when a perfectly good reason lies at the very threshold of the question you have no right to go further. The reasons I have given to you it seems to me are perfect and you need no more.

Now, then, we got, I say, about one hundred and thirty-four routes. Of these, one hundred and fifteen are without complaint. There is not a word about the other one hundred and fifteen. Recollect it. We got one hundred and thirty-four routes. In this indictment are nineteen; one hundred and fifteen appear to be perfectly satisfactory to this great Government. There is not a word as to those routes, not one word, I say, as to one hundred and fifteen routes, and they want you to believe that these defendants deliberately selected nineteen routes out of one hundred and thirty-four about which to make a conspiracy, and that they left one hundred and fifteen to go honestly along, but picked out nineteen for the purpose of defrauding the Government.

Now, then, when these gentlemen found themselves with these routes, the next thing was to put the stock and the carriers upon them. As I told you, a good many more had been awarded to them than they anticipated. They had not the money. So, in putting the stock upon several of the routes, they found it necessary to borrow some money, and here comes another suspicious circumstance. Mr. Miner borrowed some money of Stephen W. Dorsey, and everybody is astonished that any man would be mean enough to loan money to another; that any man could so far forget the dignity of the office that he held as to help a friend. Their idea of a Senator is of such a lofty and dignified character that he ceases to take interest in anything except national affairs; that after he has been sworn in he forgets all the relationships and friendships of the world, and the idea of asking him to loan money seems, to the prosecution, to be the height of unconstitutionality. But as a matter of fact he did loan some money, and we will show you how that loan was treated, showing you that at that time he had not the slightest interest in it. He loaned some money, and kept loaning money until, I believe, he had given them about sixteen thousand dollars to get these routes on. Then he, being on his way to New Mexico, met in the city of Saint Louis John R. Miner, who at that time was coming back, I think, from Montana or Dakota, where he had been putting stock on a route. Miner saw Dorsey in Saint Louis, and said to him, "We have got to have a little more money, and I want you to indorse my note or to loan me your note and I can get it discounted in the German-American Bank in Washington." Finally, Dorsey said to him, "You have already obtained from me about sixteen thousand dollars: I will give you the note you ask, or indorse your note upon one condition, and that is that you shall give me orders"--what are called Post-Office drafts--"not only for the amount of this note, but for the amount of the sixteen thousand dollars." We shall insist, gentlemen, that that evidence shows exactly our position, and that you are entitled not only to draw from it, but that you must draw from it the inference, the fact, that we had no interest in those routes. Finally that was agreed to.

Now, understand it, at that time a contractor with the Government who had agreed to carry the mail for a certain time could give what are called post-office drafts or orders--you know, orders on his quarterly pay--and they would be taken to the proper officer in the Post-Office Department and they would be accepted, not for the full amount, understand, but for any amount that might be due that contractor. For instance, he might fail to carry the mail, he might be fined, and consequently the amount of that draft might not be there, so that the only thing the Post-Office Department agreed to do was to pay upon that order or draft anything that was due to the contractor. That was done at that time, and why? Because there was no way other than that to secure these advances. So he gave these drafts. He came on to Washington. The note was put into the German-American Bank. The orders on the Post-Office Department were filed with it, and the money advanced by the bank and charged to Stephen W. Dorsey. That made, then, at that time about twenty-five thousand dollars that Dorsey had advanced. That being done he went on about his business.

Now, I will show you what happened after that. I think the note in the German-American Bank was nine thousand dollars or ten thousand dollars, I have forgotten which. Dorsey then went on to New Mexico from Saint Louis, and remained there, I believe, until December, 1878. Now, I want you to understand this, because here turns a very important question, and a very important point. Now, you recollect the information about these bids was collected in the autumn and winter of 1877. The last bid was to be put in, I think, February 28, 1878. Now, this was in the August of that year, 1878. Still being pressed for money, Miner, Peck, and J. W. Dorsey were in danger of being declared failing contractors. Now, recollect it. We will show that at that time Brady, who, according to the Government, was a co-conspirator, threatened to declare Dorsey, Peck, and Miner failing contractors, and if he had declared them failing contractors even on one route that was the end of all. At that time Miner and John W. Dorsey sought out Mr. Harvey M. Vaile, and let me say that is the first appearance of Mr. Vaile in these contracts. He knew nothing about the bidding, was not in Dorsey's house, knew nothing about the letting. That is his first appearance in these contracts, August, 1878. Now let us see what he did. He was a man of means. He had some money; had been, I believe, for a long time engaged in carrying the mails; understood the business. They will tell you that is a suspicious circumstance as to him, and that the fact that that was John Dorsey's first experience is a suspicious circumstance as to him. Really to avoid suspicion you would have to have a man that had been in it a long time but never had anything to do with it. They got him, and offered what? To give him a third interest in this entire business. I think that was it. They were to give him a third interest in this entire business, a business that had been born of conspiracy, a business that had as a silent partner the man who fixed the amount of money to be paid. Think of that. According to the statement of the Government, here was a conspiracy full-fledged, perfect in its every part, flanked by the Second Assistant Postmaster-General, buttressed by all the clerks they desired, and yet that conspiracy got so hard up that in August, 1878, nine or ten months after its creation, it was willing to give a third to anybody who would advance a little money to carry the thing on.