The Annals of the Civil War Written by Leading Participants North and South
Alexander Kelly McClure, Ed.

I was unfortunate enough (or fortunate, as some might have it, though I did not see it in that light) to have so commended myself to the Secretary of the Navy by my work for the War Department that, February 6th, 1864, he applied to Secretary Stanton for my detail to him for temporary service. Receiving my orders, I reported to Mr. Welles a few days later; and, on the 16th, was officially commissioned as “Special Commissioner of the Navy Department.” Mr. Welles had some suspicion that there were abuses in his navy yards needing correction, but no very definite information. A contractor, named Henry D. Stover, had been convicted by courtmartial of an attempt to defraud the government in some trifling matter of sheet copper,.and I was ordered to visit and confer with him in Fort Lafayette. I found him uncommunicative and evasive, and soon departed. Upon reflection, I concluded that the better course was to take the sworn testimony of our most responsible business men, who would assuredly lay bare existing abuses, if any existed. I first summoned Mr. William E. Dodge, Jr., and then, upon his recommendation, other dealers in metals. As Mr. Dodge's affidavit presents, in a condensed form, the facts about the system of navy contracts that flourished everywhere, it will be instructive to present extracts in this connection:

Our facilities, says he, for supplying metals to the government are almost unlimited. We have not, in one instance which I can now recall, furnished or sold anything to the Navy Department; but, according to the usages of the trade, have sold through brokers to a comparatively limited extent. We have not been able to transact business with the department without sacrificing self-respect! We have made several attempts to trade with the department in a fair, liberal spirit, without caring to realize any profit, except barely enough to cover expenses. We have never bid, except in reply to telegrams received from the Navy Department direct, and have been invariably underbid by parties without standing or respectability among merchants. In fact, so satisfied were we that our offers, however liberal they might be, would not result in business, that we finally were obliged to decline to enter the list against the set of disreputable characters, who seemed to have secured the favor of the department! It is a matter of personal knowledge with us that the leading houses of New York entertain the same views. It is also generally understood that some of our best houses, dealing in metals which have a fixed value like gold or silver, and which are liable to all the fluctuations incident to the times, have been obliged to wait three or four, five, or even six months for their money; while other houses, of no standing or reputation, have got their money for immense sales within two or three days!

With such a start, the sequel was not difficult to foresee. Before two days had passed the whole villainy was exposed. Within ten days General Dix, under orders of the Secretary of War, acting at the instance of Secretary Welles, had arrested every member of