Full text of Charles S. Hamlin Papers : Writings -- "Memoranda Concerning the Federal Reserve Board...," Diary Vol. 2, 15 Mar. 1913-15 Jan. 1915 (pp. 1-37) (1 of 19), Box 356, Folder 15

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,

The Papers of Charles Hamlin (mss24661)
356 15 001-




Hamlin, Charles S., Miscellany, Writings,"Memoranda Concerning The
Federal Research Board...," Diary Vol. 2, 15 Mar. 1913 — 15 Jan. 1915 (PP.
1-37(1 of 19)

r

CHARLES HAMLIN
PAPERS
Folder
Box j5-‘




Miscellany

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Mr. Hamlin said he took oath on Aug. 10(6
and that first meeting was called for
"Thursday" (would be Aug. 13)




st)

\IF

Memoranda concerning the
Federal Reserve Board taken from
the diaries of
Charles S. Hamlin

a history of the Federal
, I have been asked to put together
in my diaries and other records.
Reserve Board as taken from entries
important
exhaustive, but they merely note
These records, of course, are not
day.
points taken dawn by me from day to
blished by the Act of Congress
The Federal Reserve Board was esta
of December 23, 1913.

of five members,
The Act provided for the appointment

s and
two, four, six, eight and ten year
the first terms being arranged for
ExThe Secretary of the Treasury was
all subsequent terms at ten years.
an
the Comptroller of the Currency was
Officio Chairman of the Board and
ex-officio member.
appointed by President Wilson
The membership of the Board finally
was as follows:

Warburg, four years;
Charles S. Hamlin, two years; P. M.

:dialer,
G. Harding, eight years; and A. C.
Frederic A. Delano, six years; W.P.
ten years.

rnor of the Board.
C. S. Hamlin was designated as Gove

ress the name of Thomas
President Wilson originally sent to Cong
t because
the objection to him was so grea
D. Jones of Chicago as a member but
withhe finally asked to have his name
of his connections with trusts that
no was substituted.
drawn and the name of Frederic A. Dela

President Wilson

e
Governorship of the Board to Honorabl
offered also a membership and the
the same.
Richard Olney of Boston who declined




2

I shall note here various entries from my diaries having to
do with the personnel and the history of the Board.




"Had letter from William Rice saying
.5_19],.
1
Mai- 11
that Governor Peabody had had a taDc with Secretary McAdoo and
that the latter wanted me to accept some position in Treasury
to help him in tariff, etc. matters and Rice asked if this
would be agreeable to me; said Franklin Roosevelt knew of this
and that Mr. McAdoo was to lunch with him Sunday and that if I
would wire him he would let Roosevelt know how I felt about it,
etc.
March 16. "About four P.M. Judge McAdoo of New York called me
on long distance telephone, said he was authorized by Secretary
McAdoo to tender me my old position in Treasury and begged me
to accept it. I said I could not possibly accept as I had no
inclination to go back to the Treasury and I had accepted from
Governor Foss the position of Water Commissioner and that I had
decided to withdraw from the practice of law and give my whole
time to this office. Finally after a long talk, Judge McAdoo
asked me if Secretary McAdoo could not get a man satisfactory
to him and should bring up the matter again, would I not consider
it from a point of view of duty to the Party. I told him that
if such a request should later be made, I should give it consideration from the point of view of duty but that I could give no assurance that I should accept it, but that I would not decline it
except after most careful consideration from the point of view of
duty; I said from the point of view of inclination, I have absolutely no desire to go back. He finally said the Secretary might
later write me putting it up to me as a duty to the Party.
I then called up Rice,-he said Peabody and Roosevelt had
never mentioned specifically any particular office, but that they
knew Secretary McAdoo would gladly give me any office I cared to
take.
March 24,

Went to Washington to argue Port Diff. case.

March 25, Called on Secretary Lane. He said, and already had
written me, that I ought to push myself more, that I should be
given some important position, etc. I said I was an applicant
for no office, that with me it was wholly a question of service,
and that I cared for nothing enough to ask for it and never could
or should. Told him about Secretary McAdoo. He agreed with me
that there was no reason why I should feel any sense of duty to
go back to the Treasury. He evidently wanted to know whether
there was any office I would accept and finally in reply to an
almost direct question, I said that I could be of more service
as e.g. Ambassador to Japan, with which country I was familiar,
but that I would never ask for this or any other office;--that

3




I did not care enough for any office to ask for it and that
even if I wanted anything badly, which I did not, I could and
would never ask for it. I spoke of Rice as Minister to Holland
and also spoke kindly of Brandeis which seemed to interest him
greatly.
Returning to the hotel I found a telephone call from Mr.
Newton, Private Secretary to McAdoo--I had left a card that
day for McAdoo but did not ask to see him. Called up Newton
who said the Secretary wanted to see me the next morning. I
said I must go back that night and he asked me to wait a minute;
he then said he had seen the Secretary who wanted very much to
iIVIi
see me, but had
special to say to me. I expressed regrets
that I could not stay over.
I then called up Bertie who said there was an important letter at my office from Judge McAdoo. I then called up McAdoo in
New York and found him very angry that no letter had been sent
me from the Secretary--said the Secretary had put him in a false
position, etc. I told him of my telephone message and he begged
me, out of consideration for him, to stay over and see McAdoo.
I told him not to worry on my account as I did not want the
office and did not see how I could possibly accept it even from
the standpoint of duty. Finally I agreed to stay over and call
on McAdoo. Agreed also on returning to stop over in New York
and see him.
March 26, WednesdaiL_ Called on Secretary McAdoo who seemed very
glad to see me and said I was better qualified than he to be
Secretary of the Treasury. He spoke of Judge McAdoo and said
that he hoped he could consider me as available for Assistant
Secretary, if, according to my talk with Judge McAdoo, he could
not secure the kind of man he wanted. I told him I had no inclination to return, in fact, I decidedly did not want to come
back, and that I certainly could not be considered as being 4n1
any available list. Finally, after a long talk, he made me
promise that if he could not get the right man for the place,
and should take tne matter up with me again, I would give it
careful consideration from the point of view of duty, although
I said I could not promise to accept it. I finally said, we
will leave it this way, and I shall not expect to hear from you
again unless you are absolutely unable to get the man you want.
He seemed very much pleased and we left with a perfect understanding.
Thia A.M. took breakfast with Andrew Peters and went over
whole matter with him; he said I would be very foolish to come
back in this position, that the Administration would gladly give
me anything I might want. I told him just what I told Lane and
said I would never ask for anything.

4




That night had talk with Judge McAdoo from University
Club, New York, over telephone. He said Secretary McAdoo
told him that President Vinson said this position should be
tendered to me and asked him as a friend of mine to call me
up and find whether I would be willing to accept it. Judge
McAdoo said he telephoned Secretary McAdoo as to his talk
with me and he said he would write me begging me to accept
as a matter of duty.
Said that later, hearing that Secretary McAdoo had not
written me he had told Secretary McAdoo how annoyed he was and
that it had put him in a false position etc; that Secretary
McAdoo asked him if my appointment would not interfere with the
present political situation in Massachusetts; that he had said
he was sure it would not and that the Secretary then asked if I
would be in sympathy with the Administration and he replied,
absolutely yes, that I had been a Tariff reformer for many years.
Judge McAdoo then said something leading me to believe that
Jos. H. O'Neil had been talking with the Secretary and that he
was not very favorably disposed towards me; that he told the
Secretary that O'Neil and his friends were not in sympathy
with Wilson and that Secretary said laughingly,--"Well, I guess
we'll have to give Jos. O'Neill the slip". I explained fully
to Judge McAdoo my position in political questions since 1896,
and that I was Vice President of the Wilson College Mens League
and President of the Wilson League of Massachusetts and that I
was in absolute sympathy with the Administration. Judge McAdoo
said that after my telephone message he had sent a long telegram to Secretary McAdoo, stating how annoyed he was, etc. etc.
March 19. Confirmed by Council as Metropolitan Water Commissioner
at once determined to give up practice of law and resigned as
local counsel of C.P.R. (Sent letters to Shaughnessy & Creelman,
General Counsel.)
See Scrap Book as to collectorship of Boston; my name presented
by Congressmen on list of ten; I was only name receiving votes
of all the Congressmen.
Several Congressmen told me that Secretary McAdoo said there
was some opposition to me as Assistant Secretary from Massachusetts.
Mr. Thacher said McAdoo asked him if fact that I had been counsel
for B.01. RR. should militate against me. Thacher said, absolutely
no, that my services were needed as an expert on Interstate Commerce and Interstate Law and that it was to my credit that my
expert knowledge on these matters was recognized.
Mr. McNary also told me that Secretary Bryan asked him if it
was true that the fact that I had been counsel of the B.01. RR. was
not generally known and that he had told him that this had been a
purely political charge and that there was nothing in it; that he,
McNary always had known this and that my work had been in connection

5




with the Boston Chamber of Commerce and that everybody cognizant with these matters knew it. He said Bryan spoke very
pleasantly of me.
July 21, Monday. Secretary McAdoo in Boston. Telephoned me
but I was out at COrey Hill hospital seeing Jane who had just
been operated on. On returning, called up Secretary McAdoo
but he had left for New York.
Tom Riley saw him and strongly urged my appointment as
Collector. Secretary McAdoo kept saying--let's assume that
Mr. Hamlin is out of it or is dead, but Tom said I can see
no one else unless he is to be Assistant Secretary. (Tom had
written several letters as also Dr. Coughlin, urging this
strongly.)
July 232._Wednesday. About 3:30 P.M., McAdoo called me on long
distance telephone from Washington. Said he wanted me to accept
old position of Assistant Secretary, that he could find no other
man as well qualified, that it was my duty to accept, that he
would have called on me long ago except for reasons which he
would fully explain when he saw me, that while he fully appreciated that I did not desire the place, yet he needed me badly
and that the Administration must have me. I said I would at
once go to Washington and talk matter over and would arrive there
Friday A.M. He said he could not wait and, in fact, he had already sent my nomination to the President, relying on my sense
of duty to accept. Finally, I told him that while I did not
want this nor any other position, yet I did want to help the
President and himself and that I could not resist this
call to
duty and, therefore, placed myself unreservedly in his
hands.
He thanked me most warmly and wrote me later a most kind appreciative letter. (See scrapbook)(Page 96)
July 25, Friday.

President sends my name to Senate.

July 26, Monday.

Confirmed by

enate.

July 29, Called up Grenville Mac Farland on telephone on
another
matter--he said he was delighted at my appointment, that
ever since
I introduced, or rather reported, the resolution of the B.U.
RR.
as Chairman of Committee on Resolutions in the State
Convention of
1912, he knew I was a man who could be trusted to do absolute
ly
what I believed to be right and that I could always count on his
support.
July 30, Wednesday.
. Secretary McAdoo in his telephone message
aced me to find out something as to Wm. Taylor, candidate for
Collector and suggested my seeing Brandeis. I had met Brandeis,
I think the day before, in the University Club and he had told me
that he had seen McAdoo on Sunday at Beverly and had strongly
endorsed me for Assistant Secretary saying that McAdoo could
have
perfect confidence in me. I called at Brandeis'
office this A.M.
He said he had telephoned me the day before,
that he felt Taylor's
name should be dropped. I told him I
talked with Grozier
at

6




Provincetown the day before and that he had said he had written
a confidential letter to McAdoo about Taylor; that whi]e he did
not say what he %rote, I rather felt from what he did not say,
that the letter was hardly favorable.
Brandeis said that Hudson was honest but not a strong man;
that he had recommended Hays of Springfield to McAdoo the Sunday
before and after some talk he said he would recommend Jack ylieelwright
for Collector of Internal Revenue. Said he would like to see appointed es Collector of Internal Revenue, Charles Warren but he
could not advise it because of the widespread opposon, not confined to anyone factor, to him.
I told him Hayes was one of my warmest gupporters in the Foss
fight and thatrecommended him everyone would say I was rewarding my friends. I told him if I was asked, of course, I should
say that he was a first-class man. Brandeis then dictated a letter
to McAdoo, in answer to his request for a recommendation, and indorsed Fives and Wheelwright.
I then told Brandeis I had made up my mind to indorse or recommend no one for this office as I could be of more value to McAdoo,
under the peculiar situation and the sensitiveness of the Congressmen,kept absolutely out of it. He fully agreed with me as to
the expeaiency of this.
Brandeis in the letter said Taylor should be dropped. I agreed
to this especially in view of an interview with Special Agent Chandler
saying Taylor was very thick with Mrs. Shevlin, of the dressmaker
smuggling case and had published a statement in
e'Ss as to who
put on a label on her trunk which information coult only have come
from her; that Taylor had been called before the Grand Jury but could
not adequately explain this.
July 30, Wednesday.

Left for Washington.

July 31, Thursaay. In Washington. Talked with McAdoo. Begged to be
excused from making any recommendation for Collector. McAdoo was
very cordial and said he thought my course was wise. I advised him
to keep in close touch with Brandeis and to do nothing without conaulting him, that he would be fair and would Iiigo out of his way to
helS him. Lunched
Congressman Murray. Told him would have
'I
nothing to do with Collectorship.
August 1, Friday.

Took oath of office.

Nearly 100 were present.

August 2, Sat., Dined at Chevy Chase Club with Senator Hollis and
Saulsbury.
August .7,, Sunday. Garrett Dloppers dined with me at Metropolitan
Club. Professor Bullock later joined us there.
First case I had was as to sending Special Agent Chandlers to
Paris to help District Attorney in Boston dressmaker smuggling cases.
Assistant Secretary Curtis declined to let him go although
District




Attorney and later the Attorney General said interests of
Govern—
ment would be jeopardized if he did not go. Conferred with
Secretary
and he agreed Chandlers should go and I so advised
him.
August 4 — 11. Secretary McAdoo read over my digest of the
Financial
Bill and one morning sent for me and introduced me to Representative
Glass. We had a conference and finally they asked me to go over the
Bill and prepare amendments removing all inconsistencies and making
any other suggestions I wanted. I prepared a long list of amendments
after many conferences with Glass and finally the Secretary said he
would accept them without even reading them, he was so busy. Mr.
Willis of New York Journal of Commerce is retained as financial ex—
pert by the House Committee and Glass telegraphed him to come down.
I found that he agreed with me in almost every suggestion I made.
The Secretary gave me one proposed amendment allowing Reserve Banks
to discount directly for individuals' notes based on warehouse receipts
without even the indorsement of a member bank; he said President Wil—
son was inclined to favor this and he must be prepared to give him a
damned good reason for rejecting it. I pointed out that at least
the notes should be endorsed by a member bank and that if this were
done, while I did not like it, yet I would not object if necessary to
save the Bill; Willis took the same position. Glass said he agreed
with us and would fight hard to reject it in- toto but would insist
anyway that such paper must be endorsed by a member bank.
I tried hard to put in a provision that the Reserve notes should
have in them the name of the Bank taking them out, but Glass said
Bryan would not agree to this and that he was following the Bill care—
fully through his friends on the Committee; that it was Brandeis who
insisted that the notes must be issued by the Government.
I also revised an amendment authorizing national banks to estab—
lish savings bank departments, striking out permission to buy other
banks for this purpose. Glass said if this were allowed certain
Republican support had been promised for the Bill. I also revised
amendment as to exchange of 2% bonds for
I gave Glass a copy of the Massachusetts laws on Savings Banks.
The Secretary also turned over to me Bullock's suggestions for
amendments to Income Tax law asking me to advise him whether to
accept them.
August 6, Wednesday. McAdoo said he wanted Brandeis to act as counsel
for receiver of a failed Providence Bank. Advised him again to con—
sult Brandeis on all appointments. McAdoo wired him to call him on
telephone the next day.
AugustAu Friday.
Mite House.

Went over with Bankers and met President Wilson at

August 10, Sunday. Maher calls on me. Said Quebec Central Railroad
had asked to be bonded to carry passengers' baggage from Montreal
to United States; that only authority under law was to carry merchan—
dise from one point in United States to another through foreign

8




contiguous territory; this was covered by Sec. 3005 and 3006 Revised
Statutes; that no foreign corporation had ever been bonded for
such purpose except that Canadian Northern Railroad had been given
auch a bond two years ago but had executed it only this June. Under
this bond, baggage of passengers could be forwarded from Quebec
tS anIIn in United States by delivering it to an American car—
rier at first post of arrival nIited States. The approval of
this bond was never published in Treasury decisions.
Maher said these carriers have all necessary facilities apart
from this. United States officers examine baggage at CAlebec and
if not dutiable it is put in a sealed car going through to destina—
tion without delay without entry if seals are intact; if dutiable
eS
at cuebec
it can be forwarded under consular seal or
can give notice to officer at frontier and it can be appraised
Act.
there or an entry could be ms.de under
The only authority under law for such bonded routes is from
one United States post to another and even these bonded routes
have been limited to American carriers.
Apparent exceptions:
eIs of
The Grand Trunk Railroad is incorporated, as to
C.P.Railroad
is
also
the
so
Maine;
of
laws
the
under
Maine,
route in
anI it also owns the IS Line. Maher said the C.P. Railroad once
made an application for such a bond and then withdrew it, before
1893. Maher said the Quebec Central application was on the way to
me but he would mark it special or in some way call it to my atten—
+vion.
Maher said other laws were Sec. 3000 and 3001 relating to ap—
praised goods andFeb. 13, 1911, authorized bonded carriers to
lade and unlaid at night; also the 1.T. Act of June 10, 1880 relating
to unexamined and unappraised goods.
Maher also said Secretary Shaw had consolidated all such bonds
into one form, making rather absurd results.
August 11, Monday.
John Bassett Moore dined with me. Said he was not happy in
State Department and should not stay there longer than one year;
that the Department was not properly organized, there being no
accurate divon of duties between the Assistant secretaries; that
frequently inconsistent letters were sent out; that Osborne was a
sheep rancher and knew absolutely nothing about his duties; that
J-Idee altho' very able was old and feeble; that Malone paid almost
no attention to his work, continuing the practice of law in New York.
B was very bitter against ueneral Foster; said that when Secretary
of State or just heore, he had many claims on behalf ofroreign
Governments and that he made a contract with Mr. May, a lawyer, to
prosecute these claims, he to receive a share in the fees; that he
had a dispute with May who thereupon filed the contract aith the
State Department when Ge'rsham was Secretary of State; that Foster

9




tried to induce Gersham to remove contract from the files but
Ge'rsham refused and this led to the quarrel between them; that
undoubtedly by this time he believed Foster had succeeded in getting possession of them through Lansing his son-in-law. (Judge
Gusham once told me the same story.)
August 13, Wednesday. Secretary Bryan called me up to ask if General
Frank Shuter was counsel of Boston & Maine Railroad; I said he once
was but resigned; that I resigned as counsel in 1910 and I did not
know whether Shuter was reemployed but that Senator Hollis could
doubtless tell him.
In evening called on Bryan and was with him an hour; he was
very cordial; spoke of his appointment; said President Wilson could
not help offering it to him nor could he help accepting; said he
fully believed Senate would not confirm him; said he had about given
up ambition to be President, that he wanted leisure time to study
and that in threemonths he could cram enough for a year; talked
much about4ible history and read many extracts from his missionary
address in Scotland giving me a copy with his autograph. Said he
had decided to replace Streeter from Inter. Boundary etc. Committee-that he heard he was personal counsel of Mellen. I said if he wanted
his resignation I felt sure Streeter would at once accede if he wrote
him that he wanted a man on the Committee in full sympathy with the
Administration and he said he would write him a nice letter along
these lines. Said he wanted Mrs. Bryan to know Bertie. Spoke of
Financial Bill and said notes of banks passing from hand to hand had
all the functions of money. Was called on telephone several times
as to financial bill and suggested men who could influence Democrats
to vote for Bill; evidently was supporting it and taking keen interest
in it.
Aurnst 10 - 17. Many complaints as to sealing of cars going through
Canada between United States points; sent Special Agent Wheatley to
examine into it.
t.
i
4 L
Thursday. Congressman Curley called and said %rwwaor/-'"---7,
August 21,
Fred Williams wanted an ambassadorship; that he was out in the cold,
everybody against him and he told him we'd help him; said he had
bitterly attacked Bryan in Nebraska but that he, Curley, had seen
Bryan who bore no resentment; also that he had just seen President
Wilson and was surprised to find him apparently not hostile, but if
anything apparently friendly. Said he came to me to see if I would
oppose Williams as undoubtedly I would be consulted.
I told him I should not object in any way; that Williams had
attacked me unjustly but that his attack was so grotesquely untrue
that I could afford to ignore it; that in any event I have no malice

I10

and that if he saw fit he cauld say this to Williams, not in my
name, however; thaWilliams came to Washington I should be glad
to see him and we could settle up our old scores in five minutes;
that from the view of political strategy I saw much to commend such
an appointment and that so far as I concerned I had no objections
to offer but would let bygones be bygones. I said I could hardly
write a letter, the matter not being nu Department but if asked
I would cheerfully express the above views. Curley seemed very
much pleased and said he would tell Williams of our conversation.
August 25. SaturdAy. Met Chief Justice White at Shoreham and we
sugar,
took breakfast together. He was very pessimistic about
said he had a plant costing 4565,000 which was not now worth 565 cents;
said he did not complain, however, if Congress believed this to be
best policy; said he was inclined to believe that Mexican matters
could best be worked out through Huerta. He had come up from hhite
Sulphur Springs on way to American Bar Association meeting in Montreal.
ku,s12.41.__S_unslaz. Took long drive with Attorney General McReynolds
and then walked home 2i miles and we dined at Metropolitan Club. He
asked me again to get a first class man for him as Assistant Attorney
General; said very difficult to get a Democrat; suggested George
Fred Williams; he said he was too cranky; I said he was a very able
lawyer and that he had attacked me very bitterly and, as I was sure
aometime he would realize, unjustly, but that I never allowed such
things as this to cloud my judgment asto a man's aby. He also
spoke of a suit versus Southern Pacc Railroad and I suggested
Brandeis; this seemed to strike him favorably; he askedthought
he would be wng to take the poson as suit probably must be
brought in Kentucky; I said I felt sure he would. He said he had
offered to retain him in the United Shoe Machinery and New York,
New Haven & Hartford eases but that Brandeis advised against this.
as out whether Joseph Knight was a DemoHe also asked me to
crat as if he wasphe thought he could find a place for him for office work. I strongly urged
ma.cnes brother for same position and he said he would consider it. He said r.a; wanted him
to appoint John A. Sullivan District Attorney and he asked about
Tom Riley; I said Sullivan was a splendid man but that I had endorsed
Riley and I felt he was a man well equipped for the place and moreover had done splendid work as Chairman of State Committee; I begged
him to consider him carefully far the place.
August 25. Monday'. Gilman (Private Secretary), Halstead and Wheatley
dined with me at Cosmos Club to talk over complaints of illegal practices at Black Rock, Buffalo, in connection with sealed merchandise
en route from one point in United States to another entering Black
Rock. Wheatley said it had been source of trouble for years, that
whole trains had gone through without inspection, that entries had
been made days after the cars had gone through, that our Inspectors
were as friendly with railroads; that the collectors were in close
touch with railroads or had been through practice of selling blanks,
abolished hy consolidation act. Wheatley suggested for Buffalo a




U
customs zone system, said when he was there last week, one of the
railroad managers siad it the right way but said would require buying more land by Railroads and that the expense was prohibitory. After
a long confrerence, we decided to appoint a customs commission of
three; one of whom should be enperienced in border work, to consider
the advisability of a customs zone and to hear all parties in interest.
Wheatley also said he thought the railroads should be obliged to put
dm all seals and put number of the seal on the car manifest. There are
many empty cars going through Black Rock and these have no manifest
except what is called a bridge manifest issued by the Inter. Bridge Co.
owned by Grand Trunk stockholders. Wheatley said the policy of the
bridge owners was to send as many cars as possible over the bridge
to get the tolls and that there was great congestion there; that the
Michigan Central could easily send its empties through Niagara Fells
and thus greatly relieve the congestion. The Canadian regulations
require railroads to put on seals and put notation on manifest.
. Met Assistant Secretary Malone at breakfast at
Aggust 26. Tuesday.
Shoreham; said he had been a week in Boston studying collectorship
situation; that he should report to Secretary McAdoo that Edmund
Billings should be collector and perhaps Maynard for surveyor;
that a rumor had reached his ears that Maynard had once been convicted
for crime and that he was looking this up. I said I thought Maynard
night do for surveyor. He also said Malley would be good for Internal
Revenue Collector. Said he heard John A. Sullivan was disliked by
Catholics as having somewhat separated himself from his Irish and
Catholic friends. I said I felt sure no truth in this, that Sullivan
was a man of highest standing and character, etc.
Said he had met with Mayor Fitzgerald; had great difficulty in
getting him to say whom he wanted for collector.
He praissed Burnett
and Malone, said he had heard that Burnett was a high brow and aristrocrat ; that Mayor Fitzgerald said this was not so and that finally
he said that, so far from this being true, Burnett was a gang man and
while Secretary of the Elevated RaAway. he had passed over the stuff
the legture.
Malone praised Carroll, of the Wilson League and said he ought
to have eome office. Malone also said that Colonel House thought that
Hodges should be kept as appraiser in which I cordially concurred;
also said McAdoo told Colonel House he was delighted with me. Malone
said I had put the Administration under great obligation to me by
finally consenting to become Assistant Secretary.
August 27, Thursday. Secretary McAdoo told me the President intended
to enforce the Neutrality Law from now on most rigidly against the
Huerta regime; that he did not much care, confidentially, whether the
insurgents did succeed in getting arms, etc. from United States; that
the collectors must use reasonable dpscretion; that both he and the
President felt that it was necessary to have collectors in absolute
harmony with the Administration. He asked me to call for resignation
of the collector at
, Texas, and gave me name of new man for
place.
This P.M. some one telephoned that the privilege of free entrance
of baggage without examination be given to Attorney General who
was
just going to Montreal to convention of American Bar
Association . I



12
found no precedent for such a privilege to cabinet officers; only
apparent exception was when Secretary Knox and later Root went to
South America but they went on strictly official business to South
America and even practically in positions as Envoys. The only
courtesies granted cabinet officers were the "courtesies of the
post" which did not carry free entrance without examination. Went
over to see Attorney General; he said he knew nothing of this and
had made no request; that, of course, he wanted no such privilege.
I told him if such unusual privilege were granted some newspaper
correspondent might discover it and attack him, but that I would,
of course, give the courtesies of the popt to him. He seemed very
grateful to me for speaking to him.
Advised him to consult Mr. Olney as to good man for Assistant
Attorney General.
ku4ust 28, Thursday. John P. Mitchell, collector at New York and
Dr. Cleveland, expert, came down and we had a two hour conference
on the reports submitted by Dr. Cleveland on changes in New York
Customs House.
Mr. Boright representing the people of Richford and Congressman
Green (Rep.) of Vermont called to talk over application of Canadian
Pacific Railroad to have merchandise from Canada going into United
States at Richford, Vermont, en route through Newport, Vermont, to
Boston points entered at Newport rather than at Richford. M. Boright
had a brief which he said contained some reflection on Canadian Pacific
Railroad and department clerks and said before filing it he had been
advised by Congressman Greene to strike out all such offensive references.
Be asked me as to this and I said he must use his own judgment as to
this. He asked me to look over the brief this P.M. and also report of
Mr. Stine who had been asked to make an investigation. I read it
over and he returned with the Congressman later; he said he found at
the Customs Division that Stinets report had not yet been received.
I told them that I could (not) take up the matter then as I was going
to Boston the next day--they both agreed that, of course, I could do
nothing until Stinets report was received. Mr. Boright said Congressman Green had told him he ought to strike out certain sentences in his
brief and he would do so and fit it the next A.M. At his request I
told him the Department would take no action, unfavorable to his contention that Richford should not be disturbed, without giving him an
opportunity to argue the question fully.
I told them both that I should give the matter my most careful
consideration, that I had been counsel for the Boston and Maine and
Canadian Pacific Railroad but had no matters in connection with the
National Government since 1910; that I should enforce the laws or the
United States without fear or favor. They both expressed themselves
strongly and warmly that they would be perfectly satisfied with my




decision in the matter.

13

August 27 (CoV.). During his talk with me McReynolds said he was or
would be attacked because prior to appointment he had given advice to
corporations under New Jersey "Seven Sisters" law. Said also he had
given opinion to Steel Trust as to how to keep within the law; also
that he had written the President telling him of this before his appointment.
Week end.ia Se..ptember 6th. At re,,Jiest of Secretary McAdoo I wrote a
carefully prepared legal opinion as to power of Congress to levy income
tax on bond interest of American corporations due to nonresident foreignaB
My opinion was that Congress could not levy such a tax on the foreign
bond holders but could tax the interest as an excise tax on ;__'fl-n corporation, which, however, it had not don*n the Act. Seretary
McAdoo wrote letter, prepared by me, to Senator Williams and Reresentative
Hull enclosing my opinion and suggesting that Act be made perfctly clear
one way or the other. Secretary asked me to speak to Hull abou it and
I telephoned him and had several conferences. Also wrote him sveral letters. See letter book. On Saturday, September 6, Senator Willams introof IS
duced an amendment which was passed by Senator in
ee n
on the feonemr
tp
in
ti namt ere
b
igssary
ce
caiatl ill mad
nFtnosi
e ndmsRte n as
d
yAlso pr
able in
tnaaesns shouaBxld be re ed
nch nge i neBpairalxel tlo isestuf fchoe fc that eseyrmtvoee
ld nly. Secretary McAdoo wrote me that these had better be taken
up in Senate but that he had sent a copy of my letter to Congressman
Glass.
.
. Assistant Secretary Williams telephoned me at
September 6, Saturday
that
Senator Simmons had sent Secretary an important
Hotel, 3 P.M.,
letter as to amendment allowing damage allowance as imported wines,
secretary, Mr. Wright,
an
etc. He sent letter to me and Senator Simmst
brought it up. Department was closed and all clerks away. I prepared
Simmons and
•it
to
a draft changing proposed amendment and brought
had conference with Senator Pomerihe who introduced the amendment;
passed the amendment.
he accepted my changes and the Senate in
See my letter to Secretary.
Sept9mber 9, Tuesday. Secretary McAdoo said he should appoint Billings
Collector at Boston and he called up those Congressmen in town to tell
them; many were away. Peters, Philan and Dietrich came to see him and
Dietrich bitterly protested vs Billings. Peters told me McAdoo
offered the position to him but he declined it. I had nothing to do
with proposed appointment of Billings and knew nothing about it until
McAdoo told me, except that Assistant Secretary Malone told me one day
at breakfast that he had been in Boston and should recommend Billings
(See Scrap Book, p. 20)
Se-retary McAdoo asked me about Billings and I said that while I
did not know him at all well I had the highest opinion of his capacity
and integrity and believed it to be a fine appointment from the poiat
of view of character and capacity, but that I feared it would not be
agreeable to the organization.




14

September 10 Wednesday. Protests continue to come in against Billings.
Andrew Peters told Secretary in my presence that he ought not to appoint
him because of opposition of State machine, Congressmen, etc., but
Andrew was evidently scared by the noise. Peters said all the Congressmen would have and in fact did, agree in Hudson but Mayor Fitzgerald
bitterly objected which threw Hudson out.
secretary McAdoo told me he should not yield an inch and asked
me to go right down to the Senate to see if Lodge and Weeks would
interpose any objection to Billings. At once called on Senator Lodge
who said Billing's appointment would be a great mistake, that he could
not get along with anyone, that he had heard he was very wild in early
life, that we were the ones who would suffer from his appointment
which he believed to be a very foolish one. He said, however, so far
as he was concerned he had no intention of fighting his confirmation,
provided Senator Weeks raised no objection, unless, of course, charges
were filed against him which on investigation proved him unfit. He
told me to reach Weeks on telephone, if possible, he thought he had
gone to Boston. Senator Lodge said he interposed no objection either
to Maynard or Malley (Surveyor and Internal Revenue Collector) and
cared nothing as to Naval officer (Nash of New HaMpshire) as that went
to New Hampshire although he thought it ought not to go there.
Went back to Treasury and then got Weeks on telephone at Boston;
he said he would interpose no objection to Billings, although his
opinion of him was exactly what I told him Lodge said to me, nor to
Malley nor Maynard.
Senator Lodge raised no objection to calling for resignations
of Graves, Surveyor and Lyford, Naval officer; said Ned Curtis had
told Doty, the Sub Treasurer, he ought to resign at once.
Secretary McAdoo said if the Surveyor and Naval officdr had
not resigned when asked he should have said publicly, if necessaly,
that he had asked resignation of Surveyor because of the dressmaking
frauds in his division on ground that while, of course, not personally
cognizant of this, he must be held responsible, and as to Naval
officer the good of the Service demanded a change as this office cost
4 cents to collect a dollar as against only 2 cents at Philaelphia
and that the expense must be cut down and he believed a new man should
be put in to do it. I believe both above reasons are absolutely sound
and that on strictly business principles, new men should be put in.
This evening I wired Lodge as to talk with Weeks.
In evening McAdoo dined with me at Metropolitan Club; said he
had talked with Mayor Fitzgerald over telephone and told him that if
Billings were dropped, Maynard would be also. Said that Billings
was approved by Mr. Olney, Grozier of Boston Post, Brandeis and many
others.
September 11, Thursday. Protests continue to come in. NortAn of Bos-o)
ton Post sent strong telegram favoring Billings which I sent to
Secretary. Also gave him editorials from Record and Transcript.
In P.M. Congressman Murray called and said the Congressional
delegation had agreed on himself for Collector and he should accept
and resign from Congress. I told him he would be very foolish to do
this and give up his Congressional Career.
The President is evidently hesitating and Newton (Private Secretary to McAdoo) says that Tumulty is using his influence with President



15

against Billings, that Tumulty, being a Catholic, wants one appointed.
I told McAdoo that while he knew I had nothing to do with appointment of Billings, I considered it a splendid one, and further,
if it were not a good one it was now too late to retract. Secretary
---7
McAdoo said Billings had been asked if he would accept it, and had
said he would if he could remain a director of some trust company.
September 12, Friday-. President is sending from time to time, exceptions under Neutrality Act permitting exportation of arms, munitions,
etc. from Texas to Mexican points; consigned usually to mining companies; I suspect that these ultimately may get into the hands of
Revolutionists. President Taft construed Neutrality law as permitting
shipments to the organized Government of Mexico, but our Administration has refused to permit shipments to either Party, the exceptions
being shipments to American corporations and individuals to protect
their property.
Secretary McAdoo went with President to Cornish last night.
Protests vs and telegrams for Billings for Collector continue to
come in. I prepared a telegram to McAdoo to effect that if it was
determined that Billings was ineligible, Fred J. Stimson would be
an ideal compromise, but after consultation with Newton, we decided
not to send it.
September 17, Wednesday,. C.P.R. asked authority to enter Tea from
Vancouver destined in Manifest (by error) for New York at Chicago.
New York Collector sent papers from New York to Chicago. I signed
telegram refusing to allow Manifest to be changed, adding that if
C.P.R. delivered the Tea, which was free of duty, at Chicago instead
of at New York, its destination, it would be liable to a fine of
$25.00 on its bond. This telegram was prepared in Customs Division,
I had nothing to do with the matter except to sign the telegram laid
before me.
Maine Central Railroad writes me asking that Customs track at
Vanceboro be discontinued, also that inspections by night be allowed;
this was discontinued by Assistant Secretary Curtis.
September 18, Thursday. Mr. Maher called at Hotel; said the Canadian
Northern bond for carrying baggage to border would reach me today;
said no authority under law for it and that a similar bond approved
for Quebec Central Railroad a year or two ago was never published in
Treasury decisions. Said also I.T. Act gave all needed privileges
to border railroads, and that consular sealing no longer necessary
except so far as it dispensed with necessity for entry. (Brouns in
Man, says under I.T. entries generally along border, no examination
is required.)
Told Secretary McAdoo of Maherts calls on me and asked if he
thought it wise to allow him to come to me over head of Division; I
said he had given me valuable information as to practices of the
Division and that he was in Department when I was here bdfore. Secretary McAdoo said he thought I should use my discretion and permit
it if I thought it helpful.
I told him as to fact of Quebec Central bond not being published
as one of the things Maher had given me valuable information about.
I also told him about RichfordvNewport controversy, said I had been
counsel for Boston Chamber of Commerce and railroads of Northern New



16
England, including General Trunk and C.P.R., and that I felt that
there were many loose practices along Canadian border which must be
discontinued; that the Canadian railroads would bitterly object.
He said he would back me to the finish in enforcing the laws, only
to keep him informed from time to time, 30 he would know in a general
way what the decisions were.
September 19,_ Friday. The bond of Canadian Norfolk Railroad has just
come up to my desk--the one Mr. Maher spoke about. I asked Mr. Gilman to ask the Customs Division under what authority of law such a
bond could be authorized by the Department. Later he said there was
nD authority--merely international curtesy. I then asked if any
similar bonds had been approved in the past. He inquired and said
none. (Maher said Quebec Central had been approved.) I then called
for the entire record.
September 20, Saturday evening. Assistant Attorney General Dennison
came to my room in hotel and at his request I loaned him my Supreme
Court Digest of I.C.C. cases through Volume 214 and the digest, without index, since then.
September 23, Tuesday. Before onference ommittee with Secretary
McAdoo. He asked me to explain Customs Administration amendments.
Was "on the stand" 2!-t hours. Senator Williams is set against most
of our suggestions. Was at first rather savage but at end was
toned down.
•
Evening. Dined with Assistant Attorney General Dennison. Met Soli,—
Mayor New York, Wash. Post, Mr. WiLlert,
General Davis, Mr. Gavit,
edItor-of London Times. Mr. Berrill, Dept. of Justice, Mr. Frankfurter of War Depart. and Dr. Aisberg, Bureau of Chemistery.
September 24, Wednesday... C.P.R. through Twokey, appealed to me
directly to permit Tea - see p14.ge 29 - to be delivered at Chicago
instead of New York. Letter of Twokey said, or rather it was reported to me, that Twokey to Customs Division, that Special Agent
at Chicago told C.P.R., he would prosecute it if seals were broken.
Gilman said Halstead said he regretted having referred in telegram
to breaking seals on payment of penalty of 25. Gilman said this
privilege had been denied to American railroads two years ago and
decisions. I said if this were se to prepare a
published in
letter in accordance there with, insisting on shipment to New York.
Gilman said it was perfectly possible that importers had paid a low
shipment to New York, much lower
freight rate for through
than local rate to Chicago and by change of destination were trying
to secure benefit of this lower rate; also that importer might
think the tea was of such character that it might be rejected at
New York but accepted at Chicago. Letter sent ordering entry at
New York.
September 30. A few days ago, Speaial Agent Aheatly asked me in
an official letter to reassign mititturity Anthony Ludden of New
York from his excepted position under Attorney General's Office
to his old position of Customs Agent under Special Agents' Division
at New York. Reason given in letter was that Luciden was an able



17

lawyer and his services were needed in Special Agents work. Wheatley
came down with his letter; I asked whether Ludden was a Democrat or
Republican; he said a Republican but his services were needed in
strictly business reasons. I then said all right and wrote Civil
Service Commission to consent to transfer. A day or so later a letter
came from Civil Service Commission refusing to consent to transfer
and pointing out that while Ludden was Customs Agent In Eew York in
1911, he was a District Republican leader and had attended State
Conventions, etc., in absolute violation of Civil Service Law and
Rules; that Commision asked MacNaieh to reprimand and suspend him
and order him to resign from his politiai position; that they could
get no satisfaction from McNaigh; that they repeatedly pointed out
that he was defying the law and asked for his removal; that the excuse he gqve for violating the law even after notice was that he was
daily expecting an assignment to an excepted position; that McNaigh
then transferred him to excepted position in Attorney General's Department; that the COMMiSSi0/1 asked Wickersham to remove him complaindng
that for a deliberate violation of law, he had been promoted to an
excepted position; that Attorney General refused to remove him and
said he was not then violating the Law.
Wheatley never intimated to me anything about this record but
put his request on purely business reasons. Later I learned that
Halstead, Chief of Customs Bureau, had told Bean who was acting
Sup. Agent,--Wheatley being then in New York--that Ludden's record
was a bad one and should be inspected; that Wheatley brought down his
letter to me and the letter of the Department to Olvil Service Cornmission Nithout having it checked by Customs Division. The next day
eI
Wheatley came down with a letter to Wimple of Attorney General's
department in charge of customs matters in New York and in it he
asked WImple to take care of Ludden for the present, etc. I told
Itheatley I should not agree to this; he said he understood letter
was in accord with my instructions--I said this was not so. I had
merely told him he could send W‘mple a copy of the Civil Service
Commission's letter.
I told all the facts to the Secretary and he litx directed
that Wheatley be ordered to report in writing all the circumstances
leading up to his request for Ludden's transfer and especially to
state whether at the time of making request of me, he knew of Ludden's
record. As Wheatley was in charge at New York when Ludden was acting
as Customs Agent, he must have known all about it. I drew up memorandum directing Wheatley to report as above, also a letter to Civil Service Commission wtich Secretary McAdoo signed, stating that neither
he nor C.S.H. knew anything of Ludden's record until it was revealed
in this letter and that a thorough investigation would be made.
I had recommended Wheatley to Secretary McAdoo for appointment
as Sup. Agent in earnest suggestion of Assistant Secretary Curtis-see Curtis' letter to me--who said that Wheatley was the ablest man in
the service and would be absolutely loyal to me.
This case seems to be one of absolute disloyalty and I can never
trust Wheatley again. What we shall do about it will be decided when
the investigation is completed.




18

Ned was in Washington and came to see me at MetroSep:tember 30.
politan Club. Said he had seen Ex Senator Watson of West Virginia
in New Ybrk; that the Senator asked him to ask me to tell Secretary
McAdoo for him that there was much apprehension in banking circles
in New Ybrk because bankers feared that Secretary McAdoo was prejudiced against them; that he hoped Secretary McAdoo would do sometine to remove this fear; that eny bank violating the laws should_
of course, be punished, but it should be made clear that Secretary
McAdoo was not prejudiced against all banks; that it Aas difficult
now to secure loans from banks because of this general apprehension;
he further said he, Senator Watson, bad carried West Virginia for
Wilson.
I told Ned these matters did not come under my jurisdiction but
that, of course, I would tell Secretary McAdoo what Senator Watson
said. I added that, in my (pinion, the New Ybrk banks were determined
to prevent passage of any financial bill and would use every means
to accomplish their purpose as they realized this great centralized
power over credit would be materially cut down by this Bill and
diffused over the whole country as it ought to be.
Within the next day or two, I mentioned this to Secretary McAdoo.
he thought Senator Watson was egged on to these statements
said
He
York interests.
New
by the
October lto 6th. Have hadconsiderable trou,ble with exportations
along Mexican border. The Collector at Largdo asked instructions
whether to permit exportetions,--under the Joint Resolution of
1912 forbidding exportation of arms or munitions of war on proclamation of the President,--of horses, saddles, girths, hay and
other feed, etc., whether intended for Federal army or for other
parties. We thereupon asked opinion of Attorney General who declined
to give specific answer but laid dawn as a general principle tI•nly articles personally and directly used for war were Mumitions of
war Aithin the prohibition of the Joint Resolution; he also inclosed
copy of a former opinion that provisions and clothirg were not munitions of war.
This was all the help wecould get so we,proceeded to construe
the opinion and instructed the collector at Lol*dothat horses, saddles, girth, bay and feed were not munitions of war whether destined
for Federal army or other parties.
Later Senator Sheppard of Texas sent us a telegram to effect
that large numbers of horses were being shipped out of Lorado under
these instructions and that collectors were discriminating on other
and in favor
shipments such as clothing, etc., •against the con
charge.
latter
of
tion
of Federalist-5. I •ordered an investiga
Meanwhile, I discovered that Wickersham had given .555inion
that saddles were munitions of war, and the President sent over an
advance copy of a letter permitting exportation of one saddle thus
indicating opinion that saddles were munitions of war. I felt that
our instructions to the collector at Lorado, which were repeated to
collector at New Orleans, should be specifically passed on by State
and Attorney Generalts Department, and especially so whecIa%Helch
charger had asked
If State Department telephoned that the Mexican
permission to export 1,000 horses at San Antonio for his Government.




19

I called up Counsellor Moore who at first thought horses
were munitions of war; then I called up Assistant Attorney Denison
who also was inclined to think they were. Then I went to Secretary
McAdoo and advised him to talk it over with President; he went right
over and later said President did not fully understand the Joint
Resulution and thought he had discretion to shut off all supplies,
contraband as well as Munitions of war and that he personally would
like to do this as to all factions in Mexico. Then Secretary McAdoo
went to Moore who told him President had discretion only to permit
exportation of munitions of war in certain cases, and as to what were
munitions of war was a question of legal construction, but that the
joint resolution did not touch in any way articles which, tho' not
munitions of war, were contraband of war.
Secretary McAdoo then asked me to see Moore and on Friday P.M.
October 3. I went over. Mr. Moore said he had prepared a memorandum
to the effect that we were right that horses, to whomsoever consigned,
were not munitions of ;Jar, nor were saddles, but as Wickersham had
ruled that saddles were_ munitions, be should not disturb this altho'
he was sure it was an erroneous ruling, and that Attorney General
McReynolds ought to overrule Wickersham. He also said McReynolds
opinion could only be construed as the Treasury construed it.
I then called up Denison who said he was inclined to agree
were not munitions of war and said Wickersham's opinion
horses
that
was
hastily prepared and was wrong. Be was going away
saddles
on
confer with Herron as to the second request for an
to
me
and asked
opinion of Attorney-General which we sent over the day before. Later
Mr. Moore's memoranda arrived, as above.
October 4, Saturday. Herron came over and said he had prepared an
opinion for Attorney-General's signature that horses were not munitions of war and that he should also overrule Wickersham as to saddles. In evening dined with Moore at Metropolitan Club; he suggested
to tell Herron that he could say that Wickersham evidently meant
military saddles and thus he would appear not to be overruling him.
October 3.1._Friday evening. McAdoo telephoned me that President had
signed tariff bill and the Treasury at once wired collectors all over
the country that new law would be in effect Saturday morning. McAdoo
failed to ask me to be present.
October 6. Moore, counsellor, State Department, sends me meorandum
to effect that horses are not munitions of war.
October 3, Thursqaz. Accepted invitation to address Massachusetts
Democratic State Convention if Tariff Bill not inacted into law by
Saturday. A rumor reached us that the Convention would not specifically
endorse the President on the Tariff Bill. I called up Tom. Riley in
Boston; he denied this and asked me to draw up any planks on.
Administration's Tariff and Financial Bill I wished to go in the
platfOrm and he would see that they were inserted. I mailed such
planks which I prepared later that P.M.




20
October 4th.
Democratic State Convention struck out, or rather the
Saturday
Resolutions Committee, all specific references to the President, Secretary of State and Secretary of Treasury. Never mentioned either in
platform altho' it did contain a perfunctory indorsement of Tariff,
Financial Bill, etc. Much indignation here.
October 6 Monday. Secretary McAdoo said Tumulty was largely responsible for delay in Billing's appointment as he had advised President
to wait, etc.
Lunched at Shoreham with Attorney General, Malone and Tumulty.
Tumulty said he wanted President to send in Billing's name alone. I
suggested that this would make public think President was angry because
not endorsed. I thought he should quietly send in the whole slate, as
if nothing had happened.
Attorney General some days ago asked me to write Sherman Whipple
as to legal standing of Francis M. Carroll; I did and Whipple endorsed
him highly as did also Homer Albers. I sent letters to Attorney General.
At this luncheon Malone and Tumulty urged appointment of Carroll.
Attorney General said he thought Sullivan should be appointed, especially
in view of action at State Convention.
I sent President and Secretary Bryan (personal interview) my
planks and those adopted by Convention. Bryan said he did not see how
any member of the Administration could help in campaign.
In a long letter I declined to permit Maine Central Railroad to
revert to old practice of entry at Vanceboro, under which entry often
not made until cars had left.
This A. M. met Assistant Secretary Osborne, State Department, and
told him of Massachusetts Convention. He asked why Williams did not
stop it. I said I thought he was not there. I told him Williams wanted
an Ambassadorship. He seemed surprised but favorably so. Said Williams
had come to him to get an interview with Bryan. I told him I thought
it would be good politics to give Williams some office as it would tend
to bring all divergent interests in line; that Williams had attacked me
bitterly as he had the President and Bryan but I did not care and would
forgdt the past in an effort to promote harmony.
At above luncheon Tumulty spoke with contempt of Democratic nominee
for Governor in New Jersey--Fielder, I think. Said he had written urging
Administration to keep out of the fight and that he, Tumulty, had given
him a piece of his mind.
October 7, Wednesday. About 10 P.M. returning to Hotel, found notice to
call up Boston operator. Did so and Judge Riley answered. Be asked whether
Carroll was appointed District Attorney; I told him I did not know but would
ask Attorney General. I then questioned him as to Democratic platform at
Convention Saturday. Be said my proposed planks were not received until
Saturday A.M., but he admitted that they were there in his possession. He
said the proposed specific indorsement of President Wilson was before the
Committee and vigorously objected to because of the proposed appointment
of Billings. He said, however, that the platform did specifically indorse
President Wilson. I said I had all the Sunday papers and not one mentioned
the President's name in the platform; he said the papers must have printed
the original draft of the platform; I asked him to send me a paper containing an indorse-lent of the President in the Platform; he said he would
do so. He also spoke of Andrew Peters having something to do with
platform as finally adopted, also ,Llinicy Peters was a member of the Resolutions Committee.




21

4*Sartil-4(‘'

October 9. At laying of corner stone of Boston City Club. In evening
there was a dinner at Hotel Somerset .ind 1,150 attended, all the dining
rooms being used, Ex President Taft, Geo. Smith and I were the speakers.
After the dinner, Mr. Bailin of NewcBureau asked me to say, to Secretary
McAdoo that Mr. Gaston, President of the National Shawmut Bank had come
out against the Currency Bill and he suggested that Secretary McAdoo send
for Gaston to discuss terms of a compromise; he said he would be glad to
come on with him.
I told this to Secretary McAdoo who was very angry with Gaston and
intimated that the million dollars of Philadelphia fund which he had intended getting the Secretary of War to transfer from Mr. N. P. Hallowell's
Bank in Boston to the Shawmut Bank might never be transferred.
October 1. Have had some trouble with book publishers as to fixing markEt
value of imported books; they insist that the export price to them be
taken as market value--this would be absolutely contrary to law, altho'
it was done in 1877 under Secretary Sherman. The last Administration
fixed up a kind of compromise taking the price act. paid but with a proviso that it should not be more than a certain per cent below the foreign
list price. This also was absolutely illegal. In addition, the last
Administration held that authors' royalties were not part of market value,in absolute violation of a decision of the Bd. G.A.
Under existing practice the book publishers import foreign books unbound, the duty being the same as on bound books, and bind them in this
country. They contend there is no foreign market value abroad for sheets
price should be taken working
unbound and that, therefore, the
however, is paid on
foreign
Rcyalty,
narket
value.
backwards to get
If we took
after
importation.
these sheets except that it is paid
prices in this country--there are none for unbound books. The importers
want us to take the price they pay for the sheets without royalty, althol
royalty is as much a part of the cost as type setting or printing. I
wrote McCrea that price paid is not foreign market value and that we
could not accept it as such. Explained fully that in almost all imports
there is a special export price which cannot be taken as market value. If
it were taken the large importing publisher could get books or sheets at
less rate than the small publisher and the rate of duty would vary.
This afternoon Secretary McAdoo sent in a letter from the President
enclosing a letter from McCrea, and the President said he regarded the
duty on books as a senseless one and hoped something could be done to
mitigate the severity of the law. In the letter of McCrea he said--"Sec.
Hamlin regards only the law and the law is forbidding" or words to that
effect.
••=11••••••MII•

October 15, Wednesdqa Geo. Fred Williams called at office; I saw him at
once; he seemed very pleasant and acted as if there had never been anything between us. I told him that although I felt he had been unjust to
me, I felt no resentment and that I wanted to see the Party united. He
said that his opinion had changed about Wilson as well as about myself




22

and that in a political fight much was said in heat of discussion; that
if I had come to him we could have mapped out a program of action which
both could have agreed on with unanimity and enthusiasm, that he hoped
old sores would be healed and forgotten, that if there was anything in
the world he could do for me in the future I could call on him and he
would respond. He said he originally thought Wilsonwas an ultra-conservative and could see no good in him but now he was lost in admiration of
him as a great leader; that he fully realized that the most valuable men
were those who changed early opinions in light of experience, that he was
one who had so changed and he was free to admit I was another. I told him
I wanted to go to him before my campaign but my advisers were strongly
against it; he said that if I had we would have reached a perfect understanding and that I would have had his loyal support. I told him of
Curley's talk with me and said I told Curley I should raise no objection
to his appointment as a diplomatic officer, that on the contrary I
thought it would be good politics; that I had so stated to Assistant
Secretary Osborne and I had advised the Attorney General to retain him
in an important case.
We were together over half an hour and at his request I took him
in to see Secretary McAdoo. He came back and talked some minutes more:
he said Secretary Bryan had intimated a desire to have him accept some
position and he was to see him this A.M.; that he was to lunch with
Speaker Clark; that he had a Bill on Patent Monopolies he hoped to see
enacted. He also praised Secretary McAdoo highly. He finally left
saying that he hoped we should be good friends again and forget the
past which I willingly reciprocated.
He was very bitter against Governor Foss and said his actions-even when good--were based on no principle and on no morality.
Boston cript
October 22, Tuesday. Mr. Brigham of / Trans/ called. He said the dispatch
In Transcriptother day that McAdoo was to run for Senate and resign and I
was to be appointed in his place, was not sent by him but by another man
who said he got information through Boston to effect that the rumor came
from Albany and started from Colonel Rice and the Pruyn family. I told him
Rice had been abroad for some months and only knew of my appointment by
cable; that the Pruyn family were all dead except Robert Pruyn of Albany;
that no friend of mine would do me the injury to spread such a false rumor.
I told him I should at once speak to the Secretary about it. He said not
to do that but I insisted.
I then told Assistant Secretary Newton all about it; he said he had
traced the original rumor to Kelly of the Boston American who finally admitted it was a hot weather yarn. I then went to the Secretary and told
him all about it and said I should run this down and find what truth there
was in it though I believed it was absolutely false. He was very nice and
begged me to let it drop; he said he fully understood that there was a
concerted plan to discredit him in every way which he believed was




23

was engineered by banking interests and that similar efforts were being
made to bring about an estrangement between himself and Assistant Secretary Williams. I shall never forget how kind and broad he is; he shows
a big mind on a high level. I told him my only ambition was to finish
up my four years and then be elected Governor of Massachusetts, and also
to write a history of our own times modelled after McCart1By's English
history.
Special report of October 21, said G. F. Williams was to be appointed
Minister to Greece but that I was opposed to him. I at once telegraphed
Williams that this report was absolutely and unqualifiedly false and received back a telegram from him that he knew that I had said kind things
about him. I also wrote him to same effect.
Brigham of Transcript also called and I asked him to say as above
and in the evening I called up Associated Press office and dictated an
interview stating same.
October 23, Thursday. Spent all afternoon with Secretary McAdoo and Mr.
Eliot, law advisor of Comptroller of the Currency, going over latest draft
of financial bill and making changes therein. I objected to new clause
authorizing Federal Reserve banks to take out National Bank Votes but
McAdoo wanted this in.
November 1
.2,12nAu. Mr. Arnold, Special Assistant Attorney General to
examine into the Waniliamaker settlement, who has been studying the situation in connection with the Grand Jury, called at house 6:45 p.m. and
gave me a copy of his report. He said the Attorney General asked him
to ask me to read it before he read it and he wished me to talk it over
with him. The report advised a new civil suit to cover additional duties
lost to Government but made no recommendation as to an indictment.
This P.M. wrote letter to Secretary McAdoo outlining my speech
before Canadian Club dinner to which he asked me to go to represent
him. I took position versus any further reciprocity with Canada at
present and went into whole history carefully. I asked the Secretary
to send this to the President to see if he approved. I said Mr. Foster
Acting Prime Minister of Canada was to speak and I felt sure he would
talk of Reciprocity and I wanted specific instructions. The Secretary
wrote President a letter inclosing mine.
a_za. The President telephoned over that he thought it
November .14.2_Tusl_sd.
would be better not to mention Reciprocity so I changed my speech at
last minute and said nothing about it.
At the dinner at the New York Plaza Hotel, Mr. Foster went into
the question just as I feared he would. (See scrap book) But I followed
my instructions and said nothing.
NovenaLlasatdAtEama. Left New York 8:08 am. went over WanVamaker
report carefully. Arrived Washington 2:35 p.m. and found message from




24

Attorney General to come and see him.. Telephoned and made appointment
for 4 P.M. Found Charles Choate and Mr. Winslow of United Shoe Machine
Company there. We had long talk later as to Wantamaker suit. I told
Attorney General that I was satisfied theirs was a carefully prepared
scheme of fraud, that the Government was defrauded, that the examiner
was corrupt, that the Wannamakers had profited by the fraud, and that
in my opinion they must have known of the fraud; that a new civil suit
should be brought for additional duties found due by the report; that as
to an indictment there was probably enough evidence to successfully
meet a motion to dismiss: that as to whether we could prove beyond a
reasonable doubt that John Wannamaker and his sons knowingly conspired
to defraud the Government was another question which I must carefully
consider before reaching a definite conclusion.
The Attorney General said he had had a talk with Mr. Arnold and
would read his report carefully; that he feared it would be impossible
to convict on an indictment because of the fact that the frauds could
not amount to more than a fraction of 1% of the duties annually paid
by Wannamaker to the Government (-I- of 1% as stated in Arnold report)
and that there was no specific evidence referred to in the report showing Wannamakerts guilty knowledge or participation in the conspiracy;
that Wannamaker would probably take the stand and swear that he knew
absolutely nothing of the fraud or that goods for his personal use were
being brought in free in sample packages; that he could show his large
dealings with the customs house and could over that it was all taken
care of by his agent without his knowledge'
-a-a that a jury would probably
find him notguilty unless the proof was most convincing. He finally asked
me to talk it over with him again after he had read the report.
November 15_, S_Elturdazl. Secretary McAdoo asked me to prepare a memorandum
criticizing the new confidential draft of financial bill making the reserve
notes legal tender and providing for redemption of National Bank notes
by issuing legal tender Treasury gold notes.
November 16 Sunday.
. Prepared memorandum and sent it to Secretary who
later called me on telephone and asked me to come to his house in evening
to a conference a4)-4Ttereivatmse. at 8:30. Went there and found Senators
Owen, Hollis, Pomerine and Shafroth. The Secretary strongly opposed the
legal tender plan also the clause allowing member banks to hold reserve
notes in their reserves. Senator Owen said he had just left the President
who said that while he was not prepared to combat the legal tender idea.
He thought at this time for technical reasons it was inopportune; that when
the bill was enacted this could be considered as a second step. Senator
Owen said he would be guided by the wishes of the President as did all,
except possibly Senator Pomerine; he said also the President said he would
not object to allowing trust companies and state banks to continue to
hold National Bank notes in their reserves.
Mr. McAdoo asked me what I thought of the legal tender idea and I
said that if you accepted the idea as to greenbacks it would logically
follow you should accept it as to all other similar notes, such as




25
proposed new gold notes to redeem National Bank notes, silver certificates,
gold certificates etc.; that I feared making the Federal Reserve notes
legal tender would prevent the speedy redemption of the new Act sought
to secure--see my letters to Secretary--; that I thought the National
Bank notes at times were redundant and that the new gold notes would be
as fixed as the National Bank notes and no contractor would be possible.
Senator Owens denied any redundancy in National Bank notes--this was in
answer to my statement that as his plan in the draft called for 100V in
gold behind each gold note, it would be better to use the gold to cancel
the National Bank notes outright; finally, I said that if the Republicans
fought the legal tender idea the mere publication of the proposal might
precipitate a financial panic, no matter how logical the plan was and that
if I were a speculator I would sell everything before such announcement.
This seemed to influence all them, especially Senator Owen and it was
agreed he should sound the Republicans on the Committee.
Senator Shafroth said in the West it was very difficult to get legal
an option and he impressed me with the
tender, e.g. to offer to
making
certificates
and gold certificates at least
of
necessity
silver
having
the Federal Reserve notes redeemlegal tender. Finally, he suggested
able by the Banks inlawful money but by the Treasury in Gold.
I asked him if he would agree to have the Act changed so that the Banks
must recoup the Treasury in gold if the Treasury pays gold in redeeming
these notes. He said yes and Secretary McAdoo and I said we would not
object to this change on above understanding.
Eoztml2_91112.2_.LIon,dayz
. Mr. Arnold, Special Assistant to Attorney General
in Wannamaker case, called by appdntmeLt and went over the criminal phases
of the suit. Be has no doubt of the personal guilt of the Wannamakers
but realizes that it will be very difficult and perhaps impossible to convict them, although he is sure the evidence is such that a motion to dismiss after the Government evidence is in, could not be sustained. He has
not yet reached a conclusion as to whether to advise a criminal prosecutor
or not.
He told me he wished to say something to me in absolute confidence; I
did not wish to hear anything I could not freely tell the Attorney
said
General. '
J te agreed to this and then said that Mr. Wise, Wannamakerts
counsel, lately had said to him that he could not hope to secure any preferment from this Administration, that he, Wise, could have secured a fine
office for him, that John Wannamaker had said to him that a hell hound like
Arnold would be of great use to him in his business and that he would be
glad to give him a large retainer. Arnold said he hated to have to tell
me this as he believed Wise was an absolutely honest man.
Either Saturday or Friday a Mr. Alexander of Trenton, New Jersey, I
think a newspaper man, called on me and talked much about the Wannamaker
case; he said he disliked him and had reason for it but he knew, with al]
his faults, he was not the kind of man to defraud the Government of duties.
He also said he had great power through the press and would make a terrible
fight if attacked. I am satisfied he was sent to try to intimidate me.




26
ANoveOjmjat_algamz, Arnold and I were with the Attorney General from
2:30 to 5 on Wannamaker case; we sent over the principal features with
great care. The Attorney General asked many questions and had evidently
read the report carefully. He said it appeared evident that a scheme
for defrauding the Government had been devised and successfully put
through and that it was clear the examiner had been corruptly passing
dutiable goods as free or at reduced values; that before deciding whether
;as jury should be asked to indict the Wannamakers, he wanted to
the
be sure that the evidence secured or which could be secured would be
sufficient to convict; he seemed absolutely fair and impartial and to
desire simply to get at the truth of the matter; he said it was a heavy
responsibility Si. that he wished to take 055ction not warranted by the
evidence; he seemed to have some doubt as to whether conviction could be
had--reqng proof beyond a reasonable doubt—considering that there was
absolutely no evidence causliz.•implicating any of the Wannamakers Si. he
felt that the most careful study of the report should be made before
definitely deciding gs to what course to pursue. Arnold said if indictment
was brought it should contain conspiracy counts as well as direct charges
of importing by false practices, etc., under Section 9 Adm. Act and
other Statutes; said the conspiracy counts he did not much rely on except
ny way of admission of evidence; that it was vitally important to get
at the books of foreign houses who sold the personal goods to the Wannamakers and that their deposons should be taken. The Attorney General
reminded him that in a criminal case such depositionscould not be taken
but witnesses would have to be brought from Europe and that it might be
very dcult to secure such witnesses as foreign firms would not willingly
testify against such a good customer as the Wannamakers. Arnold said he
thought our Government could persuade the French Government to induce these
firms to testify and that the French Government under French law examined
books of French firms regularly. Arnold did not know whether the French
Government had power to order any French firm to produce their books.
Arnold also said if he could not prove by the firm's accounts just what
they sold the Wannamakers and the prices, etc., the indictment would probably fail; he said he would consider this over night and report in the
morning. Arnold also said he had made no definite recommendations in his
report but merely stated facts, law, etc. as he wished to keep his mind
open until the whole matter could be gone over with tesrne General;
that although he felt certain the facts would safely carry the Government by a
motion to dismiss yet he had not reached the conclusion that the Government
was even reasonably certain to be able to secure a conviction by proof
beyond a reasonable doubt; that in this matter he still kept an open
mind without reaching any conclusion. We finally. adjourned at about 5:30
P.14
I remaine4 after him a few minutes and the Attorney General asked me
how I looked in it. I told him that I had gone over the report and made
some notes; that it was one of the ablest reports I had ever read, but
that to really master it would require may days--perhaps a week's careful
study, which, in view of heavy Treasury work, I could not possibly give to
it; that I was satisfied of the corruption of the examiner or at least of
his such utter neglect of his duties as to raise almost irresistably a
strong belief in his corruption; that there was clear evidence of a carefully planned scheme to get these goods in without paying duties; that it




27

was almost impossible to believe that the beneficiaries did not have
knowledge of it, but that it was conceivable though not probable that
they may not have had such knowledge; that there was, however, no direct
evidence to prove such knowledge or any overt act and that a conviction
if secured would be based on the fact of the long continuance of the
practice rather than on any one case under it; that I had no special
knowledge of criminal law; that if to bring an indictment or ask the
jury for one, it would be necessary to believe that the evidence was
strong enough to prove beyond a reasonable doubt the guilt, I at that
time, based on the necessarily short time allowed for examination of
the report, felt I could not say that we could feel even reasonably
certain of his duty to press the matter; but that if the only inquiry
was whether the evidence at hand raised a strong suspicion of guilty
knowledge or practices, my opinion when verified by further study of
the report, might be different; that in my present study I certainly
could not advise him not to press the matter nor could I advise him to
go ahead. I then said that if I were Attorney General, I should feel
disposed to ask some able lawyer, well versed in criminal law and also
customs law, to read the report carefully and give his opinion as to
what it showed.
With Attorney-General again, who again
November_15_,112122222a212.M.
of getting at the French books.
possibility
discussed with Arnold the
would
like to have some able member
Finally, the Attorney General said he
of the bar go over the report and one with a knowledge of customs and
criminal law and get his opinion; he said he wanted some man of such
standing and ability as would commend itself to all our men; he asked
me if I knew of any such man and I said the best man I could think of was
Wallace MacFarlane of New York. Be asked Arnold if he would object to
such a course and he said it would be most agreeable to him as he had
been so wrapped up in the details of the case that it would be helpful
to have some bright, keen mind go over his report. The Attorney General
then asked me if I would ask MacFarlane to come dawn and see him and I
said I would.
Going over the case again Arnold said that in spite of his feeling
as to the guilt of the Wannamakers, yet he felt hound to say that on the
question of being able to prove it beyond a reasonable doubt, the chances
were four to one against success.
The evening papers say that the Democratic members of the Senate
Finance Committee adopted Senator Shafrothts suggestions, approved by
me, of making the Federal Reserve notes reddemable by the Reserve Banks
in gold in lawful money, but by the Treasury in gold on if demanded.
November 20, Thursdaz. Went over Wannamakerts case with Secretary McAdoo;
he asked me as to salient features of the report and he felt that an indictment should be brought; he said it would be ridiculous to indict the
examiners and to let the men higher up go free; that the mere fact that
we might not be able to prove the case beyond a reasonable doubt was no




28

reason for not prosecuting as there was enough evidence to raise a very
strong suspicion, even a moral conviction of guilt; that the fact that
the evidence was purely circumstantial was no reason for hesitation as
this was usually the case even in murder trials. I advised him to see
the Attorney General at once and he said he would: I also advised him
not to send for MacFarlane until he had seen the Attorney General.
November 20. The General Appraiser at New York, McClelland, has ruled
that where books are imported in sheets unbound and sold bound in U.S.
and the royalty is payable in the U.S. on each bound book when and only
if sold, the Royalty is not a part of the foreign market value of the
imported sheets. The decision was dated Nov. 16, so we have 10 days in
which to appeal. I told Secretary McAdoo about it and urged him to call
it to the President's attention so that he could direct us whether to
appeal to Board of
He said he would do this and
noted the fact that the appeal must be claimed on November 22 as last
day. Went went over it fully and I said ordinarily in a question of
this importance I should take an appeal but that the decision set at
rest a long continued controversy and if the President did not want an
appeal taken, I felt we could safely acquiesce.
November 18 Monday. Ex-Assistant Secretary Curtis called and asked me
to let in Mrs. Van Allen Thompkins effect free as he understood my decision to levy duty was only a temporary ruling: he also had sent a brief
attacking decision of Court of Customs Appeals in the Bache case, somewhat similar. I told him I should not change my decision and he asked
If he could go to the Secretary and ask him to overrule me. I said I
had absolutely no objection to such action on his part and he went in and
talked with him. The Secretary said he would look into the matter personally.
November
.211 Frideg. Had talk with Secretary McAdoo as to Wannamaker case;
he said he had talked the matter over with the President and that the President felt that if the evidence secured made out a strong prima facie case
the indictment should be pressed, and he asked me to say this to the Attorney General tomorrow at the conference, 2 P.M., and he added that on the
facts shown, if Attorney General should decide not to push the matter it
would give rise to a worse scandal than the Camanetti case.
November 20, Thursday evening. Dined with Mr. and Mrs. Henry White: Present
Lady Spring Rice, Judge and Mrs. O.W. Holmes, Judge and Mrs. Pitney, Sir
Admiral O'Neil, Assistant Secretary and Mrs. Franklin Roosevelt, Miss Delano,
C.S.H. and H.P.H.
November 22, Saturday. 3 P.M. conference between Attorney General, Mr.
Arnold and myself at Attorney General's office. Mr. Wise, Attorney, and
john Wannamaker appeared. Attorney General told them he would be glad to
receive any explanation they could give of the passing free of duty of
dutiable merchandise at Philadelphia. Wise spoke for a few minutes, said
there was no fraud and no concealment, that the Government had notice on
each
invoice that there were packages marked samples whose value
was not extended; that the Government examiner passed these packages as




29
free being of no commercial value; that the Government was thus responsible for failure to receive duties lawfully due; in reply to Attorney
General he said it was hard to believe that examiner was not corrupt;
that this theory, however, was largely negatived by fact that in many
cases the examiner's notes on invoice showed the presence of dutiable
goods in the package and yet he passed them free; that this was imcomprehensible; he later, however, said that it looked certainly like corruption; he could give no explanation. Then John Wannamaker spoke and denied
that there was any knowledge in his part that any dutiable goods were ever
admitted free; said he never had even seen the examiner, Bierly; that he
assumed his employees charged with duty of passing goods through the customs house had paid all duties due; that he never had anything to do with
paying duties or accounting for goods received. Then Arnold pointed out
to him that the previous settlement was based on the order slips and that
he or his firm had concealed fact that large amounts of goods had been
brought in free charged to personal account of himself, Rodman, W, & T. W.
He positively denied these were for himself; Arnold cited specific instances,
e.g., books of engravings of Rembrandt pictures; he denied ever having ordered
any such books; Arnold said they were receipted for by his secretary in his
own office; he denied this and said he had imported nothing for his own
use; that these must have been for the firm; he pointed out that in his case
the packages were only about one each month and said he did not and could
not know anything about them. We thought he would be very much surprised
at the discovery of personal packages but he evidently knew all about them
as did also Wise; he said also that if indicted it would probably ruin
his credit and force him into bankruptcy and would cause suffering to the
14,000 employees of the firm; he said he was not a rich man: Arnold then
said something about his property amounting to 15 millions and he said he
had taken out a mortgage for 10 millions. Be absolutely denied that the
items in the sample case receipt book were for his personal account.
Then Rodman Wannamaker came into room: he told how the Paris business was conducted; said that orders were issued to put no packages into
the merchandise cases to avoid any possibility of fraud; said that all
packages were put in cases by Thuillew, who is now insane; that Thuillew
had whole charge of this matter; that he had never paid personally for
any of his purchases; that they were paid by Paris office; that they were
charged to his account and later these charges were 0-K.'d by him: that
he knew nothini,- as to what his goods paid duty and could not know; that
he made no entil'es but assumed that all duties were paid, etc. He admitted
that there was deplorable looseness in methods of accounting but he knew
nothing of it until told by Wise. Wise said the same system was in force
today, showing there was no fraudulent intent. Arnold denied this.
Finally it was suggested that they give us detailed information as to
the value of the merchandise charged to personal account and they said they
would.
Z. Wannamaker said he had heard that examiner might have been overawed by his political influence but that he had never directly or indi74actly
Influenced any appointments; tat Senator quaty and he were bitter enemies.
They were pressed again and again but would give no explanation of
the frauds save as above.




After they had gone--about 6:45 P.U.--the Attorney General said he

30

did not see how an indictment could possibly be sustained, at least
as against 3. Wannamaker. I asked if the facts did not show at least
a prima facie case of fraud and the Attorney General said he thought
not; Arnold differed decidedly as to this, and I said, without having
formed a definite opinion, it seamed to me, taking all the facts, including the presents to Bartsauft, Appar, and the insurance policy, a prima
facie case might be said to have been made out, that certainly I would
not now say it had not been made out. I said I could not resist the conclusion that this must have been known to the firm or at least to R. Wannamaker; that the case against J. Wannamaker was certainly much weaker than
against R. Wannamaker, that it was at least conceivable that the sons
may have carried out the scheme without the knowledge of the father,
altho I admitted this was hardly likely. Arnold did not agree to this
althol Attorney General did. I also expressed opinion that Bierly must
have been bribed with money; Arnold did not agree to this but thought
Bierly might have been directed by the Appraiser Bartrauft to do as he
did and he added that he believed Bartrauftt successor, Vincent, was
crooked but this could not be proved
.
.
The Attorney General then asked as to the Statute of Limitations and
Arnold said he was satisfied that we had at least two months yet before
the conspiracy charge would be outlawed, and the Attnorney General asked
him to let him know definitely as to this.
There was much talk about the fact that Wannamaker produced his
books very reluctantly and this was vehemently denied by Wise and Z.
Wannamaker and asseverated by Arnold. The destruction of letter was
also talked about and other records and to my mind no very satisfactory
explanationwas given, especially as to Paris letters: they all denied
that it was against the French code to distroy all letters after a year.
Finally, Z. Wannamaker said all books were at Attorney General's disposal
and I understood him to say that he would produce all accounts of French
firms who sold these alleged personal goods to the Wannamaker's in Paris.
Z. Wannamaker absolutely denied that his private office had receipted
for any of these personal goods. During the talk as to production of
bills of French firms, Wise asked in reply to question of Arnold whether
he would agree to appointment of a committee to take testimony abroad,-do you want this for the indictment or for some further payment of duties?
I do not remember Arnold's reply to this. Wise also said if any further
duties were found due, they would be paid--even if it amounted to $100,000
more. This was the first suggestion made as to further payments.
R. Wannamaker said frankly that the fact that some 740 odd parcels
were imported charged to his personal account were passed free altho
contianing dutiable merchandise looked bad, and that evidently they had
been put in a false position by Thuillier and by the examiner, but that
he was absolutely innocent of any intent to defraud or any knowledge of
fraud: he said his personal expenses amounted to over $200,000 per year
and that he kept no accounts, everything being settled for him by the
Paris and U.S. offices.




31
Arnold walked home with me and I asked him to prepare a short concise statement as to the proof to show a prima facie case and he said
he would do this.
November 22, evening. Dined with Adm. Sutherland: Present, Senator and
Mr. Weeks, Mrs. Spencer, Capt. of Austria, Miss Mackay Smith, Mr. & Mrs.
Moore, et als.
November 22, Saturday. Signed letter to Collector of Customs of Vermont
ordering him to collect duty due from Central Vermont and Grand Trunk
Railroads for repairs made in Canada to engines, etc. used wholly in
domestic trade in 'U.S. Ruled also that engines and cars engaged in
interstate trade were not dutiable and could be repaired in Canada
without being subject to duties.
Last week I ordered practice resumed of putting an inspector on
evening train of Great Northern Railroad running between Winnipeg and
Noyes, at urgent request of Senator McCumber who said examination at
Noyes made great delay at
and C.P.R. was adverting that their trains
were running thro9 on time.
Some time ago we discontinued putting
inspectors on trains: all the railroads objected but finally all but
the Great Northern agreed to the discontinuance as no great delays were
shown in practice after inspectors were taken off. The Great Northern
has much more passenger traffic than the other railroads and therefore,
the delay is greater.
The Customs Division prepared a letter just after the discontinuance,
which I signed, to Senator McCumber I think, saying if discontimmapashowed
delays the practice would be resumed. Senator McCumber came to see me
several times and I assured him the promise in the letter, which I did
not originate, would he kept. I felt that as long as inspectors were
on Canadian trains in East the same facilities should be accorded trains,
and especially American trains in competition with Canadian trains in
Northwest. The Great Northern, however, was told that this was a temporary order, pending full investigation of the question all along border.
I would like to see all inspectors taken off, if possible, but if not
all railroads should be given equal facilities.
November Q. A day or two ago the chiefs were directed to certify to
Secretary of Treasury those clerks, etc., who were below a fair standard
of efficiency and Halstead of the Customs Division certified the names
of Johnson and Makee. I talked it over with him and he said he felt
It was his duty to do this as Makee could not do a real days work and
much of his work had to be done over again. I sent for Makee to talk
it over with him but he had gone and as the Secretary said he must have
the report that evening I checked it.
The next morning Makee came down,--his son-in-law, Twokey, the
papers announced had just committed suicide in Canada--and I explained
the matter to him telling him the reason for sending the report to
Congress was to secure some pension or retiring legislation. I told
him not to worry as 1 was his friend and he seemed much relieved.




1

32

Lunched at country club with Senator Wetmore. Present the
Misses Wetmore with Spanish Minister and wife, General and Mrs.
Cozier, etc., etc.
November 25, Tuesday.
Mr. Cooksey, Secretary McAdoo's secretary, told
me today that the Chief Clerk took up the matter with the Secretary and
he decided not to report Makee or Rose of the Appointment Division, as
the latter was of great help to Secretary as to old practices, forms, etc.
I told Cooksey, Maher had also been of great help to me. I had nothing
to do with this but was delighted with the action of the Secretary.
Last week Claude Bennett telegraphed me to try to secure his appointment as counsel of the Canadian Pacific Railroad in place of Twokey; this
morning I wrote him that as the Canadian Pacific Railroad had business at
times with the Department, I could not directly or indirectly recommend
anyone for such appointment, and I said the same to Miss Graeves, Bennet's
secretary who called on me this A.M.
November 24, Monday. Lunched with Attorney General who asked me about
Charles Warren as a possible Assistant Attorney General. I praised him
in highest terms and asked him to write Mr. Storey and Mr. Olney who
would confirm what I said and would tell of his high standing at the
Bar better than I could.
The Attorney General also talked over the Wannamaker case and expressed
the view that there was not enough evidence to indict him but said he had
not formed yet a positive opinion. I urged him to appoint Arnold of New
York as Assistant Attorney General in charge of customs before Board of
General Appraisers. He said Secretary McAdoo was strongly and really
offensively urging him to appoint Gibboney but that he knew he was not
fit for the place and positively would .not appoint him. I have the same
opinion of him, but out of loyalty to McAdoo, of course, said nothing.
Ij]Nor12
.2
.
"21tella. Some days ago I ordered Customs Division to refuse
to bond Canadian Northwestern Railroad for carrying dutiable baggage from
Montreal to places in United States and also ordered the bond allowed
Quebec Central Railroad to be cancelled.
Claude Bennett called this A.M. and wanted me to recommend him to
the Canadian Pacific Railroad and Boston and Maine as counsel. I told him
I must absolutely decline to recommend him or anyone else as these railroads
at times had business at the Department. Be was very persistent and I
had to deal with him almost sharply. I told him it would be as improper
as for a Judge to recommend counsel, and that under no circumstances would
I do so.
November 30,_ Sunday. Rode to Baltimore and thence to Brooklandville and
lunched with Charlie McLane. Dr. and Mrs. Randolph took supper with us.
December _1, Monday. Wheatley, Estabrook and I had meeting at which a Mr.
and his Attorney, Mr.
were present and set forth a plan
they had discovered for defrauding the customs revenue by Mr. Brewer in
New York. The fraud consisted in shipping imported beer within certain
barrels containing 1.ess than regular quantity: these barrels were chosen




33
for examination by guagers in collusion with importers by putting a
label very near the bung-hole so the guagers could know just what barrels
to mark for examination and then the whole importation was assessed for
duty on basis of the short barrels. They showed us checks given to
guagers as regular pay for the fraud. Wheatley advised laying matter
before District Attorney who would ask for court order to produce the
books of the corporations suspected and the books could be taken by the
Special Agents. They said they had seen also a set of false or private
invoices showing that the customs invoices were false as to quantity
shipped. I had a talk with the Secretary and he authorized Wheatley to
on the
go ahead and Wheatley went to New York first putting
roll as a customs inspector. They said the total frauds, assuming the
other beer importers were also in collusion and they stated evidence
as to some of these, would amount to nearly a millon dollars per year
of duties withheld, not counting penalties.
Evening. Gave dinner: present, Sec. McAdoo, Attorney General McReynolds,
Lord Campden of British Legation, Gongressman Peters, Assistant Secretary
Roosevelt, Mr. Willert of London Times; also Miss Maude Wetmore, Miss Myer,
Mrs. Dexter of Boston, Mrs. Peters, Mrs. Roosevelt and Mrs. Willert.

Tuesd.

8:45 A.M. Howard Elliott of New York, New Have:land
Hartford Railroad called me ontelephone; said he was to see Attorney
General this P.M. and wanted to see me and asked if I could see him for a
minute. I told him to come up to my house. He came up and said he
wanted to talk over the New England Railroad situation. He showed me a
letter from President Hadley of Yale to President Wilson asking him to
give more time to the railroad directors to work out the railroad problems
before bringing suit; he said the Attorney General wished to have the
Fitchburg railroad lease annulled, among other things: he said this would
require action from Massahusetts legislature and that Rhode Island and
Connecticut did not want the system split up. BB made no request of me
to do anything but I gathered that he might intend to ask me to speak to
the Attorney General about the matter, so I anticipated anything he might
have said by saying that this was a matter he must work out personally with
the Attorney General: that I had et very high opinion of his high character
and purpose and his scrupulous regard for every interest. He said he
thought he might speak to Secretary Houston: I told him I thought that
would be injurious rather than helpful. He said he had talked with Secretary Lane. He said a suit now might necessitate a receivership for the
whole system and entail great loss to innocent investors. I told him there
was certainly a feeling here that the directors were not going forward with
proper speed in doing voluntarily what would be done by a suit and that
very likely the Attorney General felt this. I said the only advice I
could give him would be to go frankly to Mr. Brandeis and ask his advice
and cooperation in working out the problem and that althot I never had
spoken to him on the subject I felt sure that if approached in good faith
he would meet him half way and help him in any proper way.




314.

of Elliott's
At5 P.M. took drive with Attorney General and told him
my suggestion
call and what I said to him: he seemed to agree as to
ent of an
as to Brandeis. Be had asked me to drive to talk over appointm
Board of
Assistant Attorney General in charge of customs cases before
and he told
y
McAdoo
Secretar
to
spoke
I
General Appraisers at New York.
eous with
discourt
almost
and
sharp
me the Attorney General had been very
position;
the
for
Gibboney
oYMr.
him in turning down his recommendation
Treasury
the
if
McAdoo,
y
Secretar
that he wished I would tell him that he,
Attorney
the
by
directly
was to be consulted, would prefer to be consulted
t. During
General as the appointment was a New York one and very importan
Gibboney
pressed
had
the drive the Attorney General said Secretary McAdoo
he was
that
found
and
on him almost offensively; that he had looked him up
even
loudly
talked
a hard drinker, and a reckless, laud mouth man; that he
ip
friendhs
his
in barber shops of his practice and that he had traded on
row
's
Gibboney
with Secretary McAdoo in his law business; he had heard of
with Tea Examiner Mitchell and said that he never would appoint him.
Secretary McAdoo told me that the President and he wanted Gibboney to
have the appointment and that the President had so written the Attorney
a personal
General. I told the Attorney General that Secretary McAdoo took
Attorney
The
him.
consult
should
he
that
interest in this appointment and
of the
charge
(in
Arnold
appoint
not
General had previously told me he could
prehe
and
good
very
not
was
Wannamaker case) as he thought his judgment
ferred a Democrat.
December 2, Tuesday. In evening dined with Mr. end Mrs. Henry George:
present, Mr. Graham, Congressman from Illinois, Mr. Siddens, Commissioner
of the District, Mr. Cohen, Miss George, et al.
Evening. Dined with Mrs. Bayard: Present, Adm.
December 3,Wednesda
, Mr. end Mrs. Matthews, Mr. and Mrs. Tuckerman,
Randolph
Stanton, Dr. and Mrs.
Professor Swisher, Commissioner of Patents and Mrs. Ewing, Mrs. Baucott
Windrie, Mrs. Biddle, Adm. O'Neill, etc.
December Aj Thursday.

Dined with Mr. and Mrs. Tom. Thacher.

Decembez_iLEELla:. Attended Musicale at White House.
December 6, Saturday. Dined with Commissioner of Patents and Mrs. Ewing
to meet Secretary Lane and wife. Present: General and Mrs. Mills; Adm.
Mrs.
and Mrs. Davenport; Mr. and Mrs. Bulter (Rep. Supreme Court), Sec. and
Lane.
Signed letter denying application of Canadian Northwestern Railroad
to be bonded for carrying baggage from Montreal to points in United States
as no authority in law to accept such a bond. Also discontinued bond
heretofore granted to Quebec Central Railroad in unpublished decision
for same reason.
New York Tribune published charge that Assistant Secretary Williams
impooperly helped Munsey secure United States Trust Company and that his




35
brother was a director of Munsey Company.
RcAdoo denies this (See scrap book). Told me lest night walking
home that Ailes of Riggs National Bank was at bottom of this: that Ailes
received $9,000 per year frum National City Bank, New York, to represent
them, in addition to his regular salary: that the Riggs Bank had made
loans to Treasury employees O.K.'d by Ailes: that he had had a stormy
interview with Glover and Ailes and had intimated to them that if any
more attacks emanated from them he might withdraw the Government deposits
from their Bank.
Telephoned Brandeis at Hotel Gordlan to see Attorney General as to
Charles Warren.

C

LesisEllszaljunday. Representative Ten Eyck of Albany and Mrs. Ten Eyck
took supper with us.
December 8t Monday. Assistant Secretary Williams and wife dined with us
and took us to threatre.
.......Decerizz
. Arnold called and gave me memorandum to show john
Wannamaker knew his personal goods were being imported without invoices
in violation of law. Be had appointment with Attorney General at 2 P.M.
I said I should not attend unless he asked me, but I did not hear from
him. Be said he had no doubt but that J. Wannamaker knew of the illegal
practice.
December . Dined with Miss Squire; present, General Reibler, Mr. and
Mrs. Goff, Mr. and Mrs. Harlan, etc.
1:NLL Dined with Mrs. Beale, present: Mr. and Mrs.
as
.miss2s_12.
Roosevelt, Mr. Gillet, Miss Myer, Mr. Willer and Mr. Chandler.
.1aLlty_t_ Went to New York as guest of W. B. Howell at dinner
122
.22111
of Board of General Appraisers at Sherry's. Returned on midnight train.
'Mrs. diad Dr. Randolph gave a tea for Bertie; Mrs. Bayard, Miss Riggs, et als
poured; among the guests was Lady $iwaley Rice, wife of British Ambassador.

Wn
‘

as24EID21,11A.L.IRREILL._
dined with us.

Mr. and Mrs. Otley of Belgium and Mr. Frank Dorr

December 15J Monday. Ordered an inspector to go from Winnipeg to Noyes
that otherwise
on extra night train on Northern Pacific Railroad
traffic would be turned to Canadian Pacific Railroad. Did this at the
request of Senator McCumber.
Also ordered the same regulations for inspection at Lowelltown, Maine,
as were adopted at Vanceboro. No merchandise to be examined until entry
made, etc.
December 16, Tuesday., Dined with Mrs. Sheridan: Present Colonel McGonigle,
Mr. Gillette, General and Mrs. Crozier, Secretary of War and Mrs. Garrison,
Mr. Ricartain, Miss Sheridan, etc.

(




36
Sent to Secretary State a letter signed by SecDecember 17 Thursday.
retary McAdoo asking State Department if the President has issued any
proclamation exempting Russia from discriminating duty of 10% under Act
1913 and previous acts. The Russian Consul at Chicago officially asked
Collector whether this duty was being assessed. I told Secretary McAdoo
the discriminating duty was clearly applicable, because the Russian Treaty
was at an end, unless the President had exempted Russia under Section
Revenue Statutes; that I had seen inquiries in newspapers as to this; that
in my opinion the matters would sooner or later be inquired into by Congress;
that he must either put the burden on State Department of advising us or
he would have to assume responsibility of not assessing the duty; he accordingly signed the letter and until officially advised by State Department we
cannot assess the duty.
Dined at French Embassy: Present, Secretary and Mrs. Bryan, Secretary
and Mrs. Redfield, Senator Bacon, Tapanese Ambassador, Lady Sherry Rice,
Brazilian Ambassador and wife; Costa Rican Ambassador and wife; Henry White,
frytw
etc. etc.
December 18, Thursday. Mr. Nash, Naval officer at Boston, called yesterday
and again this A.M. While here he said he wanted to know if he could
accept a pass which might be sent him by Boston and Maine Railroad of
which he had been counsel for some years. I told him certainly not and
that in my opinion, he could not consistently remain counsel of any railroad
or other corporation or individual, directly or indirectly, having to do
with customs. I added that a new regulation would shortly be issued on
this subject and advised him to resign as Attorney. He said he would do
this at once. I then directed a regulation to be itamed covering this
whole question.
At 4 P.M., Mr. Wise, Attorney for Wannamaker, called and stayed until
6:15. Before he came, Mr. Arnold of New York, called me up to know when
I would be ready to reach a conclusion on the Wannamaker case. I said I
had not been able to go over the matter but hoped to very soon.
Wise went over case, said that Wannamaker's innocence was shown by fact
that for a long time while investigation was in progress he had not even
had a lawyer , his own being away; that when the settlement was made and
his books returned to him, he could have destroyed them but that he did
not but kept them intact; that for over a year he was watched by Special
Agents, etc. but nothing even suspicious was found by them. BB said also
that it might well be that Tom Wannamaker had contrived this scheme unknown to his brother and Father: That Tom, now dead, was in charge of the
Paris business when it originated.
He told me that Attorney-General told him he had directed the whole
matter to me (CSH); I said this was not so, that while the Attorney General
had asked me to over the matter with him, the responsibility was on him
and that while I should try to be helpful in explaining the records as
shown by Arnold's report, I was not at all sure I would make any definite
expression of opinion. I said the case is not whether case should be submitted to Grand Jury, that had been done, but whether it should be withdrawn or abondoned--a very different matter. I asked him whether ordinarily
a District Attorney let fury know his opinion as to whether Bill should be
found: he said in 99 cases out of 100, yes, althol indirectly; any such
direct action would be illegal.



37
I then asked him how a jury should decide as to finding a true Bill;
he said the question was not whether the case was proved beyond a reasonable doubt but whether the Jury felt satisfied that a crime had been committed and that the evidence pointed towards guilt of suspected person.
I then asked what the relief he sought was and he said a statement
to the Jury that the Government was satisfied no Bill should be found. I
asked if Wannamaker had asked to be allowed to go before Grand Jury and
he said if Attorney General decided not to withdraw the matter he should
ask that privilege. I then asked him if it would be legally possible to
present the evidence to the Grand Jury and allow Wannamaker and Rodman
Wannamaker to appear before it and permit the Jury on their oaths to
consider the matter free from any attempt to influence their decision.
Be said such a course as to the evidence, was the only legal course, but
that in practice the Jury were made to know indirectly just what District
Attorney wanted; that it was the easiest thing in the world for a District
Attorney to procure or defeat a Bill. I thought he seemed to act as if
the middle course above indicated was about all he hoped to secure.
I told him there were facts stated in Arnolds report which certainly
seemed to call unquestionably for careful explanation and I asked him
practically in so many words if he did not think that the Wannamakers
would be treated justly by permitting them to go before the Jury and be
cross examined and then allow the Jury to consider the whole evidence as
applied to the law without any attempt to influence their honest judgment
by the District Attorney. He did not answer this directly but I certainly
gathered from his manner that he hardly hoped for anything different.
Finally, I said I would go over the matter with Secretary McAdoo and he
left asking me to let him know when and if the Treasury made any recommendation to the Attorney General and I said I would submit this request to
the Secretary, McAdoo.
Walked home with Secretary McAdoo and went over above with him: he
was quite indignant at Wise's statement that Attorney General said he
had dumped case over onto us: at first he said he would decline