they did not know it they were still willing for the order to go through-is not that the statement to which you refer? Senator Roor. Well, that I can not tell you. The CHAIRMAN. Well, that is already in the record; that letter has been produced and is now in the record, and also the facts. Senator RooT. There was also a letter, if I can find it, written by me on the 14th of January, 1909, which was, I think, the very day when I was first informed about this transaction, and which contains a statement of my understanding at that time. I do not know, Mr. Chairman, whether the committee understands that the accounting office dealing with all these matters was the Insular Division of the War Department. The CHAIRMAN. Yes; we understand that. Senator RooT. That with regard to the disposition of the new bonds that were issued, and the disposition of the moneys received for the new bonds, the function of the State Department was simply to see whether the object conformed to the objects specified in the treaty, and the fiscal agent of the Dominican Republic reported once a month, I believe it was, to the Insular Bureau as to the delivery of the bonds and the payments which they had made, and those papers and vouchers were submitted to the State Department for the purpose of seeing whether they conformed to the treaty. It was in January, about the 14th of January, 1909, that Gen. Edwards, Chief of the Insular Division of the War Department, came to me and to Mr. Bacon and said that it appeared from the reports that had come from this fiscal agent that $25,000 in cash and $75,000 in bonds had been paid over to Dr. Hollander, and that was my first knowledge on the subject, and I am quite sure it was Mr. Bacon's first knowledge. I will hand you a copy of the letter about which I spoke. The CHAIRMAN. You want to put that in the record? Senator ROOT. Yes; it is a letter from the Secretary of State to the Secretary of War, dated January 14, 1909. The CHAIRMAN. Let that go in; and if you have any other communications that you desire to put in the record you can put them in, Senator. Senator RooT. No; I do not think of any. The CHAIRMAN. We want to get all the information we can on the subject. (The letter referred to is as follows:) [Copy of a letter written by the Secretary of State to the Secretary of War, under date of Jan. 14, 1909.] The honorable the SECRETARY OF WAR. DEPARTMENT OF STATE, Washington, January 14, 1909. SIR: Under the convention concluded February 8, 1907, between the United States and the Dominican Republic, the proceeds of an issue of Dominican bonds amounting to $20,000,000 are to be applied first to the payment of debts and claims as adjusted, and, second, out of the balance remaining, to the retirement and extinction of certain concessions and harbor monopolies which are a burden and hindrance to the commerce of the country, and, third, the entire balace still remaining to the construction of certain railroads and bridges and other public improvements necessary to the industrial development of the country. A considerable amount of the bonds of this issue and a large amount of cash are now in the hands of the Morton Trust Co., subject to be applied in accord ance with these provisions of the convention, and the United States, as well as Santo Domingo, has an immediate interest in seeing that they are applied in accordance with the provisions of the convention. In the executive order containing general regulations for the government of the Dominican customs receivership, under the said convention, prepared upon consultation between the State and War Departments, it is provided that “the Bureau of Insular Affairs of the War Department shall have immediate supervision and control of the receivership pursuant and subject to such directions in regard thereto as shall be received from the President directly or through the Secretary of State." In accordance with these provisions of treaty and regulation, the Morton Trust Co. was instructed by letter of the Chief of the Bureau of Insular Affairs, dated March 21, 1908, that the money and bonds referred to were to be drawn "only on orders signed by the minister of finance of the Dominican Republic, indorsed registered at the Bureau of Insular Affairs as drawn in conformity with the convention of February 8, 1907." This arrangement contemplated that the various drafts or orders upon the Morton Trust Co. for the payment of money or the delivery of bonds should be sent to the State Department for examination and decision as to whether they conformed to the terms of the convention and should then be transmitted to the Bureau of Insular Affairs of the War Department for registration and transmission to the fiscal agent of the Dominican Republic, and that course has been followed hitherto. Until the 1st of August, 1908, Mr. Jacob H. Hollander, a former treasurer of Porto Rico, who had been a special commissioner from the United States in Santo Domingo, was employed by the State Department to assist in the adjustment of the financial affairs of Santo Domingo, and his certificates in regard to drafts were regarded as indicating the exercise of this scrutiny in behalf of the United States in regard to the character of the drafts made. On the 1st of August, 1908, however, Mr. Hollander ceased to be employed by the United States, and he has now, as the State Department is informed, been employed by Santo Domingo to assist them in their financial affairs, having no further connection with the United States. I have accordingly directed that all drafts which come to the State Department shall be submitted to the chief of the Bureau of Accounts of the State Department, and that the responsibility be placed upon him for ascertaining from the Secretary of State or other officer of the department charged with that duty whether the drafts are to be deemed by the State Department to be in conformity with the convention and securing the approval of the Secretary of State or the Assistant Secretary charged with that duty. Upon receiving such approval the chief of the Bureau of Accounts will transmit the drafts to the chief of the Bureau of Insular Affairs. Should you wish any change in the method of procedure, or be disposed to make any comment or suggestion in regard thereto, I should be happy to hear from you, and if the method proposed is satisfactory I should be glad to have your confirmation thereof. I have the honor to be, sir, your obedient servant. ELIHU ROOT. The chairman presented a letter which he had addressed to Justice Day, which letter is as follows: HOUSE OF REPRESENTATIVES OF THE UNITED STATES, Hon. WILLIAM R. DAY, Canton, Ohio. May 31, 1911. MY DEAR SIR: The Committee on Expenditures in the State Department, of which committee I have the honor to be chairman, in the prosecution of its duties has developed what seems to be an irregular situation in connection with the payment by the State Department for the painting of a portrait of yourself by one Albert Rosenthal. The testimony thus far taken shows that your attention was called to this matter some time ago, and the committee, desiring to develop all the facts in connection with this transaction and thinking you could no doubt aid them by making a statement, directs me to ask you to either come before the committee or, if you prefer, make a written statement, send it to me, giving all the facts within your knowledge touching this matter, and we will incorporate the same in the hearings before the committee. With great respect, I beg to remain, Very truly, yours, C. W. HAMLIN, Chairman of the Committee on Expenditures in the State Department. The chairman also presented to the committee the following reply from Justice Day: Hon. C. W. HAMLIN, Chairman of the Committee on Expenditures CANTON, OHIO, June 2, 1911. in the State Department, House of Representatives, MY DEAR SIR: I have your favor of the 31st ultimo, requesting me to make a statement concerning the painting of my picture by one Albert Rosenthal, an artist of Philadelphia, for the State Department at Washington. Complying with that request, I have to say that shortly after my appointment to the Supreme Court, in the spring of 1903, I received a letter from Rosenthal indicating a desire to procure a picture of me for Mr. Carson's history of the Supreme Court, Mr. Rosenthal advising me that he had the pictures of the other justices for that purpose. I advised him, in substançe, that I would see him on my return to Washington in the fall of 1903. After my retirement from the State Department in 1898 I received a note from Secretary Hay, my successor, requesting me to have a picture painted for the State Department collection of ex-Secretaries of State, and have it made by an artist of my own selection. When Mr. Rosenthal came to my house in the fall of 1903 it occurred to me that, if his picture was acceptable to the State Department and myself, it would be a good opportunity to comply with Secretary Hay's request, and I so told Mr. Rosenthal. At the same time I told him that I did not wish an extravagant price paid for the picture; that my understanding was that about $800 should purchase a portrait. I notice Mr. Rosenthal says $850, and he may be right about that. I knew that various prices had been paid for such pictures, and I wished it to be understood that mine was certainly not to exceed the average price. Mr. Rosenthal painted the picture. It was approved and placed in the State Department, according to my recollection, early in 1904. I assumed, of course, that Mr. Rosenthal had been paid for the picture in accordance with our understanding, and heard no more of it until sometime in the spring of 1906 or 1907. I can not recall the exact date. Mr. Rosenthal called at my house and said that Mr. Denby, chief clerk of the Department of State, had shown him a voucher signed by himself, receipting for something over $2,000-I can not remember the exact sum-for the painting of my portrait, and said that he had received from Col. Michael, clerk of the State Department at the time the picture was painted and placed in the department, only the sum of $850. I told Mr. Rosenthal that I would look into the matter, and thereupon, the same day or the next day, I visited the State Department, saw Mr. Denby, and was told by him that such a voucher as Mr. Rosenthal had described was on file in the department. I then asked to see Mr. Root, and was advised that the Secretary was at his house. I then drove to Secretary Root's house and saw him there, and stated to him what Mr. Rosenthal had told me. The Secretary said that he would have the matter investigated at once. Some time thereafter I was informed by the Secretary that upon looking into the matter it was his understanding that the voucher to which Mr. Rosenthal had referred included matters in addition to the payment for my portrait. I heard no more of the matter until on the evening of May 29, when I read an account of Mr. Rosenthal's testimony before your committee in the Washington Evening Star. The foregoing statement covers my knowledge of the facts of the case so far as I know. If at any time anything further is desired of me, I shall be pleased to furnish it to the committee if it is within my power. Respectfully, yours, Whereupon the committee adjourned. WILLIAM R. DAY. HEARINGS BEFORE THE SUBCOMMITTEE OF THE COMMITTEE ON EXPENDITURES IN THE STATE DEPARTMENT HOUSE OF REPRESENTATIVES ON HOUSE RESOLUTION NO.103 TO INVESTIGATE THE EXPENDITURES IN JUNE 13, 1911 WASHINGTON GOVERNMENT PRINTING OFFICE EXPENDITURES IN THE STATE DEPARTMENT. ¡Committee room, basement, main building. Telephone 278. Meets on call.] S. H. DENT, JR.. Alabama. CHARLES R. DAVIS, Minnesota. WILLIAM W. WEDEMEYER, Michigan. |