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Mr. MERITT. As I stated both yesterday and to-day, they will have the opportunity to name their attorney but the contract should be approved by the Commissioner of Indian Affairs and Secretary of the Interior so that there will be no more scandals. Our experience in the past with these contracts has been such that we must be very careful in this matter.

Mr. Kelly. I appreciate that.

Mr. MERITT. Do not take my word for it. 'Take the word of the former chairman of this committee, Hon. Charles H. Burke. I believe that no man ever in Congress would cast any reflection upon Mr. Burke's ability in regard to Indian matters or his honesty of purpose or sterling character. His speeches on the floor of the House of Representatives show the conditions that have obtained in the past and it would be very interesting to the members of this committee to read the congressional reports, and the reports of the members of this committee who have met these propositions in the past.

The CHAIRMAN. Is there anything further you desire to say?

Mr. MERITT. I desire to say this, Mr. Chairman. If this provision that Mr. Ballinger suggests is carried in this bill it will be the duty of the department to submit an adverse report on this legislation and we will feel it to be our duty to the Government and to the Indians of this country to oppose this legislation with all the power that we possess, not only before this committee and on the floor of the House, but before the Senate committee and on the floor of the Senate; and, the commissioner has said that before he will permit these outrageous outstanding contracts to be legalized he will take the matter to the President of the United State, if necessary.

The CHAIRMAN. Now, we will hear Mr. Ballinger.

Mr. BALLINGER. Of course, it is interesting to the Chippewa Indians to learn that the Indian Bureau is the boss and that the Congress must do its bidding.

Mr. MERITT. Not at all. I meant no such reflection in my statement.

Mr. BALLINGER. Mr. Chairman, observe the language on page 4, section 13,

That upon the final determination of such suit or suits the Court of Claims shall fix and determine such fees as it shall deem fair and reasonable for the services rendered and moneys expended in the prosecution of such suit or suits.

That gives the Court of Claims a free hand to fix the fee not exceeding 10 per cent. That takes away from section 2103 every essence of power that Congress intended by that section 2103 to confer upon the department, so that in the approval of the contract the department could not put a limitation on the payment. The court would fix the fee; it is free and untrammelled.

Therefore, there is and can be no merit in the contention of the department that by this language which they ask to have included in here they are protecting the Indian. Mr. Meritt is wrong in the statement to this committee that frauds and large fees have been allowed under language similar to that which the general council asks to have inserted.

In the jurisdictional bills under which these fees against which he complains were allowed, either no limitation was placed upon the allowance of fees or the act fixed a limitation of 25 or 30 and even as

high as 35 per cent. Now, Mr. Chairman, in the prosecution of the proposed suits, all of the expenses incident to the litigation must fall upon the attorney who takes his chances on winning on a contingent basis. The expense of this litigation in my judgment will run as high as $75,000. That the attorney must lay out himself in the hope that he is going to win and no man who had not looked into these cases and knew what he was doing would make such an outlay of money on a contingency. Mr. Meritt talked about a man who had gone over these Indian reservations and acquired large contracts and spoke about the possible fraud and scandal that might result, and I pause to ask him if that same man is not

the only man who has been able to obtain a contract from the Indian Bureau in the last two years

? Mr. MERITT. No, sir; the man that I have in mind has not obtained any contract from the Indian Bureau.

Mr. 'BALLINGER. Will you name that man?
Mr. MERITT. I do not care to mention names, Mr. Chairman..
The CHAIRMAN. You name him.
Mr. BALLINGER. My information is he is Mr. Evans; am I correct?

Mr. MERITT. Mr. Evans has not obtained any approved contract from the Indian Bureau.

Mr. BALLINGER. Were not the contracts taken in his name that you referred to?

Mr. MERITT. My statement is that Mr. Evans has not obtained any approved contracts from the bureau or the Interior Department regarding attorney claims.

Mr. BALLINGER. Did he not obtain an approved contract for the Red Lake Indians ?

Mr. MERITT. No, sir.

Mr. BALLINGER. My information is, Mr. Chairman, that all of this indirection and innuendo that you have heard from the Indian office was leveled at Mr. Evans and that Mr. Henderson has been the man who has taken the contracts as representing Mr. Evans throughout.

The CHAIRMAN. Mr. Henderson is here.

Mr. BALLINGER. If I have done Mr. Henderson an injustice I will be glad to be corrected.

Mr. HENDERSON. Mr. Henderson will be glad to answer any question that the members of the committee desire to ask him.

Mr. KELLY. I will ask the question. Are you directly related in contracts with Victor Evans ? Are you connected or acting as a representative of Mr. Evans in any contracts which have been approved by the Indian Bureau ?

Mr. HENDERSON. Yes, Mr. Kelly. I am Mr. Evans's counsel in many matters, including contracts that have been made between Indian tribes and Mr. Evans.

Mr. KELLY. With the Red Lake Indians ?

Mr. HENDERSON. No; they have no interest whatever. Mr. Evans has no interest whatever in the Red Lake contract nor any Chippewa contract that I know anything of.

Mr. KELLY. You have never had any trouble in getting the approval of the Indian Bureau on your contracts as counsel for Mr. Evans ?

Mr. HENDERSON. I have never had a contract approved by the Indian Bureau until recently when a contract between the Red Lake Indians and myself was approved by the bureau.

The CHAIRMAN. That answers both questions,

one.

Mr. KELLY. Then Mr. Ballinger's statement is wrong that the Indian Bureau has not approved any contract or interest to Mr. Evans.

Mr. HENDERSON. Not that I know of. I do not think Mr. Evans has ever had a contract or ever expected the Indian Bureau to approve

Mr. MERITT. I might add that the Red Lake Indians requested Mr. Henderson to represent them in this matter because of the experience that he had in previous Chippewa litigation. He is thoroughly familiar with Chippewa matters, and the representative of the Red Lake Indians requested the Indian office to approve a contract with Mr. Henderson, and I think the solicitation came from the Red Lake Indians rather than the solicitation of employment coming from Mr. Henderson.

The Chairman. Gentlemen, how much more time is it going to take on this proposition ?

Mr. BALLINGER. I think in clearing up this one matter that we will pass pretty rapidly over the rest of the bill.

The CHAIRMAN. I suggest then that it go over to Monday morning. Mr. RHODES. Mr. Henderson, did you understand the attorney to whom Mr. Meritt refers as having received a $750,000 fee is Mr. Victor J. Evans.

Mr. HENDERSON. No; Mr. Evans had never received any money from any Indian contracts of any sort.

Mr. MERITT. I can answer that directly. Mr. Victor J. Evans was not in mind when I made the statement in regard to the $750,000 fee or the $250,000 fee.

The CHAIRMAN. We will close the hearing for the present right where it is until Monday morning at 10.30 o'clock.

(Thereupon, at 12.45 o'clock p. m., the committee adjourned to meet again at 10.30 o'clock Monday, March 22, 1920.)

COMMITTEE ON INDIAN AFFAIRS,
HOUSE OF REPRESENTATIVES,

Monday, March 22, 1920. The committee met at 11 o'clock a. m., Hon. Homer P. Snyder (chairman) presiding:

The CHAIRMAN. The committee will resume its hearings on the Chippewa investigation. At the close of the last hearing we were going through the jurisdictional bill and had arrived at page 4, lines 8 and 9.

Present: Mr. E. B. Meritt, Mr. Webster Ballinger, and Mr. Daniel W. Henderson.

Mr. BALLINGER. Mr. Chairman, just one word and I will conclude my statement with reference to that amendment--and the same applies to other amendments later on in the bill.

Reference has been made by Mr. Meritt to two cases in which it has been claimed that exorbitant fees have been allowed by the Court of Claims. I take it that Mr. Meritt referred, though he did not state the case, to the fee allowed in the Choctaw-Chickasaw citizenship court of $750,000. That is one of the cases, is it not, Mr. Meritt?

Mr. MERITT. Yes; but I did not state that the Court of Claims made that award in that case. Mr. BALLINGER. That award was made by a special tribunal.

The provisions of the jurisdictional act are found in volume 32, United States Statutes at Large, pages 995 and 996. In the jurisdictional act there was no limitation placed upon the court at all as to the amount of the fee to be allowed, as is the case in the draft of the bill before the committee.

The other case referred to was the case of the confederated bands of Ute Indians. Am I correct on that, Mr. Meritt?

Mr. MERITT. That is one of the cases I had in mind.

Mr. BALLINGER. The jurisdictional act in that case is found in 35 Statutes at Large, pages 788 and 789; and in that jurisdictional act there was no limitation whatever placed upon the fee. Further, in both of these acts, as I now recall, the courts were authorized to take into consideration the contracts. So the provision of the pending bill differs very materially from the two jurisdictional acts in which these fees were allowed.

Now, Mr. Chairman, the next amendment

Mr. MERITT (interposing). Are you leaving the attorney question there?

Mr. BALLINGER. Yes. Mr. MERITT. Mr. Chairman, it should be pointed out in connection with Mr. Ballinger's statement that these jurisdictional acts that he has referred to did not require the approval of those attorney contracts, in accordance with existing law, sections 2103, 2104, 2105, and 2106 of the Revised Statutes; and my point was this, that because of that fact the Indian Bureau was not in a position to protect the interests of the Indians, and these large attorney fees were the result.

Again, Mr. Chairman, Mr. Ballinger referred to sections 2103, 2104, 2105, and 2106, of the Revised Statutes the other day as being old legislation on the Statute books, and implied that they were not applicable to present conditions. I want to emphasize the fact that those laws are just as applicable to present conditions as they were when they were enacted, and are probably more needed now than they were when they were enacted, because there are more outstanding illegal attorney contracts.

Besides, gentlemen of the committee, Congress has recently placed itself upon record in regard to these attorney contracts after a very careful investigation, and the legislation placed on the statute books is found in the act of June 30, 1913 (38 Stat., p. 97), and reads as follows:

No contract made with any Indian, where such contract relates to the tribal funds or property in the hands of the United States, shall be valid, nor shall any payment for services rendered in relation thereto be made unless the consent of the United States has previously been given.

That, gentlemen of the committee, is a confirmation of the principle contained in the old statutes, sections 2103, 2104, 2105, and 2106 of the Revised Statutes, and that legislation was not enacted without very careful consideration.

I have recently called attention of the committee to the scandals in connection with attorney contracts, and in order that the committee may have a reference to some of the recent reports by the committees of Congress-by the Indian Committees of Congress, if you please-I

would invite the attention of the committee to this Report No. 2273, Sixty-first Congress, third session, consisting of two volumes, and it would be very interesting to the members of this committee to glance over these reports and see what has been in the past in regard to attorney contracts that were not under the control if the Indian Bureau. In order that they may appear in the record-at least a part of the report of this committee of Congress-I am going to ask the privilege of reading about a page and a half of this report. The report is signed by the former chairman of this committee, Hon. Charles H. Burke, Hon. Phillip Campbell, who is now a member of this committee, Hon. C. B. Miller, a former Member of Congress from Minnesota, and Hon. E. W. Saunders, recently resigned from this Congress, from the State of Virginia. This report reads in part as follows:

INDIAN CLAIMS-CONTINGENT FEES.

The committee made inquiry for the purpose of ascertaining to what extent appropriations have been made by Congress in recent years for the payment of Indian claims, together with the amount of attorney's fees paid. (See testimony, pp. 605-607.) The fees referred to in the testimony amount to nearly $4,000,000 and some of them were exorbitant, unconscionable, and in contravention of public policy, notwithstanding the fact that they had the direct or indirect approval of Congress.

Many Indian claims, antiquated and without meritorious basis, have been trumped up against the Government by industrious attorneys, claim agents, and professional lobbyists, until there is now pending, in one form or another, in the departments and before Congress, claims of this character amounting to many millions of dollars.

In the present Congress scores of bills have been introduced on the subject of these antiquated claims, for no other purpose than to provide a dragnet for obtaining information from the departments with the object of bolstering up these questionable claims, and if an adverse report on one of these bills is authorized by the Committee on Indian Affairs, forces are immediately put in motion in behalf of the same purpose and another bill of the same import is likely to be introduced in the name of some accommodating Member of Congress who gives the matter slight consideration, depending on the Committee on Indian Affairs to sift the facts and dispose of the bill. The practice of lobbyists bas become so bold that it has happened since this report has been in process of formulation for submission to this House, an adversely reported bill has been succeeded on the committee's calendar by another of similar import without even the knowledge of the Representative in whose name it was introduced. In case of adjournment of Congress without any action by the committee, other bills make their

appearance in the succeeding Congress, and so the procedure continues indefinitely in the hope that ultimately a committee and a Congress may be found that will provide the appropriation with the contingent fee attachment.

Of course, the purpose of those actively engaged in exploiting such claims is tɔ obtain the fee contracted for upon a contingent basis. The effect of such compensation for adventurers who, quoting the language of the Supreme Court of the United States, "make market of themselves in this way,” should receive the careful consideration of Congress. The committee is of the opinion that the court could not have expressed itself more pertinently to many contracts which have been the subject of investigation by this committee within the past eight months than it did in the case of Marshall v. Baltimore & Ohio Railroad Co: (57 U. S., 314, 335), when it said:

“Bribes, in the shape of high contingent compensation, must necessarily lead to the use of improper means and the exercise of undue influence. Their necessary consequence is the demoralization of the agent who covenants for them; he is soon brought to believe that any means which will produce so beneficial a result to himself are 'proper means;' and that a share of these profits may have the same effect of quickening the perceptions and warming the zeal of influential or 'careless' Members in favor of this bill.”

Again, in the case of Trist v. Child (21 U. S., 441, 451) the court expressed itself as follows:

"The agreement in the present case was for the sale of the influence and exertions of the lobby agent to bring about the passage of a law for the payment of a private claim, without reference to its merits, by means which, if not corrupt, were illegitimate, and, considered in connection with the pecuniary interest of the agent at stake, contrary to the plainest principles of public policy. No one has a right, in such circumstances,

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