ment, you will find that in reference to that issue of bonds to Massa chusetts for the account of Maine's claim growing out of the northeastern boundary question, the amount appropriated by Congress was six hundred and seventy-eight thousand and some hundreds of dollars, to be paid in bonds. When the appropriation was made I was very anxious to have the transaction appear as it should on the books of the department, and in consultation with Mr. Taylor I arranged to have it so, because in the act providing for that there was an appropriation. I put the money to the credit of an appropriation account on the books, six hundred and seventy-eight thousand and whatever the hundreds were, and issued a warrant directed to the Treasurer of the United States to pay that, and directing him to deposit the amount to the credit of loans as a subscription for those bonds, so that it appears in the accounts as a disbursement of moneys from the Treasury to pay the debt and a receipt of money into the Treasury to buy the loan.

Q. You say that act made an appropriation?-A. It authorized the transaction.

Q. It authorized bonds to be issued to pay that claim?-A. And, I think, made an appropriation also.

Q. Suppose it had not made an appropriation; suppose, as in the Eads jetty matter or as in the Revolutionary debt, there was an act directing so many bonds to be issued to pay a certain debt, how would you manage if there was no appropriation made?-A. You have in the statement of the public debt an exact case like that, the Oregon war debt. There was no appropriation made, but bonds were issued directly to the claimants in payment of money, but no money ever came into the Treasury.

Q. How did you manage that?-A. The entry could not be correctly and legally made without a change in the law so as to authorize the accounts to be kept in the way I have suggested; but I did not prepare a bill with that end in view.

Q. But no such law has ever been passed ?-A. No, sir.

Q. And yet the entries were all made?—A. You mean the entries are all made in the books?

Q. Yes?-A. Certainly.

Q. Then they were made without law, but believed to be correct?—A. The entries are not made by Receipts and Expenditures.

Q. Of course not?-A. They are made by Issues.

Q. That is just my point, that you cannot make them by Receipts and Expenditures and must do it by Issues?-A. The only account since the 1st of July, 1871, that I recall in which that condition of things occurs is in that northeast boundary case I have just spoken of. I know of no other except the Eads jetty issue, and I have no idea of how they did about that.

Q. As to the general Receipts and Expenditures, the tables appear dif ferent previous to 1870 and subsequent to 1870. Did you examine the general account of Receipts and Expenditures to find errors when you made your general examination ?-A. Not personally. It was done under my direction.

Q. How long were they at it ?-A. That I cannot say. Whenever an error was found it was corrected, or a note was made of it calling attention to it, and in our subsequent tables the correct statement was made. Q. Were the examinations made from the books themselves or from the printed Receipts and Expenditures ?-A. I think they were all made by the clerks from the books themselves, in comparison with the printed books of course.

Q. Do you know whether they compared the books in the different

offices-the Secretary's, the Register's, and Comptroller's--to see whether they agreed?-A. The rule was when I came to the department not to do anything of that kind; but if you have examined the accounts from the time I took charge of the Warrant-Office until I left it you will find that the comparisons were made monthly, and if errors were discovered they were hunted up and corrected until the books agreed. Prior to that time this was not done so far as I know, except that ledger ac counts were compared and made to agree annually.

Q. And had you a clerk or clerks engaged in that matter?-A. I never had but two clerks who did the work of examination of the debt accounts, and they were not permanently engaged on that work. They had other duties.

Q. How long were they at it?-A. I could not state. I presume that on and off they were engaged on that work at all their leisure, all the time they could spare from other duties, from the time I began my examinations in 1869 until I left the department, and perhaps after I left they continued it. I do not know. Under my direction they continued at it all the time I was in the department.

Q. Bear in mind that the table with the different figures appears in the report of 1870.-A. If it appears in the report of 1870, then they. were about eighteen months at it up to that time. I was under the imFression that it was not until 1871 that those changes were made, but I find now, upon looking at the reports, that they were made in 1870.

Q. You have stated that you made certain reorganizations in the early part of your service as chief clerk of the department. What were they generally?-A. I reorganized the Secretary's office into divisions, charging each division with a specific part of the work.

Q. What divisions did you make, do you recollect?-A. I cannot tell you unless I had the report I made to the Secretary on the subject. Q. You made the Warrant Division, did you not?-A. I made a Warrant Division, an Independent Treasury Division, a Customs Division, an Ap, ointment Division, a Revenue-Cutter and Life-Saving Division. Q. A Loan Division?-A. That had existed independently long prior, but it was one of the divisions; a Treasury Note Division, and some others, perhaps. I think probably the business was divided up into fifteen different classes, and to each class of work or business was assigned a chief, who was responsible for the proper performance of the duties of that division, with clerks to assist him.

Q. At that time there was no law authorizing it, and it was legalized by what is known as the Kellogg bill in 1874 or 1875. Is that so or not? -A. That is so; there was no law authorizing it, but there was nothing done in making this organization that contravened any law. It was simply organizing a force of men that were authorized by law to be employed, into companies, and regiments, and battalions, for the sake of convenience and system in transacting the business. There was no increase of compensation except such as was authorized by law.

Q. Was there a change from the Register's office to the Loan Division of the Secretary's office as to the issue of bonds at the time you made that reorganization. Have you any recollection on that point?—A. I do not recollect that there was any change made in reference to those duties.

Q. Do you recollect whether there was a change of any kind made as to the cancellation or destruction of imperfect bonds or notes-there is always a percentage of imperfect paper for printing bonds or notes returned from the printing bureau to the Loan Division, is there not ?—A. Yes, sir.

Q. Do you recollect whether there was a change of any kind made in connection with that by you at any time?-A. You mean a change in the method of checks or receipts for destruction?

Q. Yes.-A. I have an indistinct recollection that I did institute some additional checks there, but I could not tell you what they were without an examination to refresh my memory.

Q. Have you any recollection, in making up your debt statement, of what is known as the Pacific Railroad bonds, a debt of about $58,000,000 in round numbers?-A. Yes, sir.

Q. Do you recollect whether or not these bonds had been in the public-debt statement and treated as a part of the public debt up to 1869 ?— A. I think these bonds were treated as part of the public debt prior to the time of Mr. Boutwell taking charge of the department.

Q. When was that item dropped from the public debt of the United States and treated as a separate Pacific Railroad debt?-A. I think it was in March or April, 1869. When Mr. Boutwell took charge of the department one of the first acts of his administration was to take it out of the body of the debt, if my memory serves me, and put it by itself as a Pacific Railroad debt.

Q. Ought that. or not, to have reduced the total amount of the public debt the exact amount of what was known as the Pacific Railroad debt?-A. It should have reduced the principal of the debt by the amount taken out, of course.

Q. That amount was about fifty-eight million dollars?-A. $58,638,320 on the 1st of July, 1869, but on the 30th of June, 1868, the amount was only $29,089,000.

Q. What was the amount at the time it was taken ont?-A. On the 1st July, 1869, the total was $58,638,320, which was the first of the fiscal year following Mr. Boutwell's taking charge of the department.

Q. You have before you the debt statement as it existed on June 30, 1868, but signed by Mr. Boutwell, and dated May 20, 1869. You were in the department at that time, I believe?-A. I was.

Q. Were those statements made up under your direction?-A. I am inclined to think not. I do not recollect whether they were made under my direction or not; but I am under the impression that they were made by a gentleman by the name of Marsh, who was an unattached clerk in the department at the time.

Q. Can you account for the reason that statement purporting to give the debt in June, 1868, was made up in May, 1869?—A. I am inclined to think that the debt statement signed by Mr. Boutwell, and dated May 20, 1869, was made for the purpose of comparison with the debt statements subsequently made by him, and for the sake of getting a uniform basis of comparison.

Q. At the date that statement was made was the Pacific Railroad debt treated as a part of the public debt June 30, 1868?—A. On the 30th of June, 1868, I am under the impression that the Pacific Railroad debt was treated as a part of the public debt.

Q. In that statement now before you, is it treated as a part of the public debt?-A. It is not. It is not included in the amount of the debt which Mr. Boutwell says the government owes. It is in the public

debt statement.

Q. It is on the public-debt statement, you mean?-A. On the publicdebt statement, but not included in the recapitulation or gross amount. Q. It is treated there as a Pacific Railroad debt ?—A. Precisely.

Q. Now look at the Finance Report, made for the year ending with the same date, June 30, 1865, and see whether the Pacific Railroad debt

is not treated as a part of the public debt of the United States.-A. In the Finance Report of 1868, made by Mr. McCulloch, when Secretary of the Treasury, in table No. 3, at page Ivi, purporting to be a statement of the indebtedness of the United States on the 30th of June, 1868, there is an item "Acts of July 1, 1862, and July 2, 1864, bonds issued to the Pacific Railroad Companies,” in accordance with these acts, $29,089,000; and it would seem from that to be included in the public debt, and that Mr. McCulloch regarded it as a part of the public debt of the United States.

Q. In the Finance Report, submitted by Mr. McCulloch to Congress, the Pacific Railroad debt, amounting in round numbers to $29,000,000, is included as a part of the public debt?-A. Yes, sir.

Q. In the debt statement that was made by Mr. Boutwell, giving the public debt for June 30, 1868, it is separated and treated as a separate debt of the Pacific Railroad Companies?-A. Yes, sir; treated as bonds issued to the Pacific Railroad Companies.

Q. Do you recollect a letter written by you as chief clerk, for the Secretary, in 1871, to Mr. Allison, Register, in regard to some change that you wished in the manner of reporting the public debt?-A. Yes, sir. I think, perhaps, it covers more than that. I have not seen the letter for many years, but I think it probably covers all classes of ac

counts.

Q. (Exhibiting letter of November 24, 1871, of Mr. Saville to the Register of the Treasury, published on page 5 of this testimony.) Did you consult Mr. Boutwell before you wrote that letter?-A. I think I did.

Q. Do you recollect whether or not Mr. Allison had any personal interview with you in connection with that letter?-A. I presume he had, but I do not recollect that he had positively.

Q. Do you recollect whether or not Mr. Allison differed with you as to the propriety of making the changes which that letter directs?—A. I am inclined to believe that Mr. Allison did not agree with me as to the propriety of making the changes, and gave as his reason for that difference that he would prefer to have all of those corrections made after examinations had been made by his own clerks. That is my impression, and I also think that he instructed his clerks to make an examination. Dr. Guilford, and Major Power, who was then his chief clerk, if I am not mistaken, did make the examination, and prepared a printed statement of the differences with explanations, and satisfied Mr. Allison that I was right. I give this as my impression after the lapse of a number of years.

Q. Was the order obeyed ?-A. Yes; I think it was.

Q. In the Finance Report for the year ending June 30, 1869, the debt appears as it had been reported by the Register from the beginning of the government down. That report was made in Mr. Boutwell's administration while you were chief clerk, was it not?-A. I presume it was made by the Register of the Treasury. It was not made in the Secretary's office in 1869. If it is contained in the report of 1869, I think it came from the Register's office and was signed by the Register.

Q. Do you think all the reports from the commencement of the gov ernment down to 1869 gave the true amount of the public debt, or gave a false amount for each year?-A. Well, the reports of the government when taken altogether gave the correct amounts of the public debt derived from the data from which they were taken, and the discrepancies between the reports arose simply from the fact that they were made from different data.

Q. On page 317 of the Finance Report of 1869 is a statement purporting to be the amount of the public debt for each year from the organization of the government to 1869, is there not?-A. Yes, sir.

Q. Does that agree with the report made by yourself in 1870 and 1871-A. It does not.

Q. Do you think that statement is true or false?-A. The statement of the public debt in the report of 1869, on page 317, is a correct statement of the public debt from the books and accounts of the Register of the Treasury relating to loans and Treasury notes, or Issues and Redemptions, as they are sometimes called.

Q. If that be a correct statement for the year 1862 that we have heretofore referred to where there was $9,000,000 difference in round numbers, and an increase by the report made in 1871, how can both be true?-A. They can both be true because they were made from different data; and while I do not undertake to say that the entire difference will be found in the uncovered amounts, I presume that nearly or quite all of it will be found to be items of receipts from loans that had been deposited in the Treasury and had not been covered into the Treasury by covering warrants; and, if an item is not covered into the Treasury by covering warrants as of date during the quarter or fiscal year, the cash receipts by Receipts and Expenditures would not show it.

Q. That report was made on the 6th of December, 1869 ?—A. Yes, sir. Q. The fiscal year ends in June?-A. On the 30th of June of the same year, five months prior.

Q. Was not that time enough to collect and include any warrant that might have been out?-A. Yes, sir; sixty days is time enough to have all the moneys deposited covered in.

Q. There is for that one year an actual difference between the 1869 report and the 1871 report, as changed by yourself, of nine million dollars in round numbers ?-A. There is an actual difference of nine millions and more.

Q. And the statement made in 1871 by yourself increases the amount of the public debt nine millions?-A. Yes, sir.

Q. Can they both be correct when one is nine millions in round numbers more than the other?-A. Yes, sir; they can both be correct.

Q. Then do I understand that two statements can be made from the books, differing nine million dollars as to the gross amount of the public debt at the same date and for the same time, and both be right?-A. You put in a point there that changes entirely the character of the question. They can both be right when looked at and compared with reference to their origin. They do not relate to the same period of time as between two dates. The issues of loans are based on certificates of deposit given by the depository, assistant treasurer, or whoever may have received the money; but the person who deposits on account of the loan, as soon as he receives his certificate presents it to the Secretary of the Treasury and gets his bonds. Now, in the course of business that money is deposited immediately in the Treasury; before he gets his certificate it is deposited, and it is reported in the Treasurer's transcript of moneys received during that quarter; but the rule of the department always was never to cover an amount into the Treasury formally until the duplicate certificate had been received, so that there could be no error in the receipt accounts. Frequently the duplicate certificate did not come in for months afterwards, and it never was covered until that duplicate certificate came in. As a result of that, Congress passed an act to enable the Treasurer to settle his accounts, the act of 1866, by which they provided for an outstanding liabilities account, to