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 Book .Gl /4: 
 

 SECOND SPEECH ON THE LAW OF THE SOUTHERN 
 METHODIST CHURCH CLAIM. 
 
 SOUTHERN COAL, IRON, AND ARMOR PLATE. 
 
 SPEECHES 
 
 OF \ 
 
 HON. JOHN W.^GAINES, 
 
 OF TENNESSEE, 
 
 HOUSE OF REPRESENTATIVES, 
 
 January 28 and March 26, 1898. 
 
 "W A.S H IN GTON» 
 
 1898. 
 
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 SPEECHES 
 
 C^ 
 
 ^ ^^HON. JOHN W. GAINES.. 
 
 V 
 
 ^' THE LAW OF THE SOUTHERN METHODIST CHURCH CLAIM. 
 
 ^' January 28, 1S98. 
 
 Mr. GAINES. Mr. Chairman, Maj. A. W. Wills, who was Quar- 
 termaster-General of the United States, and in charge of the 
 claimant's building during its entire use by the Federal authori- 
 ties, in his statement says that " the sum saved." actually saved, 
 mind you, " to the Government was far in excess of the amount 
 recommended by the committees." The original claim was 
 $4.18,500, while this bill and the committees' recommendation 
 •were for the compromise sum of $288,000. 
 
 Now, in the few minutes which I have accorded me through the 
 kindness of General Grosvenor. I desire to reply to the proposi- 
 tion of law laid down by the distinguished gentleman from Iowa 
 [Mr. Hepburn] . He states that we dare not challenge his conten- 
 tion as to the law as read from the old report by the Clerk to-day. 
 I do challenge it, Mr. Chairman. I contend that the property of 
 corporations was not confiscable under our war statutes. 
 
 I hold in my hand, sir, an opinion delivered by the supreme 
 court of New York as late as 1881 (83 N. Y.), in which the direct 
 question that now challenges the attention of this honorable body 
 was settled in a unanimous opinion, and the law settled in that 
 court, in exactly the opposite way from that stated and contended 
 for by my friend and the opposition. The opinion reaffirms the 
 Planters' Bank opinion reported in 1(3 Wallace, both opinions 
 holding that the property of a corporation was not confiscable. 
 
 The circumstances in brief of this case were these: The George- 
 town Bank of South Carolina for value received assigned $10,000 
 to the claimant in 1861, and g&ve him, the plaintiff, Risley, a 
 check therefor. The check "was presented about the 3d of Jan- 
 uary, 186.5, payment being refu$ed by the Phenix Bank of New 
 York, the correspondent of' 'the other bank, on whom it was 
 drawn, because the presentor, the plaintiff, was not "known to 
 the bank." 
 
 The next day it was presented by a party "known," and pay- 
 ment refused because on the morning of that day, January .5, 186.5, 
 the money was taken and confiscated by order of the district court 
 of the United States for the southern district of New York, under 
 the acts of 1861, August 6, entitled "An act to confiscate property 
 used for insurrectionary purposes," and the subsequent act of July 
 17, 1863, entitled "An act to suppress insurrection, to punish trea- 
 son and rebellion, to seize and confiscate the property of rebels, and 
 for other purposes." A decree of confiscation was had. On the 
 24th of January, 1865, the defendant, the Phenix Bank, paid over 
 2 3200 
 
(by decree of said court) to the marshal the sum of $12,117.38, the 
 whole amount of the credit of the Bank of Georgetown with the 
 defendant bank. So much for the statement of the facts in brief. 
 The court held that the property 'of the corporation was not 
 confiscable under these war acts. The full court, through An- 
 drews, judge, said: 
 
 That the property of the corporation is not confiscable under the confisca- 
 tion acts was very pi-ecisely stated in the opinion of Justice Strong in Plant- 
 ers' Bank vs. Union Bank (16 Wall., 496 >. 
 
 And I call to the attention of this committee, and especially of 
 the fierce opponent of this measure [Mr. Dalzell] , to the fact 
 that Justice Strong was from his State, Pennsylvania. 
 
 Andrews, judge, further said: 
 
 * * * And considering the question de novo, I fully concur in the opinioD 
 of the learned justice upon the point stated. 
 
 This is on page 835 of this volume, 83d New York. 
 On page 336 the court further said: 
 
 We are of opinion that such indication does not exist in the confiscation 
 acts. The statutes of 1861 and 1863 are in pari materia. 
 
 Now listen to this especially: 
 
 They relate to the property of sentient beings possessing a will impelled 
 by motives and capable of forming an intent. 
 
 As said by Strong, judge, bota of these acts had in view property of nat- 
 ural persons who were public enemies, or persons who gave aid and comfort 
 to the rebellion, or who held oflice under the Confederate government or 
 under one of the States composing it. 
 
 The district court, upon this construction of the confiscation act, in direct- 
 ing the seizure and decreeing the confiscation of the prouerty of the Bank of 
 Georgetown, acted wholly outside of its jurisdiction, and the entire proceed- 
 
 dings, including the seizure, condemnation, and distribution, were void, and 
 constituted no justification to the defendant in paying over the fund to the 
 ^ marshal. The acts did not confer upon the district court general jurisdic- 
 ^ tion to seize and conflscAte enemies' property. It had no jurisdiction what- 
 j ever to seize and condemn the property of corporations. 
 
 Now listen to this: 
 
 But of natural persons only. That the case was not one within the juris- 
 diction of that court appeared upon the very inception of the proceedings. 
 The information disclosed that the property proceeded against was the prop- 
 erty of the corijoration; demanded of the court, directed its seizure as the 
 property of the corporation; and it was declared to be the property of the 
 corporation in the final sentence of condemnation. 
 
 The court below charged the law accordingly. The jury found 
 the facts for the plaintiff, and this opinion as to the law and find- 
 ing of the jury was made the unanimous opinion of the New York 
 court of appeals, the highest court of that State. This opinion, 
 as stated, affirms the 16 Wallace case, to which I refer the distin- 
 guished gentlemen of the opposition. Strong, judge, in 16 Wallace, 
 in referring to these acts, said: 
 
 In none of the six classes of persons whose property was by the acts of 1861 
 and 1863 declared subject to confiscation was an artificial being [a corpora- 
 tion] included. 
 
 The claimant is a charitable corporation. Its property, then, 
 though in fact practically destroyed, was not confiscated. The 
 grounds of defense of the defendant, the Phenix Bank in this case, 
 elaborated, were as follows: 
 
 First. That the Bank of Georgetown acquired the property seized with the 
 intent specified in the act of 1861, and used and employed it with that intent. 
 
 Second, l^iat the corporation, since the 17th day of July, 1863, acted as the 
 fiscal agent of the Confederate government and of several of the States of 
 the Confederacy, and accepted such agency from several States after the date 
 of the ordinance of secession of those States. 
 
 Third. That since the ITi a day of July, 1861, the Bank of Georgetown, while 
 owning property in the State of New York, had given aid and comfort to the 
 rebellion in the ways and by the acts set forth in the information. 
 
 S3C0 
 
Fourth. That the corporation, after the passage of the act of July 17, 1862, 
 being engaged in aiding and abetting the rebellion, did not, within sixty days 
 after the proclamation of the President of July 25, 18ti2, cease therefrom. The 
 information avers that, by reason of the causes alleged, the "said property, 
 estate, and effects " were liable to confiscation and condemnation, under the 
 acts of Congress, and demands judgment sentencing it to be condemned as 
 confiscated and forfeited to the United States. 
 
 I am surprised, Mr. Chairman. I thought the distinguished gen- 
 tleman [Mr. Hepburn] . who states that erroneous proposition of 
 law. stood with us in the fight we are making for a claim that is 
 absolutely just. A few days ago the distinguished gentleman 
 was on this side of the House aiding us to get this claim through, 
 and he stated to me that it was "a i)lain case of eminent domain." 
 
 Mr. HEPBURN. Do you mean to say that I ever said to you 
 or to any other human being that I would support this bill? 
 
 Mr. GAINES. You did not say that in so many words, but you 
 were on this side of the House 
 
 Mr. HEPBURN. I did say to you that I would support the 
 bill then pending, and I am ready to do it now 
 
 Mr. GAINES. I am just stating what you said. 
 
 Mr. HEPBURN. But I would not bunco anybody in the way 
 some of you gentlemen attempted to bunco us on this side of the 
 House, by getting up a proposition we were willing to vote for, and 
 then substituting another of this character that we are not will- 
 ing to vote for. 
 
 Mr. GAINES. The reason why this bill for a direct appropria- 
 tion was substituted for the other was because to refer this claim 
 to the Court of Claims meant absolute destruction to this claim 
 for the want of a hearing. That docket is crowded and five years 
 behind. I was responsible for that change, and I made it after a 
 full personal investigation. I hold in my hand a letter from ex- 
 Congressman John C. Houk, of Tennessee, who succeeded his 
 illustrious father, Hon, L, C. Houk, in this House. 
 
 The CHAIRMAN. The time of the gentleman has expired, 
 
 Mr. GAINES. I should like a little more time. 
 
 Mr. GROSVENOR. How much more time remains? 
 
 The CHAIRMAN. Twenty minutes. 
 
 Mr. GROSVENOR. I can not yield. 
 
 Mr. GAINES. Then I ask unanimoiis consent to print the 
 letter. 
 
 The CHAIRMAN. The gentleman asks unanimous consent to 
 print a letter which he presents. Is there objection? 
 
 There was no objection. 
 
 Knoxville, Tenn., May 33, 1896. 
 
 Dear Siii: I spent yesterday and day before in Nashville, and while there 
 had several conferences with our mutual friend Captain Baker and others 
 respecting the political outlook. 
 
 It seems that the Captain came home from Washington very much disap- 
 pointed, and I am really afraid tliat I may innocently have had something to 
 do with bringing this result about. You will recall the correspondence had 
 with you, previous to the assembling of Congress, respecting the appoint- 
 ment of committees, and especially the effort which would probably be made 
 to secure the passage of fraudulent war claims. 
 
 METHODISr CLAIAI A .TUST ONE. 
 
 It never occurred to me that these letters might be made to apply to this 
 claim of the Publishing House of the Methodi.st Church South. They are 
 certainly not intended to apply to this claim. I have had occasion to look 
 into the matter, and I can say to you in all sincerity that I know of no more 
 meritorious claim. It is one which I think ought to be paid and in which 
 view I £ftn sure you will concur upon a full investigation. 
 
 JOHN C. HOUK. 
 Hon. Thomas B. Reed, 
 
 Speaker House of Representatives, Washington, D. C. 
 
 33 
 
Mr. Schwab. 
 
 Senator Blackburn. Is there any competition in the price of armor m 
 this country as between yourselves and the Bethlehem Comp:uiy .' 
 
 Mr Schwab. No, sir; assuredly not. We have always had an under- 
 standing in that matter. We never take a contract that we do not consult 
 with Bethlehem about it. . 
 
 Senator Blackburn. I asked if there is competition? -4. * ■, „„ 
 
 Mr. Schwab. No. sir; there is no competition. I want to be quite tan on 
 that -point. —Senate Hearings U5U. 
 
 SOUTHERN COAL, IRON, AND ARMOR PLATE. 
 
 3Iarch 26, 1S98. 
 Mr. GAINES. Mr. Chairman, I want to call the attention of 
 
 the House , ,, ^^ 10 
 
 The CHAIRMAN. What motion does the gentleman make? 
 
 Mr GAINES. I move to strike out the last word. I want to 
 call tiie attention of the House, since we are passing on a provision 
 touching on the purchase of coal for the use of the Government, 
 to a comparison of prices between the cost of coal m Pennsylvania 
 and the South. , . 
 
 We are producing down in Alabama and Tennessee, and in 
 other portions of the South, material used in the manufacture of 
 armor plate. Both sets of figures are authentic. 
 
 The Eastern prices are taken from Secretary Herbert s report ot 
 1897, and are the figures at which these materials are sold to the 
 Government, in the shape of armor plate, by Carnegie. The 
 Southern rates are equally as authentic, given me last summer by 
 Col A. M. Shook, vice-president of the Tennessee Coal. Iron and 
 Railroad Company, one of the largest iron and coal concerns m 
 the United States, doing business in Tennessee and Alabama. 
 
 Pig iron is sold by this company and the Sheffield Company, as 
 shown by the testimony taken by the Armor Factory Board, at 
 from .S5.G0 to $(5 per ton. Tabulating these figures, we have a re- 
 markable showing in favor of the South. 
 
 South. 
 
 Pig iron - per ton 
 
 Iron ore- .- - - *^*'- 
 
 Slack coal- - ■--- 
 
 Coke - per ton 
 
 Limestone 
 
 Total . 
 
 8.95 
 
 Difference in favor of the South, $ll.~.i. 
 
 Yet Mr. Chairman, in the face of these facts, not one ton of 
 coal has been purchased in the South in our preparation for war 
 in Cuba, so far as my vigilance has been able to ascertain, although 
 3300 5 
 
this Southern re.s:ion is a thousand miles nearer to Key West than 
 the territory that has furnished it. 
 
 Mr. Chairman, I want now to advert to a matter which the 
 gentleman from Maine [Mr. Boutelle] studiously avoided just 
 now when I questioned him, and that is the expense that the Gov- 
 ernment undergoes in testing this armor plate. He says we have 
 a testing ground, and we are now providing for that expense. I 
 want now to know who pays the expense of the test? Say twelve 
 armor plates are sent down here for examination. 
 
 The most defective looking one is picked out to stand the test. 
 It is put up and shot at. It is purposely destroyed, as near as pos- 
 sible. If it stands the test, the other eleven are presumed to be 
 even better than this, are accepted, and the Government pays for 
 the whole twelve, including the cost of testing. 
 
 Now, who stands the loss of this twelfth plate that is shot at? 
 If the plate stands the test, the Government loses; if not, the con- 
 tractor bears the loss. The plate, on an average, for one ship is 
 from 2,600 tons to 2,800 tons, which has cost the Government on 
 an average of §617 a ton, and there are 40 tons to the battle ship 
 plates, the smaller plates being from 10 to 15 tons. 
 
 In other words, we pay for twelve plates and get eleven we 
 use for plate. We pay for the powder: we pay for the whole ex- 
 periment in the event we succeed. Now, I do not know of just 
 such an inevitable and dead loss to any other Government on 
 earth. England has an armor-plate factory, and we do not hear 
 of it. She stands first in the calendar of our great naval nations. 
 France is next, and has an armor-plate factory 
 
 Mr. DALZELL. Will the gentleman from Tennessee allow me 
 an interru]ition? 
 
 Mr. GAINES. Certainly. 
 
 Mr. DALZELL. There is no nation on the face of the earth 
 that has an armor-plate factory except Russia. 
 
 Mr. GAINES. I am glad that the gentleman admits that Russia 
 has one. 1 will show him in a minute that he is mistaken as to 
 the other countries. I have here a letter from the chancellor and 
 attache of the French embassy. France has Government armor 
 factories; and they have all sorts of factories that go to make 
 that nation second only to England. 
 
 Mr. SW ANSON. What legation? 
 
 Mr. GAINES. The French legation. I will read the letter, if 
 I can find it. It is here, I know. 
 
 Mr. DALZELL. There are numerous armor-plate factories 
 scattered all over Europe; there are a number in France and in 
 England, but there is no Government armor-plate factory except 
 in Russia. 
 
 Mr. GAINES. I have the letter here 
 
 The CHAIRMAN. The time of the gentleman from Tennessee 
 has expired. 
 
 Mr. GAINES. I hope I may be allowed to proceed long enough 
 to read this letter. This is signed by the representative of the 
 legation here. I read: 
 
 Embassade de France, aux Etats Unis, 
 
 Washington, D. C, January ?5, 1S98. 
 Dear Sir: My inability to confer before this with the military attache of 
 this embassy prevented me, to my rec?ret, from replying any sooner to your 
 favor of the i:Uh instant. Franco builds a part of her men-of-war, armor 
 plate, and artillery in Government establishments. The rest is constructed 
 by private industries. This nio:le is followed so as to allow the Government 
 to be independent of private industries in time of peace. On the other hand, 
 8^00 
 
in case of war, the Government needs the assistance of private industries, 
 and it would be too late to improvise them in cases of emergencies. For 
 these reasons recourse is had to both sources of production. 
 Very truly, yours, 
 
 JULES BOEUFVE, Chancellor. 
 Hon. John W. Gatnes, M. C. 
 
 Washinpton, D. C. 
 
 Now, Mr. Chairman, I also have another letter here from the sec- 
 retary and charge d'affaires of the Italian embassy. Count Vinci: 
 
 Ambasciata di S. M. Li Re D'Italia, 
 
 Washington, D. C, January IS, 1S9S. 
 Sir: I beg to acknowledge the receipt of your letter of January 13, to 
 which I take pleasure in answering. 
 
 In a general way I can say that the Governmient of Italy owns the navy- 
 yards and its own docks where the war ships are built, and owns its plants 
 for the manufacture of war material and naval construction, also for the 
 forging of armor plates. However, no law prevents the Royal Government 
 to make its ordnance to private industry, and in the late times some of our 
 naval constructions were entirely committed to them; so that a combined 
 system is probably to prevail in the future. 
 
 Be pleased to accept, sir, the expression of my consideration. 
 Respectfully, yours, 
 
 COUNT VINCI, 
 Charge d' Affaires for Italy. 
 Hon. John W. Gaines, 
 
 Member of the House of Representatives. 
 
 Now, Mr. Chairman, England stands first, and has her armor- 
 plate factory; France stands second, and has hers; Russia stands 
 third, and has hers, says the distinguished authority from Penn- 
 sylvania [Mr. Dalzell]; Italy stands fourth, and has hers; the 
 United States stands fifth, without any of her own; Spain stands 
 sixth, and has hers; while Japan stands seventh, and has hers and 
 is preparing to build more. 
 
 I believe there are authorities of high standing that say that 
 Japan in her naval force stands second only to England. She has 
 one armor factory, and her agent has just left this country, where 
 he has been gathering information preparatory to erecting another. 
 I hold in my hand a clipping from the Detroit Tribune of January 
 31, 1898, which says in part: 
 
 By establishing a Government arsenal at Woolwich, Great Britain has 
 made a saving of about 50 per cent on the production of her war machinery, 
 and private firms found that they could no longer charge fancy prices be- 
 cause the nation was their patron. This will no doubt prove true in the case 
 of the United States. 
 
 This editorial was espousing the cause of biiilding a Govern- 
 ment armor factory in that city. 
 
 Now, Mr. Chairman, one or two points more and I will not 
 further trench upon the kind attention of the House. The gen- 
 tleman from Maine [Mr. Boutelle] on Monday stated that Mr. 
 Secretary Herbert recommended a §400 proposition to this House 
 for the purchase of armor plate. The gentleman from Ohio [Mr, 
 Bromwell] stated that he voted for the $^300 proposition because 
 an Illinois concern had agreed to make it for $300. I want to say 
 that the gentleman from Ohio was mistaken; that there was no 
 Illinois proposition considered; that the §300 proposition was made 
 upon the testimony taken by this House and by the Senate upon 
 that subject. 
 
 Commander Elmer states that the cost of armor plate should be 
 no more than .§250. Commodore Rodgers stated it should be no 
 more than $250. G-ermany is paying $350 for her armor plate, and 
 so upon the testimony elicited by the two committees they reported 
 that $300 was the proper amount, and lapon that report this House 
 adopted the §300 proposition. Now, they say the reason why we 
 3200 
 
can not get the $300 proposition to go through was because we 
 could not get any bids. Well, of course, if that is the case, that 
 is a complete excuse; but why set that up? 
 
 It is because we have only two armor-plate factories in the 
 country that are working for the Government, and the way they 
 do is that they will not bid against each other. The Government 
 gives them all the work that we have to do. Indeed, this bill pro- 
 vides that this armor-plate business shall be confined exclusively 
 to the manufactories of the United States, when we have but two 
 and they will not compete. 
 
 The CHAIRMAN. The time of the gentleman from Tennessee 
 has expired. 
 
 Mr, DALZELL. Mr. Chairman, I do not desire to occupy any 
 time; I only want to say that when this subject is properly before 
 the committee and whegi it is in order under the rules of the 
 House, I propose to disci3ss it. It is manifest that the paragraph 
 under discussion has no reference whatever to armor plate. 
 
 Mr. GAINES. I am well aware of that, but the interruption 
 of the gentleman from Pennsylvania turned me to that subject 
 from " coal," which I desired to discuss. 
 
 The CHAIRMAN. Does the gentleman from Tennessee with- 
 draw his amendment? 
 
 Mr. GAINES. I do. 
 
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LIBRARY OF CONGRESS 
 
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