By Senator PATTERSON: Q. Has it been customary under preceding administrations of the custom-house to give to certain men the entire right to farm out this general-order business?-A. If you will let me go back a little, when this system was first adopted, prior to the adop tion of this system, the Government was engaged in storing these goods; they found it a losing business; and it was under Mr. Redfield's administration that the entire general-order business on the North River was given to Mr. Odell. After Mr. Schell came into the collectorship he gave the business to my firm; we retained it until Henry A. Smythe came into the collectorship. The idea, in designating stores up to that time, was to designate a store that was conveniently located to the landing of these goods, and it was never regarded as Government patronage properly. In fact, for eight years our stores were the only stores in the district that were receiving general orders. When Mr. Smythe came in he thought it was "a big plum," as he termed it, and commenced negotiating for the sale of it. Q. Directly, in person ?-A. Yes, sir; without any concealment either. He started off on a new tack, and since then it has been a matter of bargain and sale, and all I can say is that it is a very disgraceful thing, and compels the merchants to pay a very high price for the storage of goods. Q. For, of course, this comes out of the merchants ?-A. Of course it comes out of the merchants. By Mr. SHELDON : Q. Do you know any other matter connected with this subject from your own knowledge, that you have not stated? If so, please state it.-A. I do not know anything in regard to any negotiations. I simply know, as I remarked a moment ago, that the selling of this business necessitates the charging of the merchants a higher price for storage, and I think that the prices are more extortionate now than I have ever known them. I thought I understood the principle of charging pretty well, but I have never been quite up to the ruling rate, as it is now. By Senator PATTERSON: Q. Please state what is the average charge for storing goods.-A. The Chamber of Commerce, in 1857, established rates that would govern storage men. On those rates they allow 60 per cent. advance, I think, to the present charging. Those are supposed to be the rates established for general-order stores. All the bills that I have ever seen of this concern, as at present conducted, have been at least three times those rates. They would average that. I have frequently seen those bills. Q. Do you think that these exorbitant charges have any tendency to drive the importation of foreign merchandise to other ports?-A. I have heard merchants state they could import cheaper by way of other ports. There is another thing I would like to mention; as I told you before, the practice heretofore has been to locate some store convenient to the landing of these goods, and designate that store for a general-order store. The business is now being conducted at 371 Washington street, and up in LeRoy street, on the corner of West. The store in Washington street is the one lowest down town, and I think that this is at least a mile and a half away from the landing of a great many of these goods; that, of course, subjects the merchants to an extra charge for cartage. By Mr. SHELDON: Q. Does it not subject the goods to the risk of damage in being carted through storms?—A. Well, I think so; though as a rule they don't discharge in stormy weather. Goods, however, are frequently discharged in a storm, or frequently at night. Steamers frequently work all night. But, for instance, the cartage to a conveniently located store in the lower district of the North River would be 50 cents a cart-load. Taking it to this, 371 Washington street, is 84 cents a cart-load. Of course, that is an extra expense to the merchants. By Senator PATTERSON: Q. Will you state whether you ever paid, or were required to pay, anything to any one else except to Mr. Leet?-A. Never in the world. By Mr. SHELDON: Q. Is there anything connected with the conversation between you and Colonel Leet at the time he raised his prices, that you think would be of importance to the committee?-A. No, sir; our conversation was extremely brief upon that point. Q. I understood you to say he did not designate any sum?-A. No, sir; I want to state that part of the agreement was that we were to pay him the fixed sum, and then, if the storage amounted to over $10,000, we were to divide all in excess of that. It did not amount to anything in excess of that, but he expected that it would. Q. In other words, the effect of your agreement was that you were to pay him at least 50 per cent. ?-A. We were to pay him $5,000. Q. That would have amounted to at least 50 per cent. ?-A. Well, yes. We were to pay him more if it did amount to more than $10,000. By Senator PATTERSON : Q. Do you know that other parties paid him for this same privilege as you did?—A. I have understood that they paid somebody. I understood that on the East River they paid $3,000. Q. To Mr. Leet?-A. I do not know to whom. Q. Let me ask if there is anything within your knowledge on this subject that ought to go to the committee for the good of the merchants, or the good of the Government, or the country? We would be glad, if there is, to have you state it; our only object is to get at the facts for this purpose.-A. I do not know whether you have heard it from other sources, of the irregularity in this store in Washington street. The business, when it was taken from me, was ostensibly given to a man of the name of Horton. The stores were bonded in his name; the bonds were given for the faithful performance of Horton's duty. He only remained in the store, as I understand it, for a few weeks and then left it, and I learn on good authority that it was only two weeks ago that new bonds were given for the new proprietors of that store, so that for some four, five, or six months those stores were not under bond-the Government had no security whatever. By Mr. SHELDON: Q. Who had the charge of those stores ostensibly during this four or five months?— A. Leet & Stocking. By Senator PATTERSON: Q. Was not the bond that Horton gave sufficient?-A. It guaranteed Horton's conduct. If you will dissect the matter you will find that there was no security whatever after he went out. That was allowing a privilege which I have never known to be allowed heretofore. ALEXANDER T. STEWART Sworn: By Senator PATTERSON: Question. Mr. Stewart, we are anxious to get at the merits and demerits of this “general-order system" which is now in vogue. Can you give to the committee any information on that subject? If you can, we shall be happy to hear from you.-Answer. I would state that I am, as an importer, very much opposed to the present "generalorder" system, for the following reasons: First, the great difference in expense, or, I might say, in the charges made at present, and those previously made. When the Cunard stores and the Hoboken stores had the general-order business, if a steamer arrived at times when entry could not be made at the custom-house, the agents gave the importers forty-eight hours in which to make their entries. There was no charge for that time. At present, when vessels arrive at these stores or docks, I have to discharge immediately on arrival; no time is given to make entries. The goods are taken immediately and carted to a general-order store in the city of New York. A charge is made for this cartage, and, in that store, for storage for a month, although the goods may not remain there one day. This amounts to an average of $1 50 a package, which is so much taken from the pockets of the importers unnecessarily. Again, when goods so situated are, in part, to be entered for consumption and in part for bonding, the price paid for the bonded goods (that is $1 75 per case, which is the charge of the parties now having the general-order business) is so much money lost to the importer. For example, I import one hundred cases of goods, twenty cases of which I desire to enter for consumption, and eighty for bonding. All those one hundred cases have by the system now in vogue to go under "general order" in the city of New York, and I have to pay on each of them, by the present rates, $1 50 or $1 75 per case or bale. As the stores now used for the general-order business are, on account of their surroundings, considered to be very unsafe, and for that reason an extra premium of insurance is charged for goods that go into them, I feel obliged to remove them immediately to some reliable bonded warehouse, and have, therefore, to pay $1 75 per case additional on those eighty cases, which I would not have to pay if the general-order business had been retained at the Jersey City and Hoboken warehouses; in other words, any goods discharged under general order into the Jersey City or Hoboken warehouses which were intended to be warehoused or bonded there, incurred no extra expense in consequence of being discharged under general order. I now exhibit to the committee a diagram of the location of the principal general-order warehouse, and they will see from its surroundings that it is a most unsafe place to store merchandise. [Diagram shown.] The building extends from Greenwich to Washington streets, between Beach and North Moore streets. On the southerly side of it is a cotton warehouse-a very dangerous kind of business; on the upper side is also a cotton store, an open yard, and a cotton and general merchandise store, the arches of which connect with the general order store. The occupation of various other buildings upon the same square of ground is also shown upon the diagram. Some of them are dwellings occupied by a promiscuous class of people, some of them liquor stores, &c., all situated in à locality very desirable to avoid after dark. [The above diagram marked by the committee, "Exhibit A."] I furnish, also, a diagram of the general-order store now in use on the northeast corner of Leroy and West streets, on the block bounded by Leroy, West, Washington, and Morton streets. It will be seen that on the northerly side of this building the Pennsylvania Coal Company's yards and sheds are located, and an open space. In the rear there is a three-story packing-house. The location is one that respectable people generally avoid as much as possible. [This diagram marked by the committee "Exhibit B."] We have the greatest difficulty in getting insurance at reasonable rates on goods stored in either of these warehouses, owing to their exposed condition. By Senator PATTERSON: Q. What are the charges made by Leet & Co. under the present system?—A. $1 50 and $1 75 per case or bale. Q. Have they, in any instance, charged more than that?-A. Yes, sir; $2. Q. Have you allowed this latter charge?-A. No, sir. Q. Have they entered into an agreement with you, that in no instance the charge be more than $1 75?-A. Yes, sir. Q. What were the charges under Bixby & Squire ?-A. Under Squire, $1 20 for the same service; under Bixby, 90 cents. Q. How does that compare with the charges at the Cunard and Hoboken warehouses under the old system?-A. I think that under the old system the charges were 75 cents, 90 cents, and $1. All the information sought by your questions will be found in a table which I have had prepared, and now produce, marked “C." Q. What proportion of your goods placed in the Cunard and Hoboken warehouses, under the old system, were usually withdrawn within the forty-eight hours, and therefore paid no storage?-A. I should think about one-third. It was not necessary, however, for us to make our entries of goods in those stores within forty-eight hours; they were liberal, and allowed it to be done within a reasonable time after that, without charge. Q. Do you think that these increased charges have a tendency to drive business from New York to other ports of entry?-A. If they have not, I think they will have. Q. Is there greater security in the warehouses now used than in the warehouses at the Jersey City and Hoboken docks?-A. No. On the contrary, the Cunard and Hoboken stores were considered more secure, beyond all comparison. They were more safe, and we had greater facilities in getting our goods. During the past ten years, in warehouses in the city of New York, we have lost by theft about $40,000 without recognized liability on the part of any one whereas, at the Cunard and Hoboken warehouses we have never lost $1. There is another trouble with the present general-order stores. They being so crammed with goods, it is difficult to find, as speedily as desired, the cases ordered for examination in the public store. Q. What effect does the present system of general-order business have upon the action of the merchants, if any —A. Formerly, when the bonded warehouses doing generalorder business were in charge of the authorized agents of responsible steamship lines. and were situated in localities known to be safe, the merchant was in no haste to get his goods from the custody of the Government, and the result was that, a few years ago, to accommodate the importers, eight or ten stores were required to do the generalorder business. Now, that business is limited to two stores, and the reduction arises. in my opinion, from the fact that the importer is not willing to trust his goods to the custody of the Government officers one moment more than he can help, because these warehouses are such as to excite the suspicion of danger, besides it being very difficult to procure insurance on the goods stored in them. The merchant prefers to withdraw his goods at the earliest moment, so that now these two stores do the whole work, where formerly eight or ten were required. Q. Does the Government, in your judgment, derive any advantages under the present system which it did not under the old?-A. None whatever; the present system can only be used to annoy and vex, and deplete the pockets of the importers. Q. What remedy would you propose?-A. Give to all responsible foreign steamship lines, that may desire it, the privilege of having a general-order store, under such regulations as were formerly accorded to the Cunard and German lines, or such as may be prescribed by competent authority. Q. What is your opinion in relation to granting night permits?-A. Would grant them, subject to proper guarantees and regulations that will fully protect the revenue, for I believe it would be very injudicious to interpose any obstacles that would interfere with the prompt unlading of ships. In addition to the above testimony, I beg to append a few remarks on a separate sheet marked D, giving further views and in a succinct form, bearing upon this important subject, to which I ask reference. ALEX. T. STEWART. |