This arrangement, entered into with care, proved to be a measure of very great advantage to the government as well as to all business men engaged in the great commercial operations of New York. The necessary details to carry this agreement into effect were arranged between General Hillhouse, for the United States, and W. A. Camp, manager of the New York clearing house.
CHAPTER XXV. INVESTIGATION OF THE NEW YORK CUSTOMHOUSE. A General Examination of Several Ports Ordered—No Difficulty Except at New York—First Report of the Commission—President Hayes' Recommendations—Letter of Instructions to Collector C. A. Arthur —Second Report of the Commission—Losses to the Government by Reason of Inefficiency of Employees—Various Measures of Reform Recommended—Four Other Reports Made—The President Decides on the Removal of Arthur, Cornell and Sharpe—Two Letters to R. C. McCormick on the Subject—Arthur et al. Refuse to Resign—The Senate Twice Refuses to Confirm the Men Appointed by the President to Succeed Them—Conkling's Contest Against Civil Service Reform—My Letter to Senator Allison—Final Victory of the President.
At the beginning of the administration of President Hayes, and for months previous, there had been complaints as to the conduct of business in the principal customhouses of the United States. This was especially called to my attention, and at my suggestion the President directed an examination into the conduct of the customhouses at New York, Philadelphia, New Orleans, San Francisco and perhaps other ports. Examinations were made by intelligent business men selected in the various ports, and full reports were made by them, and printed as public documents. Many changes were made, and reforms adopted, founded upon these reports, and there was no difficulty except only at the port of New York, where more than two-thirds of all the customs revenue was collected. Chester A. Arthur was then collector of the port, A. B. Cornell was naval officer, and George H. Sharpe was appraiser.
On the 23rd of April, 1877, I designated John Jay, Lawrence Turnure, of New York, and J. H. Robinson, Assistant Solicitor of the Treasury, as a commission on the New York customhouse. They were requested to make a thorough examination into the conduct of business in that customhouse. Full instructions were given and many specifications were made in detail of all the points embraced in their examination.
On the 24th of May they made their first report, preferring to treat the general subject-matter separately. This report related chiefly to appointments upon political influence without due regard to efficiency. I promptly referred it to the President, and received the following letter:
"Executive Mansion, } "Washington, May 26, 1877.} "My Dear Sir:—I have read the partial report of the commission appointed to examine the New York customhouse. I concur with the commission in their recommendations. It is my wish that the collection of the revenues should be free from partisan control, and organized on a strictly business basis, with the same guarantees for efficiency and fidelity in the selection of the chief and subordinate officers that would be required by a prudent merchant. Party leaders should have no more influence in appointments than any other equally respectable citizens. No assessments for political purposes, on officers or subordinates, should be allowed. No useless officer or employee should be retained. No officer should be required or permitted to take part in the management of political organizations, caucuses, conventions, or election campaigns. Their right to vote, and to express their views on public questions, either orally or through the press, is not denied, provided it does not interfere with the discharge of their official duties.
"Respectfully,
"R. B. Hayes.
"Hon. John Sherman, etc."
My answer to the commission was as follows:
"Treasury Department, May 26, 1877. "Gentlemen:—Your first report on the customhouse in New York, of date the 24th instant, has been received, and the reduction proposed by you of twenty per cent. of the number of persons employed therein is approved.
"So far as these offices are created by law, vacancies will be made and left for the action of Congress. The reduction of the other employees, the number of whom and whose compensation are not fixed by law, will be made as soon as practicable.