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Mr. Adams. Yes, sir--oh, yes; I will say this: When we were looking at Jennings's record; he went in, I think, at $2,800.
The CHAIRMAN. When?
Mr. ADAMS. At the time-I do not know, but several years now, probably in 1919—I imagine it was way back, but in six months time after he went in, he had $3,000; and they shoved him right up from $2,800 to $4,000. I think that was the reason why Mr. De La Mater was forced to resign was on account of that increase in salary; I think there was something about the regulations that I can tell you a little later on.
Now, let's see--the evidence available proves not only that there was no preference given to veterans in the dismissals but that men were retained whose work was far below the
The assistant chief, Mr. W. T. Jennings, was dismissed for perjury in connection with his civil-service application and he was the only executive who came into direct contact with the men. The principal qualification required was not experience or knowledge of the engineering phase of the taxpayers' business, but to give a liberal allowance to the proper taxpayers. As I say, that has nothing to it; what evidence will be found in the department I can not say. It is more than a surmise, though. Some of the reports covering manufacturing operations were by men who had no previous experience and while they read well to the uninformed, are a joke. They sent a man out to appraise a machine shop that did not know a lathe from a drill
press, as one of the taxpayers told me. You can imagine the class of men that some are that are sent out on the jobs-builders that apparently never did anything in their lives but building, are put out trying to appraise machinery built for special operations, the appraisal of which demands knowledge of engineering in production lines.
Senator ERNST. Have you in your mind the man of whom you are now talking ?
Mr. Adams. I would prefer not to give his name; he is employed there; I think it would be unfair to him.
Senator Ernst. He is now in the department?
Mr. Adams. The taxpayer that we were talking to saw us going through the shop and he said, "Well, do you know what this is I am pointing out?” I said, “Yes, sir, I do. I worked in a machine shop all my life, nearly.
He said, “Well,” he says, “I will tell you, the last pair that was here I started to talk to, supposing he knew all about the lathe. When I got through talking he pointed over to a drill press and said, 'Is that what you mean by a lathe?'” He said, “I saw right away there was no use talking to him.'
The CHAIRMAN. Mr. Adams, Mr. Hartson wants to know who that man is.
Mr. ADAMS. I will not tell you.
Mr. HARTSON. I think, Mr. Chairman, it is important that we should ascertain who those employees are, especially as it is charged that we are retaining incompetents in the service; I think we ought to be told who is incompetent, if people know.
Mr. Adams. Well, let me say this: That anything I say is not going to prove that man incompetent. That the Government ought to prove itself. I am not after- I am not after doing anything--getting any satisfaction as to what is past, but I do want to make it a point if it is the last thing I do on earth, to see that the taxpayer has a square deal in the future. I want à Government here that we can look up to as being honest--no short-changing.
The CHAIRMAN. How can you have the taxpayers' interest so much at heart and not want to see an incompetent man discharged?
Mr. ADAMS. He could improve, Senator, and might now be the most meritorious on earth; after he has worked a couple of years he ought not to still be making the same mistakes.
The CHAIRMAN. Was he under civil service?
Mr. Adams. Regular examination; but that would not necessarily qualify a man for that kind of work; you can come in as a civil engineer, mining engineer
The CHAIRMAN. They are examined with reference to the particular duties to be performed when they come in, are they not?
Mr. ADAMS. Yes; but you see the department requires all kinds of engineers, and instead of the executive taking a mechanical engineer for mechanical work and a civil engineer for his line of work they would send them out indiscriminately.
Doctor Adams. Would you mind naming the taxpayer?
Mr. ADAMS. I would rather not; in fact I do not remember the individual's name.
The CHAIRMAN. All right.
Doctor Adams. It might be the taxpayer could give us a general expression to the efficiency of the bureau we are investigating.
Senator Couzens. Will you get the name of the taxpayer and give it to us?
Mr. Adams. I think I can get it for you and will give it to you at some later time.
Mr. Jennings has not been prosecuted for perjury, nor will he be. I understand that Mr. Batson, a former Commissioner of Internal Revenue, has used his influence with the Civil Service Commission to have the case dropped.
The CHAIRMAX. How do you know that? Mr. Adams. I was told that by a party in the Civil Service Commission.
The CHAIRMAN. How has Mr. Batson influence enough to control the Civil Service Commission?
Mr. Adams. I don't know anything about it. I know this party told me that Mr. Batson had been up there with Mr. Jennings in his behalf; that they had talked to Mr. Hess, I believe was there, and some of the other commissioners; and that the matter was dropped.
The CHAIRMAN. Is it up to the Civil Service Commission to prosecute a case of that kind?
Mr. ADAMS. Yes; they prosecute.
The CHAIRMAN. Nobody else?
Senator COUZENS. In your inquiry in the Civil Service Commission in the investigation of Mr. Jennings's case, did you come across any political influence?
Mr. Adams. I did not look for it; I did not pay any attention to it; I was not looking for it.
Senator COUZENS. A while ago you said you remained in the department some time after you discovered there was graft.
Mr. ADAMS. Yes.
Senator COUZENS. And after this discovery of graft you went to a politician?
Mr. ADAMS. Yes.
Senator COUZENS. And asked his advice, or at least related the story and he advised that you stay in there and get proof?
Mr. ADAMS. HI'm; h'm.
Mr. ADAMS. No; nothing to do with Washington. He is outisde altogether.
Senator COUZENS. And not an office holder?
The CHAIRMAN. Now, Mr. Adams, I come back now to my original question. I can understand these charges of incompetency, but the statement is questioned by Senator Couzens that you discovered graft and that you stayed after you had discovered graft.
Mr. Adams. I say the charges that have
The CHAIRMAN. I understood you to say a little while ago that you could not put your finger on any case of graft.
Mr. Adams. Yes; that is the point that I want to emphasize, too.
Senator COUZENS. So, then, Mr. Adams, your statement to my secretary was not exactly correct when you reported to him upon leaving your card in my office “He claims to know a great deal about graft and corruption;" that is not the actual fact, is it?
Mr. ADAMS. Well, I do not know.
Mr. Adams. No; I guess that is true. If you want to take my evidence as it appears to me and as it will to any fair-minded man that there is graft in the department, there is no doubt of it; but there is no proof of it.
We know that certain things happen in this world, but as to how a great many things happen it is hard to find out.
Senator Couzens. Will you just complete your statement. We have another witness and I would like to finish with him if it is agreeable to the committee.
Mr. ADAMS. Mr. De La Mater's resignation was accepted on account of some irregularities connected with the Jennings' affair, according to information secured from the Civil Service Commission.
Senator Ernst. Are you reading generalization?
Mr. Adams. I would suggest that a comparative statement be made of the allowances made to the Standard Steel Car Co., Aluminum Co., of America
Senator COUZENS. Those are both Mellon companies, are they not? .
Mr. ADAMS. I don't know—United States Steel, Brown & Sharpe Manufacturing Co., Colorado Fuel & Iron Co., and the Great Lakes Ship Corporation, and some others that I could not think of in the statement here, and with some of the smaller and less favored concerns. This should entail a field examination of some of the larger cases, but the cost would save many hundreds time over the tax to be assessed.
The CHAIRMAN. A field examination on the question of amortization?
Mr. ADAMS. On the question of amortization, yes, sir.
The CHAIRMAN. I would like to see if I understand what you have in mind, Mr. Adams.
Mr. ADAMS. Yes, sir.
Senator COUZENS. Some of these smaller or less favored concerns, just one or two for example. Some while ago you mentioned some lesser concerns, quoting the Ford Motor Co. I would hardly call that company a lesser concern; Do you mean by that a less favored concern?
Mr. ADAMS. Less favored concern. I do not know anything about the Ford Co. or anything of the kind, but I have heard all sorts of rumors by the recipients of favors. Occasionally the men would let slip something about their cases, and I would see that they were instructed. For instance, I think the original letter sent to the department wherein Mr.
Senator COUZENS. Original letter from whom?
Mr. ADAMS. Signed by onesome one above Mr. Wheeler who at that time was chief of the section, before my time, but I saw the original letter that was sent through to Wheeler.
Senator COUZENS. To whom?
Mr. ADAMS. To Mr. Wheeler, chief of the section, stating that this company's claim is to have immediate attention. There are two important matters in connection with this claim; one is that it is a Mellon corporation and there must be no tax assessment, and the other is that it must be expedited. Now, I saw the original and
Senator COUZENS. Now, let me get that straight; you saw the original letter from whom?
Mr. ADAMS. From the chief to Mr. Wheeler.
Mr. ADAMS. The man above the chief to Mr. Wheeler. the chief of the section at that time of the amortization section.
Senator COUZENS. But you do not know who the man was that wrote the letter?
Mr. Adams. Well, now, Senator; I gave you the name of the engineer, and I think it would be well if he brought the original right here to you.
Senator COUZENS. I have not the name of the man I think you claim has the letter.
Mr. ADAMS. Yes, sir.
Mr. ADAMS. I think his name is—I just can't remember it right now, as it is a new one to me.
Senator COUZENS. You say this witness whose name whom you have given me has the original letter?
pena on him.
Mr. Adams. He has the original letter.
Mr. ADAMS. Oh, yes; I could, and the next time I come I can have the name of the signer, too.
The CHAIRMAN. The best evidence is the letter itself.
Senator Couzens. I submitted the name of the witness who is supposed to have the letter, but we have not been able to serve a sub
He is out of town.
Doctor ADAMS. You said there was a confidential circular for the agents not to raise or increase taxpayers' claims. Mr. ADAMS. Yes.
Doctor Adams. Have you a copy of tht letter or do you recall its number?
Mr. Adams. No; it was taken away from me when I left; all the stuff I had was taken away from me.
Doctor ADAMS. You do not recall its date?
Mr. Adams. Yes; I should say it was some time between May and July, 1923.
Doctor Adams. May or July, 1923?
Senator Couzexs. Is there anything further desired of Mr. Adams for the present? If not, I will ask if there is any other witness present?
STATEMENT OF J. P. MOORE, CUMBERLAND APARTMENTS,
WASHINGTON, D. C.
Senator COUZENS. Will you give your name to the stenographer, please?
Mr. MOORE. J. P. Moore.
Mr. Moore. I was an appraisal engineer, the same as Mr. Adams, who has just testified.
Senator COUZENS. Did you hear Mr. Adams's testimony?
Senator COUZENS. What was your occupation before you were in the bureau ?