In

that I have a right to take exception, as not pertinent or proper; and yet as reticence may be misjudged, I will answer frankly. The sales of Smith Brothers & Co., in Boston, for the year to February, 1861, were about $150,000. 1862 we opened a branch house in New York, 28 Warren street. Since 1861 our sales in our regular business to February, 1864, have been from $600,000 to $700,000, and our sales to government meanwhile about $1,000,000. The profits on the former I believe to have equalled the profits on the latter, the percentage of profits having been relatively to the sales much larger upon our ordinary business than our government business. With reference to our said sales of one million dollars' worth to government, it should be stated that I estimate from $400,000 to $500,000 of said sales were sales under our formal contracts with the bureaus of the Navy Department under their published advertisements for bids. I believe that the average per-centage of profit on said sales has not exceeded a fair mercantile rate, while to the government, in the aggregate, they have been extremely profitable and advantageous. Under the last contracts which we made with the government, about August, 1863, amounting to about $150,000, before the delivery of the merchandise was completed, such had been the advance on merchandise that there must have been a saving to the government of from $40,000 to $50,000 by the contracts. We are now delivering iron to government under that contract at about $95 per ton that is worth $140 readily in the market. During the whole period of our contract business with the department, there has been such constant advance upon merchandise as to make the contracts advantageous to the government.

Under the old contract system, which was amended through our efforts by the act of March 3, 1863, there were most anomalous deliveries, as I understand has been shown by Mr. Ellis. For said deliveries we were in nowise responsible, and as to profit or loss were entirely independent of our will in the matter. The contracts were obligatory upon us to deliver merchandise as demanded. We delivered according to the formal requisitions upon us, and for the results the system was responsible.

With reference, further, to the sales to government, about $200,000 to $250,000 have been obtained by successful bids in response to public advertisements, and were principally for sales of pig iron. The sales of pig iron also by us to the government, under these public advertisements, were exceedingly advantageous to the government. On one contract for pig iron, at $25 per ton, we delivered large quantities when it had advanced to from $33 to $38 per ton. The balance of said amount of sales to government represents the amount of open purchases received by us during a period of three years, and in relation to a large number of contracts.

Question. Is Mr. Norton, navy agent, in any way concerned in your firm as a silent partner, or otherwise, and has he ever been; and has he or is he to receive any gratuity, commission, or compensation from you, or through your agency ? Answer. He is not interested in our house as silent partner or otherwise, nor has he ever been; and he has not received, and is not to receive, from our house or through its agency, any gratuity, commission, or compensation for the business we have received through his agency.

Question. Did you sell a quantity of files to Mr. J. L. Savage? If yea, what was the bargain and what the result?

Answer. I did not. No files were ever sold to Mr. J. L. Savage by the Boston house of Smith Brothers & Co. Mr. Foster, the managing man for the New York house of Smith Brothers & Co., did sell Mr. Savage files at sundry times, as per statement of account current here presented from the duplicate ledger of the New York house. Mr. Foster has been only a nominal partner of Smith Brothers & Co. since 1861, the copartnership having then expired. Since that time, B. G. & F. W. Smith have been the only active Rep. No 99-13

responsible partners in the house, furnishing all capital and taking all risks. Said Smith Brothers have managed entirely and exclusively all sales to government direct. Mr. Foster, as New York manager, sold files to Mr. Savage and many other parties under the agency in New York. Concerning the question addressed to Smith Brothers & Co., on this point, I beg leave to place herewith the deposition of Alonzo A. Foster, of Brooklyn, N. Y.

Question. Were not those files, or a portion of them, after being returned to you after being rejected at the Washington yard, sent to the Charlestown navy yard and received?

Answer. They were never returned to Boston, or to Charlestown, or to Smith Brothers & Co., at all. I beg leave, as proof of this, to refer to a certified leger account of J. L. Savage with Smith Brothers & Co., showing that he never returned but $23 75 worth of merchandise, and also the letter of J. L. Savage, of September 16, 1862, stating "I have concluded to keep the files and turn them into stock, and work them off in that way. I enclose draft on New York for balance, $394, which please acknowledge." The original letter is here.

"I, Alonzo A. Foster, of Brooklyn, in the county of Kings, State of New York, hardware merchant, of the age of thirty-five years, on oath depose and say, in answer to the several interrogatories and cross-interrogatories annexed, that I will testify the truth, the whole truth, and nothing but the truth.

"Question 1. Did you sell files to J. L. Savage, for the Washington navy yard, which were rejected?

"Answer. Yes.

'Question 2. Did you visit the Washington navy yard to inquire why those files were rejected?

"Answer. Yes.

"Question 3. What was said?

"Answer. Mr. Wilson and others objected to the cut of the files, and remarked that if the cut could be perfected, he would consent to another trial. He was pleased with the general appearance of the files.

"Question 4. What disposition was made of the files?

"Answer. Do not know.

Question 5. Were they returned to Boston, and sent to the Charlestown navy yard?

"Answer. They were not returned to us, (S. B. & Co., New York.)

Question 6. Did you say that if you had greased the wheels' the files might have been accepted?

"Question 7. When were the files sent to the Washington navy yard sold? "Answer. Sold to Mr. J. L. Savage July ninth, (9th,) eighteen hundred and sixty-two, (1862.) Have no knowledge when they were sent to the Washington navy yard.

Question 13. Did you examine all the lot of files, or see all the lot? "Answer. Did not see any particular lot?

"Question 14. Did you say anything about Charlestown?

"Answer. Did say that the Boston house had sold Whipple files into the Charlestown navy yard.

"Question 15. Did you say that they could be passed there? "Answer. No recollection of saying so.

"Question 16. Did you have a second interview in the Washington yard? "Answer. I did, on the same day; had general conversation with Mr. Wilson at his office.

"STATE, CITY, AND COUNTY OF NEW YORK, ss:

"ALONZO A. FOSTER.

"Alonzo A. Foster, being duly sworn, says that he has read the foregoing deposition by him subscribed, and the answers to the several interrogatories therein propounded, and that the same is, and the said several answers to interrogatories are, true.

"ALONZO A. FOSTER.

"Sworn and subscribed before me this 4th day of May, A. D. 1864. [SEAL.] "J. F. HARRISON, "Notary Public, New York City."

"WASHINGTON, D. C., September 13, 1862.

"GENTS: I have concluded to keep the files and turn them into stock, and work them off in that way.

"I enclose draft on New York for the balance, $394; which please acknowl ́edge, and much oblige, yours truly,

"Messrs. SMITH BROTHERS & Co."

"JOS. L. SAVAGE.”

Question. Did you not intimate to Mr. Savage that they might have been received at the Washington yard if he had "greased the wheels," or something to that effect?

Answer. The interrogatory has reference solely to Alonzo A. Foster, and is answered by his deposition. I say, no, I never had any conversation with Mr. Savage about the files, and Mr. Foster denies that charge in his deposition. Question. Is Mr. Norton interested with you in any business operations other than furnishing supplies to the government?

Answer. He is not, of any nature whatever, nor has he ever been.

Question. Is Mr. Merriam, master machinist in the Boston yard, interested with you in any business operations, or is he related to you by marriage or otherwise?

Answer. Mr. Merriam is not and never has been interested with Smith Brothers & Co. in any business operations, nor is he related to us by marriage or in any other way.

Question. Have you ever consulted with or been consulted by the master workmen in the navy yard in reference to getting up the schedule for annual supplies?

Answer. I think positively never. The only instance of the kind, if any, was with reference to the schedules for yards and docks for the year 1861-'62. I may have seen the schedules of those either in Mr. Billings's office or in that of the master machinist or naval storekeeper. I remarked at the time they were being prepared, to Mr. Merriam and Mr. Billings, the civil engineer, that, so far as Smith Brothers & Co. were concerned, they wanted straight honest schedules for precisely the government wants.

Question. Have you ever seen the schedules before they were forwarded to the bureau? If yea, did it not give you an advantage in bidding over others? Answer. If I have seen them, as above stated, I consider that I obtained no advantage over any other parties in bidding.

Question. Have you not received from the navy agent orders to furnish sundry tools, pumps, &c., and repairs of same? If yea, have you furnished them at the manufacturer's price? If not, what profit did you charge on the manufacturer's price, and whom did yon employ to furnish such tools, or any tools; and could not the navy agent have procured them at the market price as well as you?

Answer. We have furnished several times assorted tools, &c., for vessels on requisitions which may have had therein items for repairs, &c. In such case we have charged only very moderate commissions, varying much according to the article, the trouble, expense, &c., attending the finding and buying thereof. Sometimes the delay of an article has caused us a large loss of interest. These assorted requisitions have been the most troublesome and expensive part of our business, and the commissions thereon, which we believed would average only ten to twelve and a half per cent., have not fairly compensated us as merchants. We think it would have been impracticable for the navy agent to fill such requisitions at all without the help of those experienced in the specialty of navy supplies, and without the outlay of very much time and trouble. We will add that, upon a careful investigation of our business at the close of the last business year, we found that our sales to government had averaged a very much less percentage than sales of a similar character in our ordinary business, and which latter sales were attended by very much less care, labor, vexation, and responsibility.

By Mr. Doolittle :

Question. Some of your bids have been shown in the course of the examination in which you bid for Scotch pig iron, say, one dollar a ton, while for American iron you bid thirty-six dollars a ton. At the time of making this