Under that authority to the Postmaster-General there have been, from time to time, various regulations made and various assignments and distributions of duty, the language of the statute being

The distribution and performance of its business.

Among other things there were assigned to the Second Assistant Postmaster General the duties which I will read to you that you may see the breadth and scope of them. The copy of the regulations from which I read is the edition of July, 1879, but they were substantially the same regulations which prevailed before that time. These contracts were bid for in the fall of 1877, and were awarded in the winter of 1878, and commenced the 1st of July, 1878. Of course the regulations prior to 1879, as well as those of 1879, may come into play, but I think it will be found that in no point where they differ do they affect this case. Thomas J. Brady became Second Assistant Postmaster General on the 23d of July, 1876, and he continued as such down to about the 1st of April, 1881, not long after the incoming of General Garfield's administration.

The regulations of the Postmaster-General as to the distribution of duties to the Second Assistant Postmaster-General contain the following:

THE OFFICE OF THE SECOND ASSISTANT POSTMASTER-GENERAL.

To this office is assigned the business of arranging the mail service of the United States, and placing the same under contract, embracing all correspondence and proceedings respecting the frequency of trips, mode of conveyance, and times of departures and arrivals on all the routes, the course of the mails between the different sections of the country, the points of mail distribution, and the regulations for the government of the domestic mail service of the United States. It prepares the advertisements for mail proposals, receives the bids, and has charge of the annual and miscellaneous mail-lettings, and the adjustment and execution of all the contracts. All applications for mail service or change of mail arrangements and for mail messengers should be sent to this office. All claims should be submitted to it for transportation service. From this office all postmasters at the end of the routes receive the state-. ment of mail arrangements prescribed for the respective routes. It reports weekly to the auditor all contracts executed and all orders affecting the accounts for mail transportation; prepares the statistical exhibits of the mail service, and the reports to Congress of the mail-lettings, giving a statement of each bid; also of the contracts made, the new service originated, the curtailments ordered, and the additional allowances granted during the year. The rates of pay for the transportation of the mails on railroad routes, according to the amount and character of the service, are adjusted by this office. It also directs the weighing of the mails on the same, and authorizes new service on railroad routes. The issuing of mail-locks and keys, mail-pouches and sacks, and the supervision of the construction of mail-bag catchers is also in charge of this office. To it is attached the division of inspection, to which is assigned the duty of receiving and inspecting the monthly registers of arrivals and departures, reporting the performance of mail service; also special reports of failures or delinquencies on the part of mail contractors or their agents, and of noting such failures and delinquencies, and preparing cases of fines or deductions by reason thereof; of conducting the correspondence growing out of reports of failures or delinquencies in the transportation of the mails; of reporting to the Auditor of the Treasury for the PostOffice Department, at the close of each quarter, by certificate of inspection, the fact of performance or non-performance of contract or recognized mail service, noting therein such fines or deductions as may have been ordered; of authorizing the payment of all employés of the railway mail service; also the payment of such acting employés as may be employed by this office through the superintendent of railway mail service in cases of emergency, and of authorizing the auditor to credit postmasters with sums paid by them for such temporary service; and such other duties as may be necessary to secure a faithful performance of the mail service. All complaints against mail contractors or their agents, relating to failures or other irregularities in the transportation of the mails, whether made by postmasters or others, should be promptly forwarded to the Second Assistant Postmaster-General marked "Division of Inspection." You will therefore see, gentlemen, that to the Second Assistant Postmaster-General is assigned the whole power over the transportation of

the mails, the making of the contracts for them, the decision of the question whether the contractors perform their service properly or not, and the imposition of fines upon them if they have not performed them properly. You will also see as I go along, that by general language the Second Assistant Postmaster-General is given the right to make extra allowances in various forms, which extra allowances are practically the source of the fraud upon the Government of which we complain in this

case.

Now, gentlemen, bearing in mind these provisions that I have read to you, the condition of things under the statute, as we regard it, is this: It is the duty of the Postmaster-General to provide for the carrying of the mail. That duty is imposed in general terms upon the Postmaster-General, and then, under the special power given by the statute which I have read to you, it is assigned by him to the Second Assistant Postmaster-General, and his power is plenary. The statute provides, however, some limitations and considerations which must prevail in connection with the question of carrying the mail, and amongst others is this. I read from section 3965 of the Revised Statutes:

The Postmaster-General shall provide for carrying the mail on all post-routes established by law, as often as he, having due regard to productiveness, and other circumstances, may think proper.

The discretionary power given to the Postmaster-General was transferred to the Second Assistant Postmaster-General, but he is required to have "regard to productiveness and other circumstances." Productiveness is the only circumstance specified in the statute.

The Second Assistant Postmaster-General having, we will suppose, decided that the mails are to be carried on a certain route and at a certain rate of speed, and a certain number of times a week, what is his duty and what is the scheme of the law as to how that plan shall be carried out? It is in general terms this: That the opportunity for carrying the mail shall be thrown open to the whole world; that there shall be public advertisements inviting everybody to bid, and that when they do bid the contracts shall be awarded to the lowest bidder. The whole scheme and scope of the law is that as to all post-office contracts the service shall be thrown open to public competition, and contracts shall be awarded to the lowest bidder. There are also in the laws certain provisions, which I shall read directly, which are intended to provide for unforeseen contingencies which cannot be covered by the ordinary advertisements. It was by a perversion of these that Mr. Brady and Mr. Dorsey and his associates succeeded in defrauding the United States. Section 3941 of the Revised Statutes, as it then stood, provided:

The Postmaster-General shall cause advertisements of all general mail lettings of each State and Territory to be conspicuously posted in each post-office in the State or Territory embraced in said advertisement for at least sixty days before the time of such general letting, and no other advertisement of such letting shall be required; but this provision shall not apply to any other than general mail lettings.

Then, to meet the contingency, there comes section 3957, which provides:

Whenever, by reason of any error, omission, or other cause, any route which should properly be advertised for the regular letting is omitted, it shall be the duty of the Postmaster-General to advertise the same as soon as the error or omission shall be discovered, and the proposals for such route shall be opened as soon as possible after the other proposals in the same contract section; and the contract made under such supplementary advertisement shall run, as nearly as possible, from the beginning to the end of the regular contract term, and during the time necessarily lost by reason of such error, omission, or other cause, the Postmaster-General shall provide for the carrying of the mail on such route at as low rate as possible without advertising.

You will see that this section, keeping up the spirit of the statute, provided that where anything has been accidentally omitted from the advertisement there shall be a supplemental advertisement throwing it open to public bidding, and that the Postmaster-General is authorized to provide for the carrying of the mail on that omitted route only during the period when the new advertisement is running. Referring to a phrase which appears in that statute, it is proper for me to say to you, gentlemen, that under the practice of the Post-Office Department the whole country is divided into contract sections, and that what is known as the Pacific section, which covers substantially all the territory west of the Mississippi River, is the section within which the routes were contained in connection with which the frauds alleged against these defendants were perpetrated. In these contract sections it is the practice for the convenience of the department to let the contracts at different times. All contracts run for four years, but they let the contracts last year for the Pacific section, perhaps next year for the New England section, and so on. The contracts in the Pacific section, to which these frauds relate, were let to take effect on the 1st of July, 1878, and those contracts expired on the 30th of June, 1882, when new contracts were made for the Pacific section. By section 3958 it is pro

vided :

Whenever it becomes necessary to change the terms of an existing contract for carrying the mail otherwise than as provided

in two other sections to which I will call your attention directlynotice thereof shall be given and proceedings had thereon the same as at the letting of the original contract.

Then by section 3944 of the Revised Statutes it is provided:

Proposals for carrying the mail shall be delivered, sealed, and so kept until the bidding is closed, and shall then be opened and marked in the presence of the Postmaster-General and one of the assistant postmasters-general or two of the assistant postmasters-general, or of any other two officers of the department, to be designated by the Postmaster-General.

By section 3948 of the Revised Statutes it is provided that—

The Postmaster-General shall have recorded in a book to be kept for that purpose a true and faithful abstract of all proposals made to him for carrying the mail, giving the name of the party offering, the terms of the offer, the sum to be paid, and the time the contract is to continue; and he shall put on file and preserve the originals of all such proposals.

Then section 3950 provides that-

No contract for carrying the mail shall be made with any person who has entered, or proposes to enter, into any combination to prevent the making of any bid for carrying the mail, or who has made any agreement, or given or performed, or promised to give or perform, any consideration whatever to induce any other person not to bid for any such contract; and if any person so offending is a contractor for carrying the mail his contract may be annulled.

You will see running through all the same provision for public advertisement, free, open bidding, and the imposition of penalties for anything which prevents free and public bidding. Then comes section 3951 of the Revised Statutes. This section makes provision for a case where, after the award of the contract, the contractor does not take the service up. It provides for temporary service and new advertisement: Whenever an accepted bidder shall fail to enter into contract, or a contractor on a mail route shall fail or refuse to perform the service on said route according to his contract, or when a new route shall be established, or new service required, or when from any other cause there shall not be a contractor legally bound or required to perform such service, the Postmaster-General may make a temporary contract for carrying the mail on such route, without advertising, for such period as may be necessary, not exceeding six months.

Therefore, if new service is required because of the refusal of the contractor after he has been awarded the contract to enter into it, or if he fails to perform the contract after he has entered into it, there is the right of the Postmaster-General to see that the mails are carried by temporary contract, which, however, can continue only six months. It is worth while perhaps, gentlemen, to show you how thoroughly the idea of public advertisement and open public bidding runs through all the postal laws, and to call your attention to the fact that when you' come to a class of service where from the nature of the case there cannot be competition, such service is excepted by special statute, leaving the remainder as it was before, and thus emphasizing the scheme. We all know that in railroad service there is ordinarily no opportunity for competition, because there is ordinarily only one railroad between given points. Therefore it is that special powers are given to the PostmasterGeneral by sections 3942, 3956, and 3970, with reference to the railway mail service and steamboat service:

The Postmaster-General may enter into contracts for carrying the mail with railroad companies without advertising for bids therefor.

When from any cause it may become necessary to make a new contract for carrying the mails upon any water-route between ports of the United States upon which mail service has been previously performed, the Postmaster-General may contract with the owner or master of any steamer for carrying the said mail upon said route without advertising.

Those are the provisions which, in connection with another provision as to steamboat routes, are, I think, the only provisions which give the Postmaster-General power to make contracts for carrying the mail without advertising and open public competition. You will excuse me if I emphasize the fact that you may plainly see the scheme to be one of advertisement, an opportunity for free and open public bidding, and a provision for the different contingencies in case of a contractor failing to enter into contract, or to carry it out, for temporary service extending simply over six months, and in this way making provision that the mail shall be carried, come what may. Now, these provisions, your own judg ment will tell you, mean precisely what the Supreme Court has said in the case of Garfielde against The United States, in 3 Otto:

The object of the statute was to secure notice of the intended post routes, of the service required, and the manner of its performance, that bidders might compete, that favoritism should be prevented, and that efficiency and economy in the service should be obtained.

We think you will be satisfied before we get through how wise the statute was, because we shall show you overwhelmingly that when favoritism is allowed to come in efficiency and economy cease to exist in the service.

This being the scope of the law, gentlemen, what were the duties of the Second Assistant Postmaster-General with reference to the arrangement to carry the mail? Very obviously, first, to ascertain the probable necessities of the service during the four years for which he was about to advertise. He had abundant means of ascertaining those necessities. He knew, in the first place, what the existing service was which was about to expire. He had postmasters at every town, each one of whom would certainly not err in understanding the amount of service required. Each man in his locality would certainly see that the claim of the locality to the requisite amount of service was brought to the notice of the Second Assistant Postmaster-General. Beside that the Second Assistant Postmaster-General is provided with a corps, known as post-office inspectors, whose business it is to go to the regions

in question and see precisely what the condition of the locality is, what service is required, how it is performed, and everything of that sort. They are his eyes. I want here to say that in view of the practice, which seems to prevail in these days, of assuming that every branch of the public service is incompetent and corrupt, that I do not believe there is any private corporation or any private citizen who has so efficient a corps of men under him as the corps of post office inspectors in the Post-Office Department of the United States, taking them as they have been certainly within the last two years. The Second Assistant Postmaster-General has these means of finding out how much service should be advertised for. Having ascertained that, it is his obvious duty, as an honest public officer, to advertise for all the service required, so as to submit it to public bidding. If he could advertise for only a portion of the service and then, under some of those laws which I have read to you, or under others to which I will directly call your attention, could, by private proceeding behind the door, arrange for contracts with other parties without competition, of course he could nullify the practical objects of the law. He must, therefore, advertise for all the service required. He must advertise for the number of trips per week which, according to the best information he can get, is likely to be required. He must advertise for the rate of speed which, according to the best information he can get, is proper for the locality. We all understand that in certain unfrequented regions and in certain mountainous countries it is very absurd to ask that the mail shall be carried without the aid of railroads, six, eight, or nine miles an hour. In certain regions it may be proper not to carry the mail at a higher rate of speed than three miles an hour. Perhaps I ought to say here in passing, that when it comes to speaking of service at a certain number of miles an hour, you must bear in mind that under the rules of the Post-Office Department when a man is required to transport the mail at the rate of four miles an hour that includes all stoppages, and that every postmaster at whose office he stops to leave and obtain mail is authorized to detain him not to exceed seven minutes; so that if there is a single post-office the hour would be reduced by seven minutes, and so on. Now, if the Second Assistant Postmaster-General believes that four miles an hour is a proper rate of speed he has no right to advertise for three miles and then expect under some provision of the law to increase it. He is bound also under the law which I read to you in fixing the proper amount of service to have regard to "productiveness and other circumstances," productiveness being the only circumstance specified. He must make up his mind upon that subject, and then, having made up his mind and having advertised and having received bids, he must award the contract to the lowest bidder. It is provided in section 3949 of the Revised Statutes:

All contracts for carrying mails shall be in the name of the United States, and shall be awarded to the lowest bidder tendering sufficient guarantees for faithful performance without other reference to the mode of transportation than may be necessary to provide for the due celerity, certainty, and security thereof.

Gentlemen, in those three words, celerity, certainty, and security, we find the origin of the phrase "star route." Prior to 1845, I think, the Postmaster-General, in awarding contracts, was authorized to take into consideration other matters; among other things, if I remember right, the conveniences that the contractor had for transporting passengers. This led to great abuses, and in that year there was passed a statute in which the words celerity, certainty, and security appear. And when contracts were awarded under that law and came to be carried on to the Post-Office