We recently alluded to the fact, that Commissioner Poote tad called the attention of the Secretary of the Interior to the existence of certain frauds in the purchase of stationary for the uses of the Patent Office, and of the appointment, by the latter functionary, of a Committee consisting of B. F. James, Norris Peters, and E. W. W. Griffin, attaches of the Patent Office, to investigate the matter. We have now before us the report of a Committee, appointed by the House of Representatives, to inquire into the particulars, from which it appears, that notwithstanding the existence of the most astounding frauds, Messrs. James, Peters, and,.Griffin, ere not able to discover anything deserving ofi etetfsXir e. The House Committee* proceeded to unearth this Contract system, and to expose the means by which the treasury of the Patent Office has been robbed of thousands of dollars ; and surprise is naturally expressed by the Committee that this Commission, appointed to investigate the complaints made by Commissioner Foote,could find no evidence of abuse and fraud on the part of the contractors. It appears that, instead of giving- the awards to the lowest bidder, as the law reqnires, the contracts were given to the highest bidder, by an ingenious system of modern arithmetic, which would put to confusion primitive Nathan Dabol, of New London, who was accustomed to figure out his sums and carry out an honest multiple. Take for example the bid of Dempsey & O'Toole: 100,000 sheets bond paper, per sheet............................. 8 124 reams cap paper, best quality, per ream................20 12 gross barrel pens, per gross.............................. 3 10 dozen fine pencils, assorted colors,per dozen.......... 3 Total..........................".............................si Coyle & Towers' bid : 100,000 sheets bond paper, per sheet...........................$0 02J 124 reams best cap, per ream..................... 4 44 12 gross barrel pens, per gross............................ 4 28 10 dozen pencils, assorted colors, per dozen............ 105 Total.....................................................$9 TOJi Now, it is very plain from the arithmetic of Dempsey & O'Toole, as above given, that they were the lowest bidders, to the extent of $9'45 , but when the figures are fully carried forward, according to the multiplication table of Nathan Dabol, the gross sum of Dempsey & O'Toole's bid amounted to $8,024'66, while that of Coyle & Towers was but $3,11242. Yet, strange as it may appear, the learned mathematicians in charge of the Patent Office, awarded the contract to Dempsey & O'Toole for the enormous sum of 34 cents fractional currency. The Committee state that another method has been to have a good understanding at the source of orders, and have them shaped for your benefit, calling for few if any goods where your bid is below cost, and for large orders where the profits are large ; to be sure and have a large stock of all such ordered at the close of your contract, and change your bidding next time, going below cost where you have overstocked.. The great reliance for profits, however, is in the purchases outside the contract schedule. All articles not in the schedule are charged at fabulous prices though the contract provides they shall be furnished at the lowest market rates. A few very pertinent examples of this genteel system of contact robbery are furnished as follows : " Forty-six caveat books have been charged and paid for since February, 1868, at $40 and $41 each, while not one of them can be found in the office. This is a bo5k of printed forms, which could be of no use outside the office, as testified by all parties. 518,000 printed blanks, consisting of letters, decisions, etc., were charged and paid for, when less than 200,000 could be accounted for by the re- quirements of the office. Of file-wrappers, 80,000 were charged and paid for at a cost of $57 per l,000,and after making liberal estimates for those used and on hand, 18,000 cannot be accounted for. Of manilla and large brown envelopes, nine by twelve, 145,000 were charged and paid for, while' the quantity on hand and used could not exceed 40,000. Of cards for models, 150,000 were charged and paid for at $40 per thousand, while but 40,000 can be accounted for as used and on hand, leaving 110,000 unaccounted for. The above articles could be of no use anywhere but in the legitimate business of the Patent Office, as sworn to by all parties. " Vast quantities of other articles cannot be accounted for in the office ; but as they might have been made useful elsewhere, may have been purloined. We give a few cases of 4he many in evidence : Of eyelets, 1,820 boxes were paid for, but only 390 boxes would be required for the business of the office ; four and a half dozen press copy books bought and paid for, but none to be found ; 890 sheets French tracing paper bought, seldom if ever used, strid but twelve sheets on hand ; 121 reams yellow envelope pager bought, but not over 10 reams can be accounted for ; 1,006,000' envelopes paid for,while the uses of the office would amount to about 150,000. Of taffeta ribbon 10,100 pieces were paid for, and 1,999 gross of rubber bands; and there was a like extravagance in the other articles. " The prices charged were as extravagant as the quantities. We give a few cases : Books worth $9 are charged at $45 ; cash books, worth $5, charged atv$25 ; cards, worth about $3. per thousand, are charged at $40 ; printing envelopes, worth about $250 per thousand, are charged at $20 and $40; ruling, worth about $250 per thousand sheets, is charged at $50; printing 500,000 blanks, worth perhaps $2 per thousand, charged at $1650 and $17." The report states that these contractors have furnished 351,000 sheets of bond paper and been paid $28,080. Its highest testified cost was $7,020 ; add fifteen per cent for profit, $1,053, and you have $8,073. Deduct this from the amount paid and it leaves them over $20,000 above a fair profit on a bill of $28,080. Or, to state the transaction in a different way, $24,000 of this amount was advanced to the contractors for their business, which they were to cancel in paper at four times its cost, and this order is to pay them a further sum of $24,000 for what cost them $6,000. We have not space for the full details printed in the Committee's valuable report, b at enough is given to open the eyes of common understanding to the fact, that corruption of the worst forms have crept stealthily into the public service, and that the Patent Office has not been exempt. In view of this shameful exposure, who can wonder that the Patent Office has run $81,000 behind since July, 1867-. Verily, in the inspired lamentations of Hosea : " Israel is an empty vine ; he bring-eth forth fruit unto himself." " The days of visitation are come ; the days of recompense are come ; Israel shall know it; the prophet is a fool; the spiritual man is mad, for the multitude of thine iniquity, and the great hatred." Justice te Commissioiwr Poota requires us to state, that he has had nothing to do with maRing the contracts in question. On the contrary, the country owes him a debt of gratitude for his earnest efforts to expose and bring them to light.
This article was originally published with the title "How Contracts are Awarded—Gross Frauds in the Patent Office" in Scientific American 20, 8, 121 (February 1869)