This case has been pending since 17th June, 1864, when the Messrs.
Smith Brothers, who, as merchants, enjoyed an enviable reputation, were
suddenly arrested by military authority, and, without any opportunity
of conferring with counsel or friends, were hurried off to Fort
Warren. During all this period, running over nine months, I have kept
myself aloof from the case, so far as possible, knowing that I was
not so circumstanced as to consider it on its merits, and under the
conviction, that, at last, justice would be done.
On certain matters independent of the merits I have with others been
called to speak. One of these was the manner of the arrest and the
bail required. At the time of the arrest, all the books and papers of
the parties were seized and sequestered. The hardship of the arrest
was aggravated by the bail required, which was fixed at half a million
of dollars. “Excessive bail” is forbidden by the Constitution; but it
would be difficult to say what bail could be “excessive,” if this was
not.
The other matter on which I was called to speak was the order for the
trial of the Messrs. Smith Brothers by court-martial at Philadelphia,
when it was notorious that the proceedings must be protracted, and that
numerous witnesses must be summoned from Boston, at great expense:
the whole constituting a plain oppression, not unlike the demand of
“excessive bail.”
The hardship in these preliminary proceedings seemed to justify an
appeal to the President, in which I joined, for his intervention at
least to change the place of trial. Perhaps they illustrate also the
temper which entered into this prosecution.
It is only since the President has put into my hands the report on
the findings of the Court, adopted by the Secretary of the Navy, that
I have looked into the case on its merits. I have read that report
carefully, and also the arguments of the counsel on both sides; but
I have not had any opportunity to examine the whole record. From the
fulness of the report, and of the arguments, this was hardly necessary.
The record is extensively cited in the report and the arguments, and
also in a pamphlet by one of the respondents, which I have read.
The more I have examined the case, the more I have been surprised
by the preliminary proceedings, the continued prosecution, and the
findings of the Court. I can well understand how they were used in the
House of Representatives as an argument for the total repeal of the
Act of Congress authorizing the trial of civilians by courts-martial.
Such a case must make us fear, that, under this Act, justice may be
sacrificed. It might make honest merchants hesitate to enter into
business relations with the Government.
On careful examination, it seems that the whole prosecution, so
far as proof is seriously pretended, is reduced to one single
specification,--to wit, the sale and delivery of five thousand pounds
of a tin called Revely, instead of a tin called Banca, by which,
at most, the Government lost one hundred dollars. There are other
specifications; but the report adopted by the Secretary of the Navy
forbears to dwell on them; and I do not think they can be made the
foundation of any judgment against the respondents. They did not seem
to have impressed the President, in the conversation which I had with
him on the subject. I put them aside as unproved or irrelevant. There
only remains the single specification with regard to tin.
Look at this carefully, and the wonder increases that these proceedings
were ever instituted.
1. The first remark to make is, that, even according to the finding
of the Court, the Government has suffered only to the amount of one
hundred dollars,--being the difference in price between the two
kinds of tin at the date of delivery. _The pettiness of this loss_
is still more apparent, when it is considered that the transactions
of the respondents with the Government reached the sum of more than
twelve hundred thousand dollars, having such infinite details that
they covered twelve hundred and five pages of sales. Surely, on
every principle of reason or evidence, the insignificance of this
loss, in transactions on so large a scale, and extending over three
years of time, constitutes an unanswerable presumption in favor of
the respondents, excluding, as it does, any adequate motive for the
perpetration of fraud. Even assuming that the supply of tin was
questionable, it would be reasonable to call it ill-considered, hasty,
or mistaken, rather than criminal, according to the finding of the
Court. Certainly it could be no justification of the vindictive arrest
and bail with which the proceedings began, and it is frightful that it
should be made the pretence for a sentence of two year’ imprisonment
and twenty thousand dollar’ fine. If a mountain in labor ever brought
forth a mouse, it is this mountainous prosecution, whose only offspring
yet crawling on earth is an allegation of loss to the United States of
one hundred dollars! But, if we look further at this transaction, it
will be seen that it is absolutely unimpeachable.
2. Much confusion has been caused by _ignorance with regard to the two
tins in question_. The report adopted by the Secretary of the Navy
says of them, that, “in the course of commerce, _the two are never
confounded by dealers_”; then, again, that “Banca tin is _one article_,
having a certain price, and that Revely tin is _another and a different
article_, having a different price.” The repetition of this assumption
again and again shows how important it was regarded in support of the
accusation. But this assumption is founded on mistake.
I call attention to the letter of Hon. S. Hooper, addressed to myself,
under date of 14th March instant, in which he testifies from his
experience as an importer, for many years, of these two tins. He
says: “If the only charge against Messrs. Smith Brothers & Co. is the
delivery of Revely tin, on a contract to supply the Government with
Banca tin, it is an absurdity, and it is evident to me that the Court
did not know what Banca tin was.” He then proceeds to say, that the
tin of the East passes under the _general name_ of Banca tin, which is
applicable to the Revely or Straits tin as well as to the Dutch; and he
adduces the authority of the Commercial Dictionaries. Thus, McCulloch,
under the word “Tin,” after speaking of the tin of Great Britain, says,
“Tin, Oriental, in commercial language usually called Banca tin,”
produced, according to this authority, in China, the Malay countries,
and the islands lying toward Java. He also cites Simmonds’s “Dictionary
of Trade,” published in London as late as 1858, which, under the term
“Banca-Tin,” says, “A valuable kind of tin, equal to English refined,
obtained in the Eastern Archipelago, originally from the island of
Banca exclusively; but much is now procured in Malacca, and sent to
Singapore for shipment.” The latter, it will be borne in mind, is what
has been treated in this case as Revely.
Certainly, the testimony of Mr. Hooper, in concurrence with the
Commercial Dictionaries, must tend to show that the report is mistaken,
when it so confidently asserts, that, “in the course of commerce, the
two tins are never confounded by dealers.” On the contrary, they have
been treated by “dealers,” and by authoritative writers on commerce,
as substantially the same. It is almost superfluous for me to add,
that, according to the ruling of our courts, such testimony would
be decisive. Thus, where certain words were used in the tariff, Mr.
Justice Story decided, that, “the tariff being a statute regulating
commerce, the terms of it must be construed _according to commercial
usage and understanding_.”[184] Common sense is in harmony with this
judgment.
As if to put this _commercial usage_ beyond question, we have the
testimony of Mr. Richards, a witness _for the prosecution_, as follows.
“_Cross-Question 18._ Do you ever have orders from customers
for Banca tin, that you execute by the delivery of Revely or
Straits?--_Ans. We have._”
“_Cross-Question 22._ Suppose you had an order from a
foundry--say Hooper & Co.--for five thousand pounds of Banca
tin, which you knew was to be used for castings, how would you
fill such an order?--_Ans. We should not hesitate to give him
Revely._”
“_Re-Cross-Question 1._ Would you not deliver to a party five
thousand pounds of Revely tin, upon a contract for Banca tin,
if you had never known them to buy such a quantity of any kind
but Revely or Straits, if you had repeatedly sold them Revely
or Straits acceptably, and you considered the tin was to be
used for castings?--_Ans. I should._”
3. The _usage at the Navy Yard_ was in harmony with commercial
usage, as the testimony abundantly shows. For _at least seven years_
previous to the contract of the respondents, the tin known as Revely
had been received at the yard as Banca. Edward Cody, witness for the
prosecution, and the master founder, on cross-examination, puts this
beyond question.
“_Cross-Question 4._ During these seven years [past], has not
the Revely tin been the standard article in use in your bureau
or foundry?--_Ans. It has._”
“_Cross-Question 11._ If you had been inquired of by them
[Smith Brothers & Co.] what kind of tin you required, what
would have been your reply?--_Ans. I should have had the same
as I have had._
“_Cross-Question 12._ What is that?--_Ans. Revely._”
Another witness, the Hon. Eugene L. Norton, the Navy Agent at Boston,
testifies, that, having occasion to buy tin on a requisition from the
Ordnance Office, he sent to inquire of Captain Green, the Ordnance
Officer, what brand was required. The answer was, “that, in all cases
where it was foundry work, Revely or Straits would be the kind that
would be received; that, in those cases where it was wanted in small
quantities, for solder, Banca would be preferred, as Revely or Straits
was somewhat cheaper than Banca.” And he added, that the quantity named
in the requisition, as a ton, or a pig, would indicate the kind he
should buy. Add to the testimony of these two witnesses the undisputed
fact, that, when, in May, 1863, C. W. Schofield, being under contract
to deliver five thousand pounds of Banca, failed to perform his
contract, the Government, although entitled to purchase the desired
article in open market at his expense, _bought Revely_. Here was a
practical interpretation of the contract, which establishes the usage
of the Navy Yard.
4. The _openness of the transaction_ and of the delivery testify also
to the _usage_. The tin, when delivered, was stamped upon its face
“Revely & Co.” This stamp, which was open to the observation of all
officers, workmen, and passers-by, is an incontrovertible witness,
which no argument of counsel or ingenious commentary can neutralize.
Calmly, but unanswerably, it shows two things: first, the usage at the
Navy Yard; and, secondly, the good faith of the transaction. But I
refer to it now simply to illustrate the usage.
5. Then comes _the acceptance of the tin_ marked as Revely, and the
approval of the bills by the officers of the Government, in performance
of the contract. It is not denied that the tin was accepted by Mr.
Merriam, the master machinist at the Navy Yard, and that the bills were
approved by Mr. Kimball, the inspecting officer of Government,--an
inspector who is said to have been unfriendly to the respondents. This
double fact is beyond question. An attempt is made to throw doubt on
the integrity of one of these witnesses, by charging complicity; but
it does not appear that there is a scrap of evidence in the record
to sustain the imputation, and I need not say it is outrageous to
imagine it, in order to increase the pressure upon the respondents.
Mr. Merriam, in his testimony, says: “I was influenced, undoubtedly,
_from my knowledge of the practice which had existed heretofore_, and
also from my belief that the article answered every purpose in the
department which Banca tin was required for. _The previous practice
of the department_, of which I had been informed, in addition to my
own judgment _as to the substantial equality of the articles_, were
reasons for my approving the bill.” Nothing could be more explicit or
reasonable.
The report adopted by the Secretary of the Navy seeks to parry the
force of this approval by the allegation, that “there is not a particle
of proof on the record that any one of the officers or other persons
employed at the Navy Yard, or in the transaction of its business,
had ever received from the Government any sort of authority to make
such inspection, approval, and payment as appears in the case.” The
report forgets _the usage of seven years_ at the Navy Yard, and _the
commercial usage_ besides, which were ample to justify them.
6. As it is evident that the Government did not expect to receive other
than Revely, so it is proved that _the respondents never expected to
supply other than Revely_, unless in cases of small quantities, where,
as we have seen, the Banca was supposed to be desired. Such is the
testimony of Benjamin G. Smith, one of the respondents, and also of Mr.
Dunnells, their clerk. The latter states, that his instructions from
the respondents were to deliver Banca when small lots were required,
but Revely when large lots of one thousand pounds and upwards were
required, and that, as far as his knowledge went, this had always been
done. Therefore the contract was performed according to _the mutual
understanding of the two parties_.
7. _The price_, according to the contract, shows that the tin called
Revely was intended. This can be demonstrated.
At the date of the contract, 30th March, 1863, the price of Banca in
the market was fifty-seven to fifty-eight cents a pound. Revely was
less. The price stipulated in the contract was fifty-seven cents.
But it is plain that the respondents could not undertake to supply
an article at less than its market price. This would be absurd. Of
course, as merchants, they expected a profit. Therefore, in their bid,
they would naturally take into consideration the various elements
which would enter into the final price. These would be, first, the
original price; secondly, the commission; thirdly, the condition of
the currency, which at that time had begun to depreciate; fourthly,
the variation of the market for a month; fifthly, store expenses and
interest; sixthly, postponement of payment; and, seventhly, risks of a
contractor in placing himself within the unhesitating grasp of military
power. So far as these can be estimated, they are as follows:--
Original price .52
Store expenses and interest at 5 per cent .0260
-----
.5460
Commission at 5 per cent .0273
-----
.5733
But the price was fifty-seven cents.
Now can any person, not to say any merchant, assert that fifty-seven
cents a pound was a high price for the tin called Revely? Would anybody
but a fool offer to supply the tin which in this prosecution is called
Banca at fifty-seven cents a pound, when its original price was more
than this, and the contractor must lose store expenses and interest,
with the risks of currency, market, postponement of payment, and
military tribunals, without the possibility of a mill for commissions?
Clearly not. It is evident, therefore, that, in offering to supply
Banca tin at fifty-seven cents a pound, they must have intended that
species of Banca tin known as Revely, which, according to the usage of
the Navy Yard and of merchants, had been recognized as Banca tin.
On this point we have the testimony of Mr. Richards, a witness for
the Government, whose cross-examination thus confirms the foregoing
conclusion.
“_Cross-Question 37._ What would it be worth to give a party
the refusal for, say, five thousand pounds of tin for twenty or
thirty days?--_Ans. At least fifteen per cent._”
“_Cross-Question 44._ During the year 1863, how much, in
addition to the cash market price, would you have considered
should be added for a refusal of thirty days?--_Ans. From, ten
to fifteen per cent._
“_Cross-Question 45._ Tin being sold to us at fifty and
three-fourths cents net cash in the market, would fifty-seven
cents be an improper sum for us to charge the Government on a
time refusal?--_Ans. I should think not._
“_Cross-Question 46._ If you were to be subject to a delay of
vouchers for merchandise delivered for thirty days, if there
should be a reservation of twenty per cent until the contract
was closed, and if then you were liable to be compelled to
receive certificates of indebtedness that would not sell in
the market at par, what, in addition to the cash market price,
would you consider should be added?--_Ans. From five to ten per
cent, I should think._”
“_Cross-Question 50._ Upon a Government contract, to run three
months or one year, with a reservation of twenty per cent, a
bid being made which amounts to a refusal for twenty or thirty
days, and subject to terms of Government payment, what would
you consider a fair addition to the cash market price on a sale
to the Government?--_Ans. At least ten per cent._”
“_Cross-Question 52._ Among Boston merchants what is the
character of the house of Smith Brothers & Co. for integrity
and fair dealing?--_Ans. A No. 1._”
Such is the testimony of a Government witness. In the face of this
testimony, concurring with the reason of the case, it is hard to
tolerate the allegation against these respondents founded on price.
Indeed, it is hard to tolerate the allegation on any ground.
Under these seven heads, this whole case, so far as concerns the
contract for tin, may be considered. It appears that the loss to the
United States, from the delivery of Revely instead of what is called
Banca, was not more than one hundred dollars in a mass of transactions
amounting to more than one million two hundred thousand dollars; that,
according to extensive and long-continued usage, Revely is included
under Banca; that, according to usage at the Navy Yard, it was treated
as Banca; that the whole transaction and the delivery were open and
without any concealment; that Revely was actually accepted by the
officers of the Government in performance of the contract; that the
respondents never expected to supply other than Revely; and, lastly,
that the price paid shows that Revely was intended. This is enough. I
forbear to go into the evidence of founders and plumbers, derived from
experience, of assayers and chemists, derived from analysis of the two
tins, and also of business men, as to their comparative value,--for all
this is superfluous. To charge fraud against the respondents under such
circumstances is cruel, irrational, preposterous. Their conduct cannot
be tortured or twisted into fraud. As well undertake to spin sunbeams
into cables, or extract oil from Massachusetts granite.
It is difficult to imagine the origin of these unfortunate proceedings,
which, beginning in unheard-of harshness, threaten to end in unexampled
injustice, unless arrested by the President. But there are certain
facts which may shed light upon some of the hidden springs. Nobody
supposes that the able and candid Head of the Navy Department became
acquainted with this prosecution until after it had been already
conceived, shaped, and set in motion. Others in the Department used its
great powers, if not for purposes of oppression, at least recklessly
and unaccountably.
It appears that Franklin W. Smith, one of the respondents, published
a pamphlet, in which he exposed abuses in the contract system of the
Navy Department; and it is understood that sundry officials felt
aggrieved by these disclosures. The spirit of these officials appears
sufficiently in the following extract from a letter of a Government
witness, holding an important position in the Navy Department,
addressed to another witness, himself also an official.
“I have been summoned before the Select Committee of the
Senate for investigating frauds in Naval Supplies; and _if the
wool don’t fly, it won’t be my fault_. Norton, the Navy Agent,
has complained that I have interfered with his business: he and
his friend Smith are _dead cocks in the pit. We have got a sure
thing on them in the tin business._ They that dance must pay
the fiddler.”
The writer of this letter, after appearing before the Senate Committee
at a later day, came on from Washington to appear before the
court-martial at Charlestown as a witness against the respondents,
where he underwent a cross-examination on which I forbear to comment.
If the prosecution did not originate in the spirit which fills his
letter, it is evident that this spirit entered into it. “If the wool
don’t fly, it won’t be my fault”; “Dead cocks in the pit”; “A sure
thing on them in the tin business”: such are the countersigns adopted
by the agent of this dark proceeding, showing clearly two things:
first, the foregone conclusion, that these respondents were to be
sacrificed; and, secondly, that the case turned on “the tin business.”
It is hard that citizens enjoying a good name, who had the misfortune
to come into business relations with the Government, should be exposed
to such a spirit; that they should be dragged from their homes, and
hurried to a military prison; that, though civilians, they should
be treated as military offenders; that they should be compelled to
undergo a protracted trial by court-martial, damaging their good name,
destroying their peace, breaking up their business, and subjecting
them to untold expense,--when, at the slightest touch, the whole case
vanishes into thin air, leaving behind nothing but the incomprehensible
spirit in which it had its origin.
Of course, the findings and sentence of the Court ought, without
delay, to be set aside. But this is only the beginning of justice. Some
positive reparation should be made to citizens who have been so deeply
injured.