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3d Session.

IN THE SENATE OF THE UNITED STATES.

DECEMBER 18, 1878.-Ordered to be printed.

No. 565.

Mr. HEREFORD, from the Committee on Claims, submitted the following

REPORT:

[To accompany bill S. 1287.]

The Committee on Claims, to whom was referred the bill (S. 1287) for the relief of Burr S. Craft, report as follows:

That on November 14, 1866, a gold certificate for $5,000 was issued by the assistant treasurer of the United States at the city of New York, payable to the order of E. H. Birdsall. In reply to a letter addressed to the Secretary of the Treasury on the subject, he says:

At that time Birdsall was a clerk in the office of the assistant treasurer at New York, to whom the certificates were really made payable before issue, and whose duty it was to indorse each certificate in blank before paying it over the counter.

It was then and still is customary for holders of these certificates to render them payable to order by placing an indorsement over the clerk's name, and it is not unlikely that the certificate in question, which is still outstanding and unpaid, was in that manner made payable to the order of Burr S. Craft.

Said Craft, on March 7, 1867, had this and seven other certificates, and deposited them for safe-keeping with the assistant treasurer at the city of New York, as shown by testimony of Henry C. Smith, teller in the City National Bank of Poughkeepsie.

That afterward, viz, March 29, 1869, this certificate and eleven others of like amount were in the possession of said Craft, and by him on said day withdrawn from the Chemical National Bank of New York, as shown by the testimony of George G. Williams, cashier of said bank.

On the 9th day of January, 1869, said certificates were in the possession of said Craft. On the 18th day of December, 1873, said certificate No. 25378 and two others were stolen from said Craft. Said certificate had been made payable to order of said Craft in the manner set out in the letter of the Secretary of the Treasury before referred to. Your committee further report that said certificate is still unpaid and has not been presented for payment; that the other two which were stolen from said Craft have been by him recovered and paid, and that said certificate No. 25378 is the only one unpaid.

Your committee recommend the passage of the bill as amended, viz, in line 18 after the word "to," insert the word "double," so as to make the bond double the amount of the missing certificate.

3d Session.

IN THE SENATE OF THE UNITED STATES.

DECEMBER 19, 1878.-Ordered to be printed.

No. 566.

Mr. ANTHONY, from the Committee on Naval Affairs, submitted the following

REPORT:

[To accompany bill S. 1543.]

The Committee on Naval Affairs, to whom was referred the petition of John S. Cunningham, a pay-director in the Navy, having considered the same, make the following report:

The memorialist is a pay-director in the Navy. He has been many years in the service, and has disbursed many millions of dollars, and his accounts, as appears by the certificates of the accounting officers of the Treasury, have been kept with remarkable clearness and accuracy, and have been rendered with unvarying promptness, having been always settled promptly to a cent.

He was stationed at the Navy pay-office, San Francisco, Cal., where he made it a rule not to permit any money to be drawn from the Treasury for the use of his office, but paid every bill, however small in amount, by check on the subtreasury. He had invented a system of recording a history of bills and payments in a book, which is highly commended by the Fourth Auditor as a security against fraud. He was accustomed to draw his checks payable to order, but the assistant treasurer at San Francisco refused payment of them, and required him to make them payable to bearer. In accordance with this requirement he drew three checks, one for $720, to pay a bill of the California Cracker Company; one for $361.72, to pay a bill of Whittier, Fuller & Co.; and one for $202.47, to pay a bill of James E. Jordan; in all, $1,284.19, which were intrusted to Franklin Philp, his clerk, a sworn officer, approved by the Navy Department, and who embezzled them and applied the proceeds to his own use. Immediately on discovering the embezzlement Captain Cunningham deposited of his own funds the amount of the checks in the United States Treasury, and obtained therefor transfer drafts on San Francisco, which he at once forwarded to the parties for whom the embezzled checks were intended. The clerk absconded, and is wholly irresponsible.

Whatever are the objections to indemnifying disbursing-officers for losses inflicted upon them by their subordinates, they can hardly apply when the loss is occasioned by a compulsory mode of drawing the checks against which the officer protested, and when, if he had been permitted to draw them in the mode which he attempted for the greater security of the government, the loss would not have occurred. It appears that the loss was caused by no fault or neglect of the memorialist, but by the requirement of the Treasury officers that the check should be made payable to bearer.

The committee recommend the passage of the accompanying bill.

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