LEGAL REPRESENTATIVES OF CHAUNCEY M. LOCKWOOD.

MARCH 24, 1900.—Ordered to be printed.

Mr. WARREN, from the Committee on Claims, submitted the following

REPORT.

[To accompany S. 420.]

The Committee on Claims, to whom was referred the bill (S. 420) for the relief of the legal representatives of Chauncey M. Lockwood, have considered the same and submit the following report:

Bills similar to the one under consideration have been favorably reported and passed in the Senate in five previous Congresses, and the item was included in the omnibus claims bill of the Fifty-fifth Congress.

During the first session of the Fifty-fourth Congress the Senate Committee on Post-Offices and Post-Roads reported as follows, and your committee adopt the same as their report and recommend that the bill do pass:

The Committee on Post-Offices and Post-Roads, to whom was referred the bill (S.713) for the relief of the legal representatives of Chauncey M. Lockwood, haveing had the same under consideration, beg to submit the following report:

A similar bill has been under consideration at four previous sessions, at each of which it was reported favorably, and has passed the Senate on four several occasions. During the first session of the Fifty-third Congress the following report was made by this committee, being Report No. 22, first session Fifty-third Congress, which report is hereby readopted by this committee. The report is as follows:

[Senate Report No. 22, Fifty-third Congress, first session.]

The Committee on Post-Offices and Post-Roads, to whom was referred the bill (S. 109) for the relief of the legal representatives of Chauncey M. Lockwood, having had the same under consideration, beg to submit the following report:

A similar bill has been under consideration in the committee at three previous sessions, at each of which it was reported favorably, and has passed the Senate on three several occasions. During the first session of the Fifty-second Congress the following report was made by this committee, being Report No. 195, first session Fifty-second Congress, which report is hereby readopted by this committee. The report is as follows:

[Senate Report No. 195, Fifty-second Congress, first session.]

The Committee on Post-Offices and Post-Roads, to whom was referred the bill (S. 527) for the relief of the legal representatives of Chauncey M. Lockwood, having had the same under consideration, beg respectfully to submit the following report: A similar bill was before your committee in the last Congress. It was reported

favorably January 20, 1890, and subsequently passed the Senate without objection. Accompanying the former bill was a report (No. 122, first session Fifty-first Congress), which your committee readopt, and report back the bill (S. 527) without amendment and recommend its passage.

[Senate Report No. 122, Fifty-first Congress, first session.]

The Committee on Post-Offices and Post-Roads, to whom was referred the bill (S. 928) for the relief of Chauncey M. Lockwood or his legal representatives, having had the same under consideration, respectfully report as follows:

Five favorable reports have been made heretofore from this committee in reference to this claim, and no adverse reports. The facts are fully and correctly set out in a report, No. 49, second session Forty-second Congress, and which is now adopted as the present report of this committee. It is as follows:

The Committee on Post-Offices and Post-Roads, to whom was referred Senate bill 241, for the relief of Chauncey M. Lockwood, report as follows:

That on the 9th day of March, 1868, the Postmaster-General advertised for proposals to carry the mail over Route No. 16637, from Salt Lake, in Utah Territory, to The Dalles, in the State of Oregon, a distance of 875 miles, six times a week, and back. On the 13th day of June, 1868, the bids were opened, and that of C. M. Lockwood being the lowest was accepted, and the contract awarded to him for the sum of $149,000 per annum, the service to commence on the 1st day of October, 1868, and terminate on the 30th day of June, 1870. On the 24th day of August, 1868, Mr. Lockwood executed a contract, with sureties, as required by law, and carried the mails from the 1st day of October, 1868, to the 17th day of June, 1869, when the service was curtailed and made to begin at Indian Creek, or Kelton, a point on the Central Pacific Railroad, and the sum of $18,732 per annum was deducted from the pay, leaving it at $130,278 per annum.

On the 13th day of June, 1868, when the contract was awarded to Mr. Lockwood, an act of Congress, approved March 25, 1864, was in force, whereby it provided "that all mailable matter which may be conveyed by mail westward beyond the western boundary of Kansas, and eastward from the eastern boundary of California, shall be subject to prepaid letterpostage rates." The object of this law was to compel all printed mailable matter to be carried in seagoing steamers by way of the Isthmus of Panama to San Francisco, and thus lessen the weight of the overland mails. On the 25th of June, 1868, an act of Congress was approved repealing the above-recited section, to take effect on the 30th day of September, 1868, and the consequence was that all printed mailable matter, which before that time had been transported by sea to the Pacific coast, as well as that sent eastward from the Pacific States and Territories, was transferred to the overland route, and its aggregate bulk and weight vastly increased. The same effect followed the repeal of that law on the route from Salt Lake to The Dalles, though not to the same extent as on the overland route to California and Nevada.

It may not be inappropriate here to state that on the 13th day of June, 1868, the same day the contract was awarded to Mr. Lockwood to carry the mails from Salt Lake to The Dalles, the Post-Office Department entered into a contract with Carlton Spaids for carrying the mails from Cheyenne, in Dakota Territory, to Virginia City, in Nevada, for the sum of $335,000 per annum. When Congress, on the 25th day of June, 1868, repealed the act of March 25, 1864, to take effect on the 30th of September following, Mr. Spaids refused to comply with his contract, and the Post-Office Department, in order to have the mails properly carried, was under the necessity of accepting, and on the 21st day of October, 1868, did accept, the proposition of Wells, Fargo & Co., who offered to " carry the mails daily for one year from date, or until the two railroads meet, at the rate of $1,750,000 per annum, subject to reductions pro rata for every section of 50 miles of railroad completed and reported to the PostOffice Department ready to carry the mails."

Charges were afterwards made that the Postmaster-General acted improperly in entering into the contract with Wells, Fargo & Co. for so large a sum of money over and above the amount agreed to be paid to Carlton Spaids; but upon an investiga tion of the matter by the Committee on Public Expenditures, in the House of Rep resentatives, on the 27th day of February, 1869, that officer was exonerated from all the accusations preferred against him. Among other things, that committee, in their report, say:

On June 25, 1868, Congress repealed the act of March 25, 1864, to take effect on the following September 30, and thereby opened this route to the entire mails of the Pacific coast. This was done against the earnest remonstrance of the chairman of

the Committee on the Post-Office and Post-Roads of the House (Mr. Farnsworth), who professed to represent the views of the Post-Office Department. He objected to the repeal of the law that it would vitiate or interfere with the contract already made, and would probably cost the Government at the rate of $900,000 a year for the whole distance, by throwing so much mail matter upon this difficult and expensive route.

"It very soon became manifest that Mr. Spaids would not carry out his contract according to its terms. Indeed, he could not be expected to do it. His bid was based upon the letter mail alone, and the stipulated compensation was adequate to that. He had bound himself to carry all the increase, but when that increase was caused by the act of the Government after the date of his contract, and amounted to 400 or 500 per cent, he was certainly not morally bound to fulfill his contract, if, indeed, he could be legally held to it.

"Under these circumstances two very proper courses of conduct were open to Mr. Spaids: First, to throw up his contract as soon as the act of Congress came to his knowledge; or, second, to carry the mail with the increase and to look to Congress for an appropriation to pay him the increase."

When it was proposed to repeal the act of March 25, 1864, Mr. Farnsworth, the chairman of the Committee on the Post-Office and Post-Roads, earnestly opposed the measure, for the reason that its repeal would greatly increase the cost of carrying the mails. His remarks during the discussion, as reported in the Daily Globe of June 20, 1868, are as follows:

"Mr. FARNSWORTH. If I can have the attention of the House for a moment I will state briefly the points about this bill. The House passed a bill removing the restriction which was imposed by the act of 1864, I believe, which required that printed matter should pay letter rates between the western boundary of Kansas and the eastern boundary of California, where it had to be carried by stages, except that newspapers, magazines, and periodicals are carried there, as everywhere else, to regular subscribers from the office of publication. The present contract expires in the fall, in October, I believe. The Senate have amended the bill so as to make it take effect in the fall, and sent it back to the House.

"Upon examination of the bids put in at the Department for carrying the mails for the next four years, and on inquiry with reference to the intentions of the parties who have bid for carrying the mails-the bids for the letter mails being already in-we find this fact: That the difference of expense will be about $1,000,000 if we remove this restriction and allow the publishers of books, magazines, etc., to send by mail their packages to dealers in the various places in these remote Territories. The House will see at a glance that they would load down the stagecoaches and make the mails very bulky and heavy, and the contractors can not afford to carry this immense load of matter at the same rate at which they are now carrying the letters and newspapers, etc., to the regular subscribers.

"The Committee on the Post-Office and Post-Roads considered this question, and also, I believe, considered it in conjunction with the committee on the part of the Senate, on one occasion when I was not present, at the Post-Office Department, a few days ago, and they instructed me to make the motion, when this bill was reached, to refer it to the Committee on the Post-Office and Post-Roads. They came to the conclusion that it is not worth while to saddle the Department with this extra expense at present."

Again:

"Mr. FARNSWORTH. I am only desirous the House should understand this matter. I have here now the figures showing the difference in these bids. These contracts before were let very soon. The contractors must make provision for their forage before the season is far advanced. There are five bids for carrying this mail. Wells, Fargo & Co., $1,300,000, with the understanding that they are to carry printed matter if we pass this bill. There are four other bids, and the highest of which is $460,000, being $900,000 less than the bid of Wells, Fargo & Co. These other bidders made these bids with reference to the law as it is now, excluding heavy mail matter. The House will understand that the law now does not exclude newspapers and periodicals to regular subscribers. It cuts a little hard on the book trade and the publication offices, the men who are dealing in these articles. The question for the House is whether we shall now add this $900,000 to the expenses of the Department or wait a little. As fast as this railroad is completed these things are all carried, and in the course of a year very likely we may be able to amend the law without saddling this amount of expense upon the country. I now call the previous question."

It will thus be perceived that the chairman of the House Committee on the PostOffice and Post-Roads, the Postmaster-General, and the House Committee on Public

Expenditures were all of the opinion that the act of Congress repealing the act of March 25, 1864, vitiated the contracts already entered into, and absolved the contractors from their performance. And, indeed, this would seem to be a correct inference, judging from well-settled principles of law. A contract is to be interpreted and enforced in accordance with laws existing at the time of the agreement; and the law in force at the time of making is always considered as entering into and forming part of the contract itself. Judged by this standard, Chauncey M. Lockwood agreed virtually to carry only the letter mail on Route No. 16637 during the term of his contract; and although in that contract he obligated himself "to transport the whole of said mail, whatever may be its size, or weight, or increase, during the term of his contract," yet it must be construed to be the natural increase, such as would have taken place had the law of 1864 remained unrepealed. It is true Mr. Lockwood did not, like Mr. Spaids, avail himself of his right to be absolved from the performance of his contract with the Post-Office Department, but he is none the less entitled to payment for the additional expenses incurred by him in the faithful fulfillment of it.

In support of his claim for additional compensation Mr. Lockwood has presented his sworn statement, supported by the affidavits of H. J. Waldron, B. B. Bishop, B. P. Patterson, E. C. Brainard, W. F. McCrary, and Thomas E. Logan, postmasters along the mail route, and also the affidavit of John Hailey, tending to prove that the mails carried were more than doubled in amount after the 10th of October, 1868. Copies of these affidavits are hereto attached and made part of this report, and also a copy of a communication addressed by the Postmaster-General to Hon. C. Cole, United States Senator, dated May 4, 1870, commenting on these affidavits. It was hardly necessary to establish, by testimony, the fact that the mails were more than doubled in bulk and weight after the repeal of the act of March 25, 1864, for it is admitted by the Post-Office authorities, and known to everyone conversant with postal affairs, that at least four-fifths of all the mailable matter on any route consists of documents, books, periodicals, newspapers, and other printed material. The claimant, Mr. Lockwood, has also made a statement, verified by his own oath, and supported by the affidavits of John Hailey, Hill Beachy, James R. Robbins, C. C. Huntley, Bradley Barlow, and F. P. Sawyer, tending to show the amount of stock, material, and expense of carrying the mails on route 16637 under the contract as made on the 13th day of June, 1868; and also the actual expenses of carrying the same after the repeal of the act of March, 1864. This statement and the affidavits in support thereof are hereto attached and made a part of this report. From that statement it appears that the additional expenses incurred in carrying the increased mail matter were much greater than the amount claimed in Senate bill 241. It must be admitted, however, that the statement of expenditures is quite too general to enable the committee to arrive at an accurate conclusion as to the exact amount of additional cost and expense which Mr. Lockwood had to pay on account of the repeal of the act of 25th March, 1864. Nor do the affidavits before referred to throw much additional light upon the subject. They do not give a detailed statement of what, and how much, Mr. Lockwood had to pay in consequence of the repeal of the act referred to. They merely state, in a general way, that they are acquainted with the route over which the stagecoaches ran; and, from their knowledge, they believe that the statement of Mr. Lockwood is correct. It would be much more satisfactory to the committee if the items, or at least the principal items of expenditure, had been set forth in the affidavits. They are satisfied that a very considerable amount of money is justly and equitably due to the claimant; but how much they are unable to determine with anything like exactness.

It may not be amiss here to state that at the time Mr. Lockwood entered into his contract to carry the mails the Government was paying $150,000 per annum to the Atlantic and Pacific Mail Steamship Company for carrying the printed mail matter three times a month to San Francisco, which amount was saved by the repeal of the act of March 25, 1864, while the additional burden of carrying this printed mail matter was imposed upon Lockwood and upon Wells, Fargo & Co., who succeeded to the contract of Spaids.

It may be further stated that the contract price for carrying the mails over the route from Salt Lake to The Dalles, both before and after the contract entered into by Lockwood, was considerably more than was paid to him for the same service. From October 1, 1866, to September 30, 1868, the pay of the contractors, Ben. Holladay and Wells, Fargo & Co., was $316,000 for six-times-a-week service, and this, too, while the printed mail matter was carried by sea.

As before stated, by the terms of the contract between the Post-Office Department and Mr. Lockwood, entered into on the 13th day of June, 1868, to commence on the 1st day of October, 1868, and terminate on the 30th day of June, 1870, he was to be paid at the rate of $149,000 per annum for carrying the mails from Salt Lake to The

Dalles, but on the 17th day of June, 1869, an order was made curtailing this route to begin at Kelton, decreasing the distance 110 miles and the pay of the contractor $18,722, leaving Mr. Lockwood's pay $130,278 for six-times-a-week service over 765 miles of road, although it is said that he carried the mails seven times a week instead of six, as required by the terms of his agreement.

Under advertisement of September 30, 1869, this route was advertised from Kelton to The Dalles, 765 miles and back, six times a week, and was let to Messrs. Parker, Fuller & Barlow, at $192,000 per annum. On the 17th day of June, 1871, one additional trip per week was ordered, and the contractors allowed $32,000 additional per annum, making the pay $224,000 for seven-times-a-week service.

It is true that the compensation to be paid to Mr. Lockwood depends upon the terms of his own contract, and not upon the amount paid to his predecessor nor to his successor; and yet, after all, where additional burdens were imposed on him by act of Congress, not contemplated when the contract was made, it may well be said that in equity he ought to be paid something like the same compensation as has been paid to his successor for a like service over the same route.

The committee therefore recommend that the amount of the difference between the rate per annum received by said Lockwood and the rate per annum received by the present contractors for carrying the mails over the same length of route be paid to C. M. Lockwood during the time he carried the mails under his contract with the Postmaster-General.

Affidavits.

DALLES CITY, OREGON, October 11, 1869.

I, H. J. Waldron, postmaster at The Dalles, Oregon, do hereby certify that, to my own knowledge, the weight and bulk of United States mail matter over mail route 16637, from Salt Lake City, Utah Territory, to The Dalles, Oregon, was, within ten days after the 1st day of October, 1868, increased, has continued to be more than double the amount daily, and oftentimes a much greater increase, up to this date, in consequence of the paper and documentary mail having been thrown upon this route, which had not been at any time transported over this route previous to the 1st day of October, 1868, being the date of commencement of service under contract between Chauncey M. Lockwood and the United States Post-Office Department for the transportation of United States mail matter over the route aforesaid. And I further certify that said service and transportation has been performed since the first day of October, 1868, up to date, with regularity and dispatch.

H. J. WALDRON,

Postmaster, The Dalles, Oregon.

UMATILLA, OREGON, October 12, 1869. I, B. B. Bishop, late postmaster at Umatilla, Oregon, do hereby certify that, to my own knowledge, the weight and bulk of the United States mail matter over mail route 16637, from Salt Lake City, Utah, to The Dalles, Oregon, was, within ten days after the 1st day of October, 1868, increased, has continued to be more than double the amount daily, and oftentimes a much greater increase, up to this date, in consequence of the paper and documentary mail having been thrown upon this route, which had not been at any time transported over this route previous to the 1st day of October, 1868, being the date of commencement of services under contract between Chauncey M. Lockwood and the United States Post-Office Department for the transportation of United States mail matter over the route aforesaid. And I further certify that said service and transportation has been performed since the 1st day of October, 1868, up to date, with regularity and dispatch.

B. B. BISHOP,

Late Postmaster at Umatilla, Umatilla County, Oregon.
L. H. ADKINS,
Postmaster from August 7, 1869, at Umatilla, Oregon.

LA GRANDE, OREGON, October 10, 1869.

I, B. P. Patterson, postmaster at La Grande, Oregon, do hereby certify that, to my own knowledge, the weight and bulk of United States mail matter over route 16637, from Salt Lake City, Utah, to The Dalles, Oregon, was, within ten days after the 1st