States and Territories.

WAR DEPARTMENT,

OFFICE COMMISSARY-GENERAL OF SUBSISTENCE,

Washington, D. C., February 25, 1876. SIR: In compliance with the resolution of the House of Representatives of the 14th instant, furnished by the War Department for the action of this Office February 15, 1876, as follows, to wit: "Resolved, That the Secretary of War be, and he is hereby, requested to report to the House of Representatives the aggregate amount of claims allowed and rejected in the Departments of the Quartermaster-General and Commissary-General under the act of July 4, 1864, and the acts amendatory thereto, in the States of Indiana, Ohio, and Pennsylvania, and also the aggregate amount of claims allowed and rejected under said law, and the amendments thereto, in the Southern States to which the law applies," I have the honor to report the number and aggregate amount of claims recommended by this Office for settlement by the Third Auditor of the Treasury, and the number and aggregate amount of claims disallowed in this Office upon examination, under section 3, act of July 4, 1864, and the acts amendatory thereof, in each of the States and Territories of the United States to which the act applies, as follows:

Of the foregoing disallowed claims, 102, amounting to $144,100.49, are undergoing re-examination upon additional evidence.

Claims from the parishes in the State of Louisiana exempted in the President's proclamation of January 1, 1863, were received and examined in this Office under this act until prohibited by chapter 57, acts of the second session Thirty ninth Congress.

Very respectfully, your obedient servant,

R. MACFEELY, Commissary-General Subsistence.

Hon. W. W. BELKNAP, Secretary of War.
H. Ex. 138-2

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In response to House resolution of the 21st ultimo, report from the Commissioner of Indian Affairs in relation to the defalcation of C. C. Hutchinson, late United States agent for the Ottawa Indians.

MARCH 2, 1876.-Referred to the Committee on Indian Affairs and ordered to be

printed.

DEPARTMENT OF THE INTErior,

Washington, March 1, 1876.

SIR! I have the honor to transmit herewith copy of report, dated the 26th ultimo, from the Commissioner of Indian Affairs, together with accompanying papers, being in reply to resolution of the House of Representatives, dated the 21st ultimo, calling for information in relation to the defalcation of C. C. Hutchinson, late United States agent for the Ottawa tribe of Indians, and addressed to the Commissioner of Indian Affairs.

You will also find inclosed copy of a letter from Hon. Geo. S. Boutwell, late Secretary of the Treasury, dated January 25, 1872, with copy of letter inclosed from J. H. Robinson, assistant solicitor of the Treas ury, dated January 24, 1872, in which he recommends the acceptance of the terms of compromise offered by late Indian Agent C. C. Hutchinson, in full satisfaction of the claim of the Government against him, and copy of letter from Hon. C. Delano, late Secretary of the Interior, in reply to the same.

Very respectfully, your obedient servant,

The SPEAKER of the House of Representatires.

Z. CHANDLER,

Secretary.

DEPARTMENT OF THE INTERIOR,

OFFICE OF INDIAN AFFAIRS,

Washington, D. C., February 26, 1876.

SIR: I have the honor to acknowledge the receipt of a resolution of the House of Representatives, of date February 21, 1876, calling for

information in relation to the defalcation of C. C. Hutchinson, late United States agent for the Ottawa tribe of Indians.

To enable a full understanding of the case, I have the honor to submit the following statement:

By the provision of a treaty, concluded August 30, 1831, (Stats., vol. 7, p. 359,) the United States granted to the "Ottawa Indians of Blanchard's Fork and Roche de Bœuf," seventy-four thousand acres of land, in what is now the State of Kansas. June 24, 1862, a treaty was concluded with the Ottawas, by the provisions of which their reservation was to be disposed of as follows: 1. An allotment was to be made to each person or members of the tribe, and to certain individuals therein named. 2. After such selections or allotments had been made, twenty thousand acres of average lands were to be set apart for the purpose of endowing a school for the benefit of the Ottawas, in addition to one section of land upon which the school was to be located. 3. The remainder of the reservation was to be sold by the United States Indian agent to actual settlers at not less than $1.25 per acre, in the manner provided by the u nth article of the treaty.

C. C. Hutchinson was, at the date of this treaty, and for several years afterwards, United States agent for these Indians, and sold a large quantity of their lands as provided in said ninth article, and received the price therefor. At the date of his retirement from the service as such agent, the accounts of Mr. Hutchinson showed his indebtedness to the Government to be $33,958.69, of which amount the sum of $30,603.94 was received from the sale of lands under the ninth article of the treaty. August 14, 1867, the subject was referred to the Treasury Department, with a view to having suit instituted against Mr. Hutchinson and his bondsman, the amount of whose bond, however, was only $20,000. Suit was instituted in the United States district court for Kansas for the sum of $41,993.71, being the amount of the deficiency with interest. Hutchinson procured a receipt, copy herewith, under date of April 15, 1869, from the duly accredited delegates of the Ottawa tribe of Indians, they being, according to statement of Superintendent Hoag, empowered by the tribe to give such receipt, for the sum of $41,993.71, alleged to be due from him, wherein the Indians acknowledged the sum named to have been expended by Hutchinson for their benefit in the erection of school-buildings, improvements of their lands, and for other beneficial purposes, and that the same is in full of all demands against the United States or said Hutchinson on account of the trust, school, or other moneys of said tribe received by Hutchinson as agent and hitherto unaccounted for.

The suit, according to Mr. Hutchinson's representations, was decided in his favor, on the ground that inasmuch as the proceeds of the sale of these lands were to inure to the benefit of the Ottawa Indians, they had the right to direct the appropriation thereof while in his hands.

A new trial, he asserts, was granted upon motion of the United States district attorney, upon the ground the receipt presented by him had not been acted upon by the Secretary of the Interior.

Instructions were sent to Superintendent Hoag, September-31, 1869 to investigate all the facts and circumstances under which the receipt was given, and endeavor, if possible, to satisfy his mind whether there were grounds for the presumption of fraud in connection with the transaction. January 13, 1870, Superintendent Hoag reported (copy here. with) that he had made the examination as directed, and failed to find any evidence of fraud on the part of Hutchinson, and recommended the

acceptance of the receipt in question by the Government, in full satisfaction of all demands against Mr. Hutchinson.

*

The report of Superintendent Hoag was referred to the Department, and, under date of March 12, 1870, Hon. J. D. Cox, then Secretary of the Interior, decided that, "assuming the whole amount for which Hutchinson is in default has been in fact expended, as he declares it to have been, either for the benefit of the school or in some other form directly for the benefit of the Indians, I am still unable to see how it is possible for this Department to recognize the expenditures so made as forming any part of a legal settlement of his accounts with the Government. As a question of settlement with the Indians, I am obliged to conclude that the acceptance of such a paper (the receipt above mentioned) as a valid voucher in the hands of an agent of the United States would be every way contrary both to the laws for settlement and disbursement of moneys put into the hands of agents, or coming into them by authority of law, and would also be contrary to every sound rule of policy in regard to the dealings of agents with Indian tribes, opening the door to so great abuses as to make it impossible for the Department to accept such a mode of settlement."

Copies of this decision were furnished to the parties interested, since which time the records of this Office afford no information of further action in this case, except an entry upon refunding requisition No. 433, showing a deposit by Hutchinson of $1,000 in full satisfaction of the claim of the United States against him, according to letter of the Assistant Solicitor of the Treasury of February 19, 1872. It is my understanding that this payment of $1,000 was the result of a compromise of the suit, made by the Department of Justice, by which, in consideration of such payment by Hutchinson, the suit against him was. discontinued and his accounts settled by the Treasury Department.

Whether this compromise was effected at the instance or with the then Secretary of the Interior, I am unable from any official data in this Office to state. The resolution of the House of Representatives is herewith inclosed.

I have the honor to be, very respectfully, your obedient servant,
J. Q. SMITH,
Commissioner.

The Hon. the SECRETARY OF THE INTERIOR.

Hon. E. S. PARKER, Commissioner:

OFFICE SUPERINTENDENT INDIAN AFFAIRS,
Lawrence, Kans., Firstmonth 13, 1870.

In response to Office letter of November 12, 1869, giving me instructions additional to those contained in Office letter of 3d September, 1869, in conducting the investigation of the affairs of the Ottawa University, &c., I have to say:

The testimony given in the investigation, under the instructions in letter first above referred to, is so interwoven with that of the general matters of the Ottawa Indians, as appears in transcript of said investigation marked "B," that I find it necessary to glean from it what is therein adduced in reference to the case of C. C. Hutchinson. I have not only carefully examined the signers of said receipt referred to in Office letter of November 12, 1869, and under oath, but, from personal interviews with them and others in whom I have confidence, I have failed to find evidence of fraud on the part of the said C. C. Hutchinson.

This receipt was given by the duly-accredited delegates of the Ottawa tribe of Indians, they being empowered so to do, to said Hutchinson on the 15th of April, 1869. The whole tribe are familiar with the facts, and I have not learned that any member thereof is in any respect dissatisfied, but, on the contrary, all desire and urge its acceptance by the Government. In confirmation of which, regarding the Ottawa Indians now in the Indian Territory, I herewith inclose their letter, (copy marked "R.") I would further call attention to the sworn statements of Judge Wind, Chief Wilson, and William Hurr, found on first and following pages of transcript herewith.