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The North-Carolinian. [volume] (Fayetteville [N.C.]) 1839-1861, March 23, 1839, Image 1

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Tkrms $2 50 per annum, if paid in advance; S3
if paid at the end of six months; or $3 50 at
the expiration of the year. Advertisements in
serted at the rate of sixty cents per square for the
first, and thirty cents for each subsequent inser-
t3 Letters on business connected with this
establishment, must be addressed I. L. Holmes,
Editor of the North-Carolinian, and in all cases
COMMITTEE of the House of Repre
sentatives, appointed on the 11th January,
1839, to inquire into the causes and extent
of the late defalcations of the custom-house
at New-York and other places.
Congress of the United States.
In the House of Representatives,
January 17, 1S39. J
"Resolved, That the communication from
the President of the United States, of the Sth
of December, 183S, relating to the defalcation
of the late collector of the port of New-York,
except so much as relates to the modification
of the revenue laws, be referred to a Select
Committee of nine members, to be appointed
by the House, by ballot, whose duty it shall
be to inquire into the causes and extent of the
late defalcations of the custom-house at New
York and other places, the length of time they
have existed, the correctness of the returns
which have been made by the collectors, naval
and other officers, and the deposite banks, re
spectively, and all such facts connected with
said defalcations as may bo deemed material
to develope their true character.
"Be it further resolved, That said com
mittee be required to inquire into, and make
report of any defalcation among the collectors,
receivers, and disbursers of the public money,
which may now exist; who are the defaulters;
the amount of defalcations; the length of time
thev have existed, and the causes which led
to them; and that said committee have power
to send for persons and papers."
The minority of the committee, appointed un
der the above resolutions of the House of
Representatives, beg leave to report,
That the committee entered on the duties
assigned them soon after the passage of the
resolutions. At their first meeting and organi
zation in the City of Washington, a resolution
was offered in these words:
"Resolved, That the President of the Unit
ed States be requested to cause this committee
to be furnished by the proper Executive De
partments, with a table showing the defalca
tions which have occurred among the collec
tors, receivers and disbursers of public money,
and other public officers, since the 4th day of
March, 1829; the names of the defaulters;
the amount of each defalcation; when each
case occurred: the length of time each case
has existed; what steps have been taken by
the proper departments or officers to prosecute
the defaulters, and to secure the United States
in each case, and what defaulters are retained
in the same offices in which they became de
faulters, or have been appointed to other of
fices." " '
Which, in the opinion of two of the under
signed, the thiid not being then present, was
unauthorized by the terms of the spirit of the
resolutions of the House, whic h are confined
to the lale defalcations, and could not be con
strued to include defalcations as far back as
the 4th of March, 1S29, which had been here
tofore reported to Congress by the Secretary
of the Treasury, a;.d no action had thrreon
by the House.
Under this view of die subject, and believ
ing it to be the first step to give a laliiudina
rian construction to the powers delegated, and
which opinion was confirmed by subsequent
events, oue of the undersigned deemed it a
duty he owed to the House, to offer an amend
ment in these words : "To strike out the
words 'defalcations which have occurred a
mong the collectors, receivers, and disbursers
of public money, and other public officers,
since the 4th day of March, 1S29,' and insert
the words, 'the late defalcations prior to 1S3S,
and not heretofore reported by the departments
to Congress and the country.' "
The amendment was rejected, and the ori
ginial resolution adopted.
The committee being impressed with the
belief that the great object of the House in
raising the committee, was to investigate the
causes aud extent of the defalcations at the
custom-house at New York, deemed it proper
to adjourn to that city where the defalcations
had arisen, the' witnesses, or actors in the
same resided, and the documentary evidence
was to be found. In pursuance of this deter
mination, the committee assembled on the 24th
of January, in the city of New York, and,
without loss of time, engaged in the arduous
duties of the investigation. At the suggestion
of one of the members, whether the committee
were to carry on their investigation open to
the public at large, it appeared to be tacitly
agreed that such a course was calculated to
embarrass the committee, as they had no pow
er to suppress disorder in case any should
arise; but no intimation was given that the
proceedings of the committee should be a se
cret. In the mean time paragraphs appeared
in the newspapers of New York, statiug that
the committee sat with closed doors. It was
evident, also, from the wide and extended
range of the investigation, that many persons
were likely to be implicated, both officers of
the Government and private citizens. The
undersigned believed that the committee,
though a select committee, was not a secret
committee; that the House, when it passed
the resolutions, never intended the proceed
ings of the committee to be kept secret; that
justice required that prompt and early notice
should be given all persons accused ; and the
charge should be made in a public manner,
the accused confronted with the accuser, and
that secret inquiries were unknown to the
constitution, aud alien to the practice and
feelings of the American people. The mino
rity of the committee entertaining these sen
timents, and not knowing the views of the
majority upon this interesting subject of se
crecy, and finding, though other persons were
excluded, two or three witueeses at one and
the same time were admitted into the com
mittee room, thereby subjecting the proceed
ings of the committee to misrepresentation,
and the action of individual members in ssi is.
pic ion and calumny, deemed it proper to bring I
"Character is as important to States, as it is to individual..; mill tlie glory of the State, is the common property or its citixetis.
Vol. I.
the subject before the committee in a substan
tive form, aud to call for a distinct expression
of opinion, by proposing the following resolu
tion :
"Whereas all proceedings of an inquisitori
al character, and conducted in secret, are at
variance with the principles of Republican
Government, and abhorrent to the feelings of
the American people:
"And as justice demands that all persons,
whether they be officers of the Government or
private citizens, who, in the course of this in
vestigation, may be implicated or charged with
official misconduct, or being concerned in
aiding or abetting such misconduct, should
have immediate and jyrompl notice oj the
charge, so that if innocent they may repel it;
and that, whatever may be the nature of the
charge, it is but reasonable and just that the
same be publicly brought forward aud publicly
"And as the members of the committee
have no reason or desire to disguise or con
ceal from the public view all or any of its act
ings and doings in the exercise of the deli
cate and responsible commission imposed on
them; to the intent, therefore, of having no
misunderstanding on this subject,
"Be it resolved, That it is' the opinion of
this committee that, though a select commit
tee, appointed by the House of Repscscnta
tives of the United is not a secret committee;
that though invested with the power of inqui
ry, as contained in the resolutions of the
House, that power ought to be exercised in an
open and public manner; and should be not
only free from auy direct charge of conceal
ment, but from the ren.Giest suspicion of it.
"And be it further resolved, That ail ui
proceedings of this committee shall be open
aud public, as being the mode, in the opinion
of this committee, best calculated to attaiu the
ends of justice, to satisfy the just expectations
of the people, and to protect the rights and
privileges of American citizens."
Which, after an amendment offered, were
all finally laid on the table, to the astonishment
and mortification of the undersigned, and no
doubt to the surprise of the people of the U.
States. Under these extraordinary circum
stances:, the proceedings of the committee be
ing secret or public, according to the judg
ment, discretion, or caprices of witnesses or
members of the committee, the investigation
was carried on. Numerous witnesses were
examined as to the extent of the defalcation.
The undersigned will not go into a detail
ed statement of the heads or items, such as
forfeitures, penalties, bonds, &c, upon which
Swart wout based his speculations, but refer
the House to the journal of the committee.
They will simply remark that the bond itm
gave the facility and laid the foundation of the
principal part of the defalcation. These pe
culations commenced at an early period of
Swaitwoufs official life, and went on increas
ed aud increasing until its close. The art and
management with which they were concealed
will attract attention. One occurrence re
ferred to in the testimony is not the least re
markable in this extraordinary affair. When
Swartwout, in 1834, was re-nominated by the
then President of the United Slates, the no
mination was referred, as usual, by the Senate,
to a committee, which committee was com
posed of a majority opposed to the then Ad
ministration. In the investigation of Swart
woufs accounts before that committee, sus
picion arose that he was in default. Mr.
Shultz, the then auditor of the custom-house,
a witness examined by this committee, was
called upon by the committee of the Senate to
aid them in the examination, and to give them
information in regard to Swartwout' s accounts;
and after, it is presumed, a thorough investi
gation, the committee reported favorably to the
Senate, and the appointment was confirmed
by the then existing Senate, composed of a
majority of Senators opposed to the Adminis
tration, though there was at this time a defal
cation to a considerable amount, known to
Mr. Shultz, but not communicated to the com
mittee of the Senate, as will be seen by re
ference to the following questions and an
swers: "Question 26. Did you know, when you
were before the committee of the Senate, in
1834, that Mr. Swartwout had not paid over
to the cashier the sum of more than 3U,000
dollars, received by him for forfeitures?
"Answer. I knew that Mr. Swartwout had
at that time more than 30,0U0 dollars for for
feitures, which he had not paid over to the
"Question 27. Did you inform the com
mittee of the Senate, or any officer of the
Treasury Department, that Mr. Swartwout had
not paid over the money received by him for
forfeitures? And, if not, why?
"Answer. I did not; because I did not
think it my duly.
Question 33. Why did you not regard it
as your duty to inform the Secretary of the
Treasury, or the committee of the Senate, that
Mr. Swartwout had not paid over the money
received from the marshal for forfeitures?
"Answer. Because we clerks of the custom
house consider ourselves as in the service of
the Collector, and not in the service oj the U.
Stales. The collection law does not seem to
regard the clerks of the collector as in the ser
vice of the United States, as the markers and
weighers, &c. who are appointed by the Trea
sury Department We have always thought
ourselves the private assistants of the collec
tor. It was my duty to render the accounts
iruly, and credit the United States truly, as
I did; but not to inquire into the private trans
actions of the collector."
These answers afford a valuable instance
of custom house morality and patriotism.
That the defalcations should have been so
long concealed from the Department and the
public, though at first a matter of surprise, will
create no great astonishment when Mr.
Shultz's testimony is considered.
The manner of keeping the accounts in the
custom house was calculated to effect the ob
ject of concealment. The auditor of the cus-
No. 4.
torn house, and the naval officer, intended as
checks upon the collector, were kept in total
ignorance as to the true state of the accounts;
and, as the Treasury Department depended
on their statements, it was equally ignorant.
Two of the witnesses, Ogden and Phillips,
cashier and assistant cashier of the custom
house, say they frequently made no entry at
all in the cash book, of moneys abstracted by
Swartwout for his private expenses. hen
bonds were paid no credit was given for them.
The cash book being in the possession of
these individuals, they furnished such state
ments to the auditor as suited their purposes,
and concealed the accurate and true state of
the account. Some effort was made in the
course of the investigation tffcshow that Swiirt
wout always made to the Defrartmcutat Wash
ington true and accurate statements of the
aggregate amount of his accounts, and there
by drawing an iufercucc that, if they had been
carefully examined, the defalcations could
soon have been detected. The undersigned,
are of opinion such is not the fact, and that it.
was scarcely possible, under any circumstan
ces, to make the detection iu any other man
ner than by the personal inspection of the
bonds and the books of the custom house. On
this branch of the subject we beg leave to re
fer to the testimony of Mr. Woodbury and the
First Auditor at W ashington, as contained in
the journal. Mr. Fleming, the auditor at
that time, and now auditor of the custom house,
a very respectable aud intelligent witness,
testifies that he had suspicions in June, 1S37,
that there was a deficiency iu the bond account.
He communicated the suspicion to Mr. Phil
lips, the assistant cashier, who auswercd hi in
In a very laconic manner, "that credit was
given in the cash book for all the'oonds int
were paid; the rest were in suspense." He
also states, that though the accounts of Sw art
wout, transmitted to the department at Wash
ington, contained a true aud accurate state
ment of the aggregate amounts, there was a
deficiency and concealment of the true cosh
balance, as was afterwards discovered by the
examination of the cash book of the custom
house, in a sum exceeding 6ov,l.-00 dollars.
In this manner the fraud carried on was kept
secret. Mr. Fleming also states that, but for
the suspension of the payment of the bonds,
and specie payments by the banks, the frauds
could not have been carried on without ex
citing suspicion and loading to detection.
Great credit is undoubtedly due to the pre
sent collector and auditor of the customhouse
for making the discovery as early as it was
made. The urgency of the former to have his
accounts settled aud prepared for transmission
to Washington, iu a great degree produced
and hastened a developeinent. But for this
circumstance the combination and conspir-?v
existing in the custom house to defraud the
govern rae ut, would have bad the effect to con
ceal it a much longer lime. ,
It mav be confidently asserted that under the
existing laws, and, indeed, under any safe
guards that may be establish, d to protect the
public purse, without honor and integrity in
the public office, it may and w ill be plundered,
and the fact concealed for a considerable
time without the possibility of discovery.
The business of the custom house at New
York is so various and complicated, that un
der the provision of the act of Congress, the
collector is allowed three months alter the ex
piration of each quarter to make his returns.
Frequently from necessity this time has been
extended to four mouths. Two or three months
arc consumed in the Auditor's and Comptrol
lers offices at Washington, in auditing and
settling these accounts. Until this is done
the defalcations cannot be certainly known, so
that they may be concealed from five to seven
months, and that under the operation of the
By reference to the journal it will be seen
that there is some discrepancy in the testimo
ny on the subject of the extent of the loss.
Most of the witnesses agree that the amount
of defalcation corresponds with the statements
heretofore made by the officers of the Govern
ment who were sent to New York, at or im
mediately after the same was made known,
and whose reports have been submitted to the
The witness Mr. Shultz, before alluded to,
former auditor of the custom house, and who
for a long period of time filled that station, re
duces by his testimony, the amount in a con
siderable degree. The House has before seen
what reliance should be placed on the evidence
of Mr. Shultz. As additional evidence of the
confidence to be given him, the journal is re
ferred to where Mr. Shultz states: the weekly
returns made to the Secretary of the Treasury,
under the regulation of the department, in
cluded the items of forfeitures and penalties,
and which, in his opinion, would have enabled
the Secretary in fifteen minutes to have detect
ed the defalcation, so far as these items are
concerned, though testified to wifh great confi
dence, and with an apparent knowledge of the
act, is totally disapproved by the chief clerk of
the Treasury Department, and the documen
tary evidence derived from that department, to
wit: the weekly returns themselves. Mr. Shultz
is also a very aged man, infirm in body and
mind, and, like most old persons, better able
to give a clear and distinct account of trans
actions of long standing than recent occur
rences. But whatever may be the accurate amount?
the ostensible sum total, established by un
questionable testimony, is very large. The
actual or real amount however, lost to the Go
vernment, concerning which no information
can be obtained, it is impossible to say, and
can be only a subject of conjecture.
One fact brought forth by the investigation,
is of a remarkable character, and deserves a
notice. Mr. Thompson, the cashier of the
Bank of America, then one of the deposite
banks, states that checks of different amounts
some for very large sums, were indiscrimi
' nately drawn by Swartwout, or his deputies,
and paid by the bank. This practice, danger
ous at all times to the Government and the
collector, was peculiarly hazardous under the
administration of the late collector, whose bu
siness habits did not qualify him for a strict
scrutiny into the fiscal affairs of his office. By
it an opportunity was afforded and temptation
given, to peculation in the custom house.
The causes which combined to produce the
dcfalcat ion are various.
The first was the unfortunate appointment
by the President and confirmation by the Se
nate, for two successive terms, of a man like
Swartwout, who, from habits and pursuits, wps
totally disqualified to discharge the duties of
collector at New York; a port the most import
ant in the Union, and where one-half, if not
two-thirds, of the revenue of the Government
is collected.
The second, the disposition of Swartwout
to engage in large and hazardous speculations;
a passion the most lasting in its excitement,
and most disposed to increase by the food it
feeds on. And in an officer of the Govern
ment, intrusted with large sums of money, the
most dangerous in its operation upon him as
an individual, as well as the Government.
There is much testimony on this head. Some
of the witnesses,, best qualified to judge, the
brokers of New York, state iu technical lan
guage, he was a great operator iu stocks in
Wall street. Swarwout sometime winning,
at others losing, large sums of money. The
evidence as to loss or gain, is by no means
The third cause which contributed in some
degree, was the want of a regular and periodi
cal examination of the bond account in the
Auditor's office in W ashington. One of the
witnesses, aud a clerk in that bureau, says the
bend account, prior to the defalcation, had not
becu examined since 1S32. Before that time,
it toad been the practice in the office. Why it
was abandoned we know not, unless from an
opinion it was not necessary, or that there was
not a sufficient number of cler"k to discharge
the duty, at all times very onerous, there being,
at a moderate calculation, not less than thirty
thousand bonds taken a year in New York
alone. But whatever may have produced the
abandonment of the practice, it was calculated
to lead his successor in office into error.
That successor would naturally follow the prac
tice existing at the time in his bureau, as the
one adopted from experience, aud found to
answer the public exigencies. No blame can,
therefore, be attributed to the present First
Auditor, he having been, previous to these oc
currences, but a short time in office, aud of
course not well qualified to judge of the prac
tical utility in this particular branch of his du
ty. On this subject we beg leave to refer to
his testimony as contained in the journal.
The fourth cause, was the non-execution of
Swartwout's official bond for a great length of
time after his last appointment in 1S34. The
bond bears date in 1831, but remained in the
custom house unexecuted Until 1837 when it
was certified by the district attorney of New
York, Mr. Price, and die Comptroller at Wash
ington. For nearly three years, no bond of
the collector of INew York, the principal port
in the Union, was in the Comptroller's office,
and (he collector was left to carry on the great
fiscal operations of the custom house without
any security, except that based upon his own
responsibility. As to the sufficiency of the
security afforded the Government by the bond
when executed, that is a subject not suscepti
ble of positive proof until tested by legal deci
sion, and must remain a matter of speculation
and opinion..
Snonld the security in the bond be hereafter
found insufficient, it will be attributed to Price,
the district attorney of the city of New York,
where the sureties resided, aud who, before he
certified the bond, did make, or ought to have
made, the necessary inquiries as to their pe
cuniary responsibility.
The bond, though executed at so late a pe
riod, will protect the Government as far as the
amount extends, a urc portion of the defal
cation having taken place after its execution,
and therefore embraced by it.
It is true, little security will he afforded by
it to the Government, when the penal sum,
contained in the bond, is compared with the
large amount of the defalcation; and hac- a
regular account of the bonds been kept in the
Auditor's office, there is very strong aud con
clusive testimony to show it would have neith
er prevented nor detected the defalcation.
The bond of Swartwout not being executed
and deposited in the office, nor any entry of
his appointment as collector made by the
Comptroller of 1S34, was such a want of offi
cial diligence as no one ccild have supposed
or anticipated, and could not have excited any
suspicion iu the mind of his immediate suc
cessor, (not the present Comptroller, who came
into office after the discovery of these defal
cations,) so as to induce him to order an ex-
aminalion. He took it for granted the usual
course had been pursued in relation to Swart
wout's appointment and bond. The neglect
therefore, of the former Auditor and Comptrol
ler, in these particulars, is strange and unac
countable. The only excuse for it is to be found in the
fact, a short time anterior to these occurrences,
and long before, the heads of these bureaus
were two aged men, incapable, from physical
and mental infirmities, to discharge the duties
imposed on them with the diligence and strict
supervising attention that these important offi
ces demanded. The evidence on the journal
on this subject is very strong. The retention
of aged persons in office, who have grown old
in the service of the State, is an evil iucident
to all Governments, and more particularly to
our democratic one. To dismiss an officer
under such circumstances is a harsh measure,
and well calculated to shock the feelings and
enlist the sympathies of the people. To re
tain him when incapable of " performing his
functions is dangerous to the security of the
public treasure, and injurious to the best in
terests of the people. Better would it be to
let the civil officers of Government, who have
faithfully discharged their duty for many years,
ctire, at a certain designated period of life,
upon a pension, than to have them remain in
office but the shadows of themselves.- Upon
the principle of economy alone, so dear, to the
American people, the course suggested ivould
be highly advantageous to thd-cbuntryv :
The fifth cause was the irregular and loose
manner in Which ths whole business of the
custom house was Conducted, and which has
berfh adverted to before in this report, and
frcin the fact that the naval officer, who, under
the laws, was intended as a check upon the
collector, has not, in the execution of his
functions, supervised the accounts with that
care and diligence the importance of the sub
ject demanded.
The sixth cause is to be found in a practice
grown up of late years; the keeping by the col
lector what is termed a suspense account, un
der which head he retains large sums of mo
ney to meet protests and suits upon duties
over-paid, &c. and which, for his own securi
ty, he is in a great measure compelled to re
tain, the courts of justice having determined
in such cases that he is personally liable.
W hether these decisions are founded on true
and just principles and national policy, the
undersigned will not undertake to decide, but
they may be permitted to remark, the sooner
there is some legislative action on this sub
ject, the better for the country and the collec
tors. The seventh cause v.as the convulsion dnd
total derangement produced iu the business of
the custom house by the suspension of the pay
ment of bends by Government, and the sus
pension of fpecie payments by the banks.
The amount of bonds operated upon by these
causes arc contained in the answers of Mr.
Woodbury in these words:
"Question 37. What amount of bonds
were due or running to maturity a short time
before, at the the time, and during the
time of tlie convukioa jtrcduced by the
suspension of specie payments by the baris,
and coming under the instructions of the So
licitor of the Treasury in May. 1837.
"Answer. In reply, I would state that the.
amount of bonds falling due betvreen the first
of May and the first of October 1S37, in the
United States, was probably from fire to six
millions. I have not examined to see the e.
act amount. But of those some were put iu
suit, and neither paid nor postponed under the
instructions of the Solicitor in Mav, 1S37;
and others were paid without suit or postpone
ment; so that the amount postponed under
these instructions were estimated to bo not
far from four millions of dollars.
'Qestion. What amount of bonds came
under the provisions of the acts of Congress
of 1837; the one produced by the fire in New
York, aud the other produced by the suspen
sion of specie payments by the banks?
"Answer. Iu reply, I state that the post
ponements actually made under the two acts
in October, as to former bonds and mer
chandise on which cash duties had accrued,
are estimated to have been from four to four
and a half millions. The amount coming
w ithin the operation of relief asked and grant
ed on account of the fire, is supposed to have
been about $1,063,000."
As also to the following question
"Question 1 Please state, should a com
bination exist between the district attorney
and the collector to defraud the Government,
by placing bonds which have actually been
paid in his weekly account, transmitted to
your department under the head of bonds sus
pended or bonds in su it, if there are any means
in your power, as Secretary of die Treasury,
to make the detection, except by personal in
spection and examination of the bonds at N.
Mr. Woodbury answers in the negative find
gives his reasons in exlenso, as will be seen
by reference to the journal.
The suspension of specie payments by the
banks, so sudden and unexpected, at a period
of profound peace, and under the appearance
of great uational prosperity, was well calculat
ed not only to derange the business of the
custom house of New York, but did convulse
the whole trade of this country, and iu its con
sequences affected that of those States or
Kingdoms with -whom we had commercial
relations. A contingency so extraordinary
could not have been anticipated, and conse
quently diere were no existing laws to protect
the Government from its baneful effects
By rendering the acts of Congress in rela
tion to the safe-keeping of the public money
a dead letter, it made the banks cease to be
the depsitorics of the public money, took away
the authority of the department to receive their
paper in payment of public dues, and from ne
cessity threw the payment of the bonds into
the customhouse, and into the hands of Swart
wout and hisagenls, uncontrolled by any le
gislative provision, or any other safe-guard
that would otherwise have been provided to
protect the public purse.
It may be, and no doubt will be said, that
notwithstanding this act of the banks, if their
paper had been received by the Government,
aud the bonds still paid in the banks, the loss,
or a greater part of it, would not have been
sustained. The undersigned will not under
take to decide what would have been its ulti
mate effect.
The legality and propriety of such a mea
sure, as an act of the Government, is submit
ted to the good sense and intelligence of the
American people. The reason for the Secre
tary of the Treasury not adopting it, is to be
found in the acts of Congress, and the prac
tice of the Government founded thereon,
which prohibit the officers of the revenue re
ceiving in payment any thing but gold or sil-.
ver, or its equivalent. The Secretary of the
Treasury was not warranted, by law, to . re-.
ceive the paper of these banks. If be had
done so, he would have been liable to im
peachment; and, from the known temper of
the times, would, in all probability, have been
impeached. If authority to receive such pa
per had been given, it would have been not
only a violation of the laws of the land, but
disreputable to the officer and degrading to
me. country. It would have had a tendency
to give official countenance to this act of the
banks so unjust and highly injurious to the
interests of the people, aud calculated to fix a
stain on the national character. If an option
had been left him, he could not, as a public
officer and a patriotic man, have hesitated in
looking to, and beholding on this great emer
gency, to the individual responsibility of the
bondsmen, rather than receive the paper of
banks, which had taken the law into their own
hands, had legislated for themselves, aud them
selves alone, and had violated the obligations
of their charters, and the faith pledged to the
public. This cause', therefore, opened a field
for those engaged in the frauds and specula
tions by placing the money of the people in
the hands of Swartwotrf and his subordinates:
uncontrolled by law, and was seized upon to
carry on a most dariug system of robbery and
By reference to the testimony, it will be
seen the large defalcation occtirrcd on the
bondaccount.and in the first and second quar
ters of 1S37, a short time prior end subsequent
to the suspension of specie payments by the
banks. The bond account, however, had been
deranged, no doubt, in a very considerable
degree, before 1837, by the renewal of bonds,
under the acts of Congress, occasioned by the
fire inN. York, and the advantage taken of it.
The eighth cause, and one of the principal,
was a combination of unprincipled officer in
the custom house, to defraud the Government
and plunder the people. Without this combi
nation, Swartwout could not hate concealed
his frauds a dsy-"-certaialy not a week. That
men of former g60d character and standing
in society should have entered into the con
spiracy, aiding end abetting Swartwout in his
peculations of the public purse, is a subject
not only of deep mortification, but a national
It k a remarkable instance of the corrup
tion of the times in which we live. It becomes
still more remarkable from the fact, that one
of the men, (Phillips, the assistant cashier of
the custom house,) so aiding Swartwout in
his peculations, when examined as a witness,
and the question propounded to him by a mem
ber of the committee, "why, knowing as he
did, Swartwotit was defrauding the Govern
ment, he did not give information to the Trea
sury Department?" answered with great cool
i .--as end Composure, in conformity with the
curdom hovss practicet and the reason given
for ii by Mr. Shultz, "that he was the clerk
of Mr. Swarfcvcitt, and did not like to disclose
the secrets of his employer" Apparently con
sidering as a virtue his fidelity to a public
officer who, with the witnesses' co-operation
and active agency, was defrauding the people.
These deteloprnents, and the inferences -tura'ly
eifattn from them, must irresistibly leau
the House to the conclusion, that the safety of
the public money, imperiously demands that
no officer of the custom house, connected with
its fiscal concerns should be appointed by the
collector himelf; but should receive the ap
pointment from the Government, and give his
sole allegiance to the country.
Other causes, not known, may, and no
doubt did, contribute to produce the defalca
tions. The subject nretter, however, both in
relation fo the extent and the causes of the
defalcation, is still Involved in some uncer
tainty. The character of the testimony is
more than doubtful. Some of the witnesses,
aud those best acquainted with the facts, were
active agents, if not participators, in the
frauds: the fountain therefore, from which
we derive our information, or the greater por
tion of it, is impure and defiled. No reflec
ting man, acquainted with the operations of
the human heart, and the springs of human
action, will or can place much reliance in tes
timony thus characterised and stamped with
the impress of fraud and profligacy. Each
man and the House collectively will give ere
dence to it according to the degree of creduli
ty he or they may possess; and, at last, a great
deal must depend, like the mysteries of our
holy religion, upon the faith of the individual
searching for truth.
This disposition Swartwout made of these
enormous sums abstracted from the public
coffers is an enigma not easily solved. 1 Tie
evidence furnishes no clue to it. The incon
siderable sum left in the hands of Ogden, and
the value of the real estate indifferent parts of
the Union, form but a very inconsiderable
item on the credit side of the account; and
some of the witnesses say Swartwout is now
a needy man. That he should have been
possessed of so little property can only be ac
couutcd for on philosophical principles, and
the natural operation of the human mind.
Money thus acquired is not long retained.
It is soon dissipated in extravagancies that
leave no trace hehind him.
Much credit is due to Mr. Hoyt, the pres
ent collector of New York, and the Solicitor
of the Treasury, through whose instrumentali
ty the money in Offdeu'g hands, and the se
curity afforded by the real estate, were ob
tained. The money, as Ogden testifies, was intend
ed by Swartwonvfor other purposes and would
have been so applied, but for the sudden arri
val and nriYrwetfd and vionrnns nnnlirntinn
i -o ri
of the Solicitor of the Treasury to him, as
agent of Swartwout; to pay the same to the
United States.
During the progress of the investigation,
and before it had closed in relation to Swart
wout, a member of the committee submitted
the following resolution:
"Resolved, That Mr. Hoyt, the collector,
be required to furnish this committee with all
letters to and from the Treasury Department
and the collector of the customs at New
York; ami also all orders and instructions
from the Treasury Department to said collec
tor, since tne nrst day ot January, 1S37, up
to the present day; and the answers of said
collector, it any, to said orders and instruc-
turns, not already turmsned to tins com
mittee." ; - -
m..'- i rt i i ? a
Tn PAmmnlM t ttio otithAritv rnntai nml in tho
.n - o . . a s
sirnu ui iiiiiiiii v- iirin auiiLiuaicu si v 1 1
House or the country. One of the under
signed, therefore, moved the following amend
"Provided, The said letters, orders, and
instructions have reference to the late defal-

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