"Memorial to Congress to remove the charge of desertion from George Schwartz, late private of Company F, Fifth Regiment Wisconsin Infantry Volunteers. "To the honorable the Senate and House of Representatives of the United States in Congress assembled: "The memorial of the legislature of the State of Wisconsin respectfully represents: "That in the opinion of this legislature, founded upon the evidence presented, and which is herewith transmitted, the charge of desertion,' which now rests upon the above-named George Schwartz on the record in the office of the Adjutant-General of the United States, should be removed; and that as, from the peculiar circumstances of the case, it is impossible to prove the death of said George Schwartz in the manner prescribed by the Adjutant-General of the United States, therefore your memorialists respectfully ask for the passage of a special act of Congress removing the charge of 'desertion' now resting upon the good name and reputation of said George Schwartz, and ordering that the military record of said George Schwartz, in the office of the Adjutant-General of the United States, shall be so altered that it will appear of record in that office that he died in the line of his duty, and in the military service of the United States. "Approved February 26, 1874." Very respectfully, your obedient servant, Hon. MATT. H. CARPENTER, United States Senator, Washington, D. C. W. R. TAYLOR Governor After a careful examination of the papers presented, your committee are of the opinion that the relief asked should be accorded, and, therefore, report the accompanying bill and recommend its passage. The Committee on Claims, to whom was referred the petition of James P. Gillespie, praying payment to him of $26,545.33, alleged to be due him as informer in a case of violation of the internal-revenue laws, having considered the same, submit the following report: Petitioner represents that in the month of June, 1865, he gave to Shelby Taylor, collector of the fifth district of Ohio, "information of evidences of fraud " upon the revenue on the part of one Bernard Esch, "which had come to his knowledge from a series of watching and observations, on his part, which led the said collector to make seizure of sundry lots of distilled spirits;" 465 barrels in all. Esch was indicted, but, pending the proceedings in court, the case was compromised, the Government receiving $53,096.67, of which Dr. Gillespie claims he is by law entitled to one-half; he states that "he expended large sums of money and much time" in the detection of these frauds, and that "he has never been, in any degree, re-imbursed for his expenses or paid for his labor," as his claim has been disallowed by the Secretary of the Treasury, and he now appeals to Congress for relief. As giving a full statement of the case, we append hereto and make a part of this report a letter of B. J. Sweet, Acting Commissioner of Iuternal Revenue, in reply to an application for information in the case. It will be observed that in addition to the 465 barrels, in Ohio, there was also a seizure of about 400 barrels in New York, which lot was forfeited, and of the proceeds the Treasury received one-half and Dr. Gillespie the other, viz: $20,615.01, from which fact we infer that any expenses incurred by him in the discoveries which led to the seizure of the whisky in New York, and the discoveries themselves, were separate and distinct from those which brought about the seizure of the whisky in Ohio. As for the latter, "he has never been in any degree re-imbursed." A showing the grounds upon which this claim was rejected by the Secretary of the Treasury, we insert in the report the following letter from that officer: TREASURY DEPARTMENT, Washington, D. C., April 2, 1874. SIR: The pressure of business has delayed an answer to your letter of the 4th ultimo, transmitting papers in the case of James P. Gillespie, and asking such information as this office affords, together with my opinion as to the justice and legality of the claim. The facts would seem to be fully stated in the letters of the Commissioner of Internal Revenue which accompany your communication. They are essentially as follows: Certain property belonging to one Bernard Esch having been libeled for forfeiture, the Department accepted a large sum in satisfaction to its claim to such forfeiture and of all claim for tax, the whole sum so received to be applied to the liquidation of the tax due. The suit for forfeiture was discontinued under this compromise, and, in consequence, there was nothing distributable under the compromise. Mr. Gillespie, who claims as informer, states in his petition that he is entitled by law to receive $26,545.33. There can be no doubt that this is a mistake. The informer has no legal claim. His eventual rights depend wholly upon the character of the settlement made by the Department or by the court. In a very large number of cases, the power of remission or of compromise has been so exercised as to deprive the informer of the whole or the greater part of the reward which he would otherwise have received. Nor can an applicant be supposed to have been ignorant of the existence of this power or of its exercise. Its legality has been well settled by the courts. See, for instance, the case of Dorsheimer vs. United States, (7 Wallace, 166,) where the Supreme Court, in a case where there were claims both for tax and penalty, state that the Secretary had no right "to mitigate, remit, or compromise" the amount due for taxes. I cannot, under such circumstances, consider it proper to pass an act authorizing payment of the sum claimed by Mr. Gillespie. As I had occasion to remark in a recent case, somewhat similar, "to make an exception in this instance would be unjust; to make appropriations in all similar cases would involve a very large expenditure, and would, in my opinion, be an act of liberality not required by substantial equity." I observe, however, in this matter of Esch a peculiar circumstance which distinguishes it from others, and which, in my judgment, renders it proper to make small allowance to Mr. Gillespie, if he be the informer. The Commissioner of Internal Revenue, in his letter of January 29, 1866, recommending compromise with Esch, after advising that the whole sum received be applied to the payment of the tax, adds the words" provision to be made for the informer, if any, in each sum as you may think proper." No such "provision" was made, for a reason which the Commissioner seems to have overlooked, namely, that no fund existed from which anything could be paid to an informer, the whole sum received having been monopolized by the tax. But, in view of the intention thus expressed by the Commissioner, and of the statement of Mr. Gillespie that he has expended large sums of money in the matter, I think the case may be regarded as so far exceptional as to justify a moderate appropriation to meet such expenses. The papers transmitted by you are herewith returned. Very respectfully, Hon. H. G. DAVIS, WM. A. RICHARDSON, Secretary. United States Senate. TREASURY DEPARTMENT, SIR: In response to the request of the Hon. Mr. Davis that the Hon. Secretary of the Treasury would furnish you with "the amount paid into the Treasury on the information given by Gillespie on whisky-frauds," referred by the Secretary to me, I have to inform you that the files and records of this office show that in the matter of whisky-frauds perpetrated by Bernard Esch, a distiller at Delphos, Ohio, to which case I understand the inquiry relates, discovery having been made of such frauds, seizures were made in May, 1865, of the distillery property of Mr. Esch, and of 467 barrels of spirits belonging to him in Ohio, and also of about 400 barrels of spirits in the city of New York; that proceedings in court were instituted for the forfeiture of these various lots of property in Ohio and in New York; that the property seized in New York was duly forfeited in court, and report made that the sum of $20,615.01 was paid into the Treasury as the portion of the United States, the like amount being paid to the in former. Mr. Esch was indicted in Ohio. In compromise of his criminal liability and of the liability of that portion of his property seized in Ohio, and also of his liability for taxes evaded, he offered to pay the sum of $58,000 and all costs, $43,000 of which sum was to be paid down and $10,000 in deferred but secured payments. At the time of this offer it was estimated that, over and above all sums received from Mr. Esch or his property, by forfeiture or otherwise, he was still indebted to the United States in upward of $64,000 for taxes. On the 3d of February, 1866, the then Commissioner of Internal Revenue, with the consent of the Hon. Secretary of the Treasury, accepted the offer," the said sum of $58,000 to be wholly applied to the pay meat of the tax, in fall therefor, and in lieu of all proceedings for forfeiture or penalties." This was in accordance with the policy of this Department, to provide in all cases for the payment of taxes due the United States before devoting any portion of the moneys to penalties, a policy which was approved by the Supreme Court in the case of Dorsheimer rs. The United States, (7 Wallace.) The sum so accepted was subsequently reduced to $53,000 and all costs. In view of the Commissioner's letter of acceptance of the offer to compromise, the court in which the proceedings against the person and property of Mr. Esch were pending, in Ohio, ordered the cases to be dismissed on payment of the costs of its officers, and the property to be delivered to the collector of internal revenue for the tenth collection district of Ohio. Mr. Esch found himself unable to make good his offer. The collector of said district, Mr. Raymond, thereupon proceeded to sell the said spirits, and realized therefrom the sum of $51,263.42, out of which he paid the costs of court, $3,837.27, leaving in his hands as tax the sum of $47,426.15. As there still remained taxes due from Mr. Esch, Collector Chase, who succeeded Collector Raymond, proceeded to distrain other property of Mr. Esch, and realized therefrom the further sum of $1,644.25, which sum, added to the said sum of $47,426.15, makes the amount of forcible collections from the property of said Esch, in satisfaction of taxes, $49,070.40, leaving still due from him about $6,000, all his visible property having been exhausted. This sum is supposed to have been deposited by the collector as tax, although it cannot positively be known, especially as his accounts are short over $20,000, and are now in suit. In reference to the second branch of your inquiry, I can only say that I am informed at the office of the Hon. Secretary of the Treasury that no share of these moneys has been awarded to an informer. Very respectfully, J. K. ROGERS, Esq., Washington, D. C. B. J. SWEET, Acting Commissioner. Your committee indorse the opinion of the Secretary of the Treasury as to the legality of the claim. In regard to the permission granted by the Commissioner of Internal Revenue in his letter of January 29, 1866, to make such provision for the informer as was deemed proper, which is referred to by the Secretary of the Treasury, your committee can only say that inasmuch as Dr. Gillespie has already received the $20,615.01 from the New York seizure, it is extremely doubtful whether any further provision is merited, and if it is we have no means of determining what a proper provision would be. We think the prayer of the petitioner ought not to be allowed, and we ask to be discharged from the further consideration of the case. |