On December 11, Senator Conkling offered a resolution directing the Committee on Military Affairs to inquire into the defalcation of an army paymaster named Hodge. Trumbull moved as an amendment that the Joint Committee on Retrenchment be reconstituted and instructed to make a general investigation of the waste and loss of money in the public service. A debate sprang up on the proposed amendment, which continued for a week and aroused keen interest throughout the country. Wilson, the chairman of the Military Committee, sustained the amendment, saying that the Hodge case did not appertain to military matters, but to finance, to the handling of public money. Sumner took the same view. Chandler objected to a joint committee with power to investigate all the executive departments. He preferred to have each department investigated by a separate committee, if it needed investigation. In the course of the debate extracts were read from the Patterson Report, together with the testimony of witnesses. Weighers in the custom-house testified that men were sent to them by the collector as assistants for whom there was no work to do. They were simply put on the pay-roll and did nothing but draw their salaries. In the weighers' department alone $50,000 per year was thus squandered. Collector Murphy was quoted as saying, in answer to a remonstrance about unnecessary help in the custom-house, "There were certain people who had to be taken care of: it was well known that they had to be taken care of, and nobody in the party would say anything about his taking care of them, and he would do it."[122]
Trumbull said that he did not denounce officers of the Government indiscriminately. He merely wished to have some system introduced by which appointments should be made with regard to the fitness of the appointees and the need of their services. As the debate enlarged, a line of cleavage was disclosed among Senators similar to that which occurred on the deposition of Sumner; Morton, Conkling, Chandler, Edmunds, and Sherman opposing, and Schurz, Sumner, Logan, Tipton, and Wilson supporting, the Trumbull amendment. Finally the Republican Senatorial Caucus took the matter in hand and adopted a substitute to the Trumbull Resolution, which was offered in the Senate by Anthony and adopted by 29 to 18. It provided for a select committee to investigate only such subjects as the Senate should designate.
One of the things stumbled on by the Patterson Committee was the "general order" system in the New York Custom-House, which led up to the Leet and Stocking scandal, one of the most exasperating incidents of the Grant régime. Leet had been a member of General Grant's staff. The Patterson Committee found that he was enjoying the rank and pay of a colonel in the army, and also of a clerk in the War Department, and was receiving an additional income, estimated at $50,000 per year, for the warehousing of imported goods in New York, without the expenditure of any labor or capital of his own and without even his personal presence in New York, he being a resident of Washington City. All goods arriving by the Cunard and Bremen lines were sent by the collector's order to the Leet and Stocking warehouse, and were required to pay one month's storage whether they remained there a month or only a day, the cost being not less than $1.50 per package. This "general order" system had been devised before the Republican party came into power. It was flourishing in 1862.[123] Collector Grinnell, Grant's first appointee to that position, found it in force when he came into office. Before it was devised the arriving goods had been stored temporarily in warehouses belonging to the steamship companies, adjacent to the docks, without cost to the owners.
When the Patterson Committee made this discovery they reported the facts personally to the Secretary of the Treasury (Boutwell), who appointed a board of three officers of the department to make an independent investigation. This board made a report sustaining the findings of the Patterson Committee. Boutwell thereupon wrote to Collector Murphy, who had succeeded Grinnell as collector, advising him to discontinue the "general order" system altogether and go back to the old system, no good reasons for the former change, but many objections to it, having been found. Months passed after Boutwell's letter was sent, but the "general order" system was still flourishing and the coffers of Leet and Stocking were still receiving an income, at least double that of the President of the United States, as a reward for putting an obstruction in the pathway of lawful commerce. A. T. Stewart, Grant's first choice for Secretary of the Treasury, testified that the "general order" system was a damage to honest traffic and a general nuisance. William E. Dodge testified that he had been compelled by it to curtail his imports at New York and to use other ports of entry to avoid the delays and exactions of the "general order" system.
The indifference of the only man higher up than Secretary Boutwell—the only man who had power to remove Collector Murphy or to choke off Leet—was incomprehensible. Schurz made comments on the case which the Administration Senators could not answer and dared not leave unanswered. On the 18th of December, Conkling introduced a resolution directing the Committee on Investigation and Retrenchment to make an inquiry into the Leet and Stocking scandal. This resolution was preceded by a preamble quoting the words of Schurz as a reason for making the inquiry, in the following form:
Whereas it has been declared in the Senate that at the port of New York there exists and is maintained by officers of the United States under the name of the "General Order business" a monstrous abuse fraudulent in character, and whereas the following statement has been made by a Senator: "It was intimated by some of the witnesses that Mr. Leet, who pockets the enormous profits arising from that business, had some connection with the White House; but General Porter was examined, Mr. Leet himself was examined, and they both testified that it was not so, and, counting the number of witnesses, we have no right to form a different conclusion. But the fact remains that this scandalous system of robbery is sustained—is sustained against the voice of the merchants of New York—is sustained against the judgment and the voice of the Secretary of the Treasury himself. I ask you how is it sustained? Where and what is the mysterious power that sustains it? The conclusion is inevitable that it is stronger than decent respect for public opinion, nay, a power stronger than the Secretary of the Treasury himself":
Therefore resolved, that the Committee of Investigation and Retrenchment be instructed to inquire into the matter fully and at large, and particularly whether any collusion or improper connection with said business exists on the part of any officer of the United States, and that said committee further inquire whether any person holding office in the custom-house at New York has been detected or is known or believed by his superior officer to have been guilty of bribery or of taking bribes or of other crime or misdemeanor, and said committee is hereby empowered to send for persons and papers.
The Committee of Investigation and Retrenchment had not been appointed when Conkling offered this resolution. It had been agreed upon in the Republican Caucus, but had not been reported to the Senate. Senator Anthony immediately reported the names: Buckingham (Connecticut), Pratt (Indiana), Howe (Wisconsin), Harlan (Iowa), Stewart (Nevada), Pool (North Carolina), Bayard (Delaware). Sumner expressed mild surprise that no Senator who had favored an investigation of the New York Custom-House, or of frauds in general, was a member of the committee, unless Bayard (Democrat) might be counted as such. He quoted from Jefferson's "Manual of Parliamentary Law" to show that the proper course was to give the leading place in such a committee to the prime mover of it, who was, in this case, undoubtedly Trumbull, but that nobody who had shown any interest in the matter to be investigated, not even the Senator from New Hampshire (Patterson), whose investigation of the previous session had uncovered the alleged frauds, and whose familiarity with the case would be most useful now, had any place on it. Anthony contended that inasmuch as all the Senators had voted to raise the Committee, the vote having been unanimous, all the requirements of parliamentary law were satisfied by the appointment of the seven Senators named, or any other seven. Thurman, of Ohio, thought that Anthony was "sticking in the bark" and not reaching the sound wood of the tree. Considerable time was spent in the debate on the composition of the committee, but in the end the list reported by Anthony was adopted, as was Conkling's resolution, with its bulky preamble. The preamble was doubtless intended to convince Grant that Schurz (not Conkling) made the investigation necessary. The committee went to work early in 1872 and eventually furnished a solution of the Leet and Stocking mystery.
Leet learned in 1868, soon after Grant's election, that he intended to appoint Moses H. Grinnell collector of the port of New York. He procured from Grant a letter of introduction to Grinnell, but Grant cautioned him, when he gave it, not to use it for the purpose of getting an office. When Leet handed the letter to Grinnell he remarked to him that he (Grinnell) was to be appointed collector of the port. Grinnell had not received any intimation of the fact before, and he inferred that Leet had been designated by the President to inform him of it. He asked Leet what he could do for him, and Leet replied that he wanted the "general order" business of the custom-house. Grinnell thought that this also was a message from the President, and he arranged as soon as possible to give Leet a portion of it. Leet farmed out this portion to a man named Bixby for $5000 per year, plus one half of all the profits in excess of $10,000. Then he went back to Washington and resumed his place as a clerk in the War Department; but he complained bitterly to Grinnell that his share in the "general order" business was not large enough, and he told Grinnell that he would be removed from office if he did not give him the whole of it. After much threatening, Grinnell did give him the whole of it, but he was removed, nevertheless, after holding the office about one year, and Murphy was appointed collector in his place. Murphy kept the "general order" business in the hands of Leet and Stocking until March, 1872, when the committee made its report. On the 14th of March, the newspapers announced that Murphy had been removed as collector and General Arthur appointed in his place, that the "general order" business had been radically reformed, and that Leet and Stocking had disappeared from history. In making this announcement the Nation called the attention of the editor of Harper's Weekly (George William Curtis), who was still a little deaf to the shortcomings of the Administration, to some things hard to understand.
When the President [it said] became aware that Leet had abused his confidence, disregarded his wishes, made false representations as to his influence over him, and concealed his doings from him,—facts which were revealed by the repeated complaints of prominent merchants and by Leet's appearance in public as owner of the "plum," and finally by a congressional investigation,—he took no notice of them whatever. So far as we know he gave no sign of displeasure, paid no attention to the complaints against him, and let him go on for nearly two years preying on the commerce of the port, till a second congressional investigation, obtained with great difficulty, and the savage assaults of the press on the eve of an election, made the change we have just witnessed imperatively necessary. It has been the custom of the friends of the Administration hitherto, whenever charges of this kind are brought up, instead of answering them, to tell you that they endear the President more than ever to the American people; that his renomination is a sure thing, etc.; and that Horace Greeley is a friend of Hank Smith. Now is this satisfactory? Let us have a candid answer, without allusions to cigars, or fast horses, or investments, or summer vacations, Hank Smith, or Horace Greeley.
No dollar of the Leet and Stocking "plum" ever reached President Grant or any member of his family. We are left to conjecture what were his reasons for allowing the scandal to continue so long after the facts became known. Judging his course here by his second term, we are forced to conclude that his combativeness was aroused by the criticisms of Schurz, Trumbull, and others, which he interpreted as marks of personal hostility to himself. In fact, his senatorial supporters so interpreted them in public discussions. He probably upheld Leet for the same reasons that he shielded Babcock in the greater scandal of the St. Louis Whiskey Ring in 1876.[124] It was a mistake, however, to suppose (if he did suppose) that Trumbull was moved by any personal hostility. An interview with the latter, dated December 3, 1871, published in the Louisville Courier-Journal,[125] shows that he was still on friendly terms with the President. His interlocutor began by asking him if he would consent to the use of his name as a conservative candidate for the Presidency against General Grant, to which the "Illinois statesman replied with more than usual emphasis, 'No sir, I would not.'"