Franklin W. Smith and the U. S. Navy

[David Lockmiller]

What was the nature of the celebrated case of Franklin W. Smith and brother? And, what action did President Abraham Lincoln, in his role as Chief Magistrate of the nation, take in the case?

Hint:

Yogi Berra -- "It's like déjà vu all over again."

The Navy suspended Inchcape because of “evidence of conduct indicating questionable business integrity.” The Department of Justice had been investigating the company since 2010, after a former employee filed a whistle-blower suit accusing it of fraud. . . . Still, records show that the Navy extended Inchcape’s largest contract seven times since 2010, and awarded the firm at least eight other contracts, estimated at more than $41 million, including three this year.

“Navy Secretary Expands Review of Supply Contracts” New York Times 12/10/13

http://www.nytimes.com/2013/12/10/us/pol...h_20131210[/url]

[RJNorton]

David, I cheated. It looks to me like the Smith Brothers were contactors who did business with the military and were charged with fraud. They were put on trial, found guilty, and the verdict was approved by Gideon Welles. But Lincoln felt differently about the verdict, and overruled it. He issued the following order:

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Order Annulling Sentence of Benjamin G. and Franklin W. Smith


March 18, 1865

I am unwilling for the sentence to stand and be executed, to any extent in this case. In the absence of a more adequate motive than the evidence discloses, I am wholly unable to believe in the existence of criminal or fraudulent intent on the part of one of such well established good character as is the accused. If the evidence went as far toward establishing a guilty profit of one or two hundred thousand dollars, as it does of one or two hundred dollars, the case would, on the question of guilt, bear a far different aspect. That on this contract, involving from one million to twelve hundred thousand dollars, the contractors should attempt a fraud which at the most could profit them only one or two hundred, or even one thousand dollars, is to my mind beyond the power of rational belief. That they did not, in such a case, strike for greater gains proves that they did not, with guilty, or fraudulent intent, strike at all. The judgment and sentence are disapproved, and declared null, and the accused ordered to be discharged.

March 18. 1865 A. LINCOLN

[L Verge]

I cheated and googled also and found a very interesting case of what would be called "whistle blowing" today. Franklin Smith and his brother exposed cheating and graft in naval purchases, etc., during the Civil War, and the Navy brass went after them -- accusing them of graft also. John Parker Hale (as in Lucy Lambert Hale's father) chaired the Senate committee that investigated the charges. The Navy brass hated Hale also because he had worked to outlaw several unsavory naval practices during the war.

Before Hale could release his committee's findings, the Navy arrested the Smith brothers and took them before a military court martial - another case of civilians being tried by the military. The Smiths were high up in the Republican and abolitionist movements before the war, and the people of Massachusetts took their case to Lincoln, who annulled the court's verdict with the order that Roger posted above.

David is certainly correct that it's deja vu all over again. Greed never changes.

[RJNorton]

Just curious - as this was a military trial did Lincoln have authority to do this as Commander-in-Chief? Or would this come under his power to grant pardons? Therefore, in theory, if Andrew Johnson had wanted to create a firestorm, did he have the legal authority to annul the 8 guilty verdicts in the conspiracy trial?

[L Verge]

Wouldn't it be very much like Andrew Johnson's pardoning the three conspirators at Ft. Jefferson? It all smells like politics instead of humanitarian efforts to me: Lincoln trying to soothe those who had supported him and Johnson trying to get even with those Radicals who had not.

[Gene C]

Oooooh, such negative vibes. I'm sure everyone involved had the purest intentions

[David Lockmiller]

I re-read recently the story of Franklin W. Smith and his brother in F. B. Carpenter's book "The Inner Life of Abraham Lincoln. Six Months at the White House." Today, I read the story in the NYTimes from which I qouted in my original thread posting. The most interesting fact to me is that the Department of Justice has been investigating the allegations of multi-million dollar fraud for at least three years.

The narrative is so good in Carpenter's book, I thought that I would share it:

The celebrated case of Franklin W. Smith and brother, was one of those which most largely helped to bring military tribunals into public contempt. Those two gentlemen were arrested and kept in confinement, their papers seized, their business destroyed, their reputation damaged, and a naval court-martial, "organized to convict," pursued them unrelentingly till a wiser and juster (more just?) hand arrested the malice of their persecutors. It is known that President Lincoln, after full invetigation of the case, annulled the whole proceedings, but it is remarkable that the actual record of his decision could never be obtained from the Navy Department. An exact copy being withheld, the following was presented to the Boston Board of Trade as being very nearly the words of the late President: --

"Whereas, Franklin W. Smith had transactions with the Navy Department to the amount of one million and a quarter of a million of dollars; and whereas, he had the chance to steal a quarter of a million, and was only charged with stealing twety-two hundred dollars -- and the question now is about his stealing a hundred -- I don't believe he stole anything at all. Therefore, the record and findings are disapproved -- declared null and void, and the defendants are fully discharged."

"It would be difficult," says the New York "Tribune," "to sum up the rights and wrongs of the business more briefly than that, or to find a paragraph more characteristically and unmistakably Mr. Lincoln's."

-- "The Inner Life of Abraham Lincoln. Six Months at the White House." at pages 259-60.

[RJNorton]

Interesting case, David. Thank you for posting it. Because Gideon Welles approved the verdict, I tried to find if he wrote about it in his diary. He did, and he was disappointed in President Lincoln's action.

From Welles' diary:

**********************************

March 18, Saturday.

"The President this day returned the abstract made by Eames in the case of F. Smith of Boston with an indorsement in his own handwriting, disapproving the verdict and annulling the proceedings. It is, I regret to say, a discreditable indorsement, and would, if made public, be likely to injure the President. He has, I know, been much importuned in this matter, as I have, and very skillful and persistent efforts have been pursued for months to procure this result. Senators and Representatives have interposed their influence to defeat the ends of justice, and shielded guilty men from punishment, and they have accomplished it. They have made the President the partisan of persons convicted and pronounced guilty of fraud upon the government. Of course, rascality will flourish. I regret all this on the President's account, as well as that of the ends of justice. I had in my letter to the President invited a conference after he had examined the
case, and on Tuesday last, when he was not well and was in bed, I had, among other things, mentioned Smith's case. He said he had gone through with Mr. Eames' summing-up, an opinion which seemed to him to be able and impartial; that he had handed the paper to Sumner to read, etc., and he would see me in relation to it when Sumner returned the document."

[David Lockmiller]

This is a copy and paste project from Wikipedia on Google search of “Franklin W. Smith” and an addendum from “The Works of Charles Sumner, Volume 9.”

Smith Brothers did considerable trade with the military. Whenever Franklin observed dishonesty, he felt compelled to report it to authorities. He wrote an account of each offense, had it printed, and distributed the pamphlets throughout the city. He wrote to the chairman of the House Naval Affairs Committee in 1863 and testified before a Senate committee, resulting in the passage of a law simplifying honest bidding and making manipulation difficult. Smith identified the names of clerks who accepted bribes and created an Analysis of Certain Contracts for the United States Secretary of the Navy. The report showed how specific contractors were able to consistently bid low.

The naval bureau chiefs were angered that a civilian contractor questioned their integrity and embarrassed them by appearing before Congress and documenting the charges. Instead of eliminating the dishonesty in their subordinates, they targeted the Smith Brothers. Every transaction with the company was examined, and justification was demanded for every error or imperfect item supplied by the company. Despite the scrutiny, Smith was always able to provide a convincing explanation.

In January 1864, a Senate committee chaired by John Parker Hale formed to investigate naval contract fraud. The Navy brass despised Hale since he helped convince Congress to ban flogging in 1850 and grog rations in 1862. Hearings lasted almost four months, with the Smith brothers providing key testimony. The committee’s report was not released until June 29, but it was obvious from testimony that it would confirm Smith's accusations and dismiss the Navy's allegations against the Smith brothers.

On June 17, 1864, two weeks after the conclusion of the Hale hearings and two weeks before the report was to be made public, both the Smith brothers were arrested. The timing was not an accident; having the principal witnesses in jail would tend to discredit the Senate report when it was released. Early in the morning, a detail of marines grabbed Franklin and dragged him to a waiting boat, where he was transported across the harbor to Georges Island and Fort Warren. They had no warrant, only a telegraphed order from Gideon Welles, Secretary of the Navy. The marines broke down the door of Smith Brothers & Company, seizing records and correspondence, then did the same at his residence. Company clerks were arrested when they arrived for work the next morning; they were questioned and released.The business was forced to close because the company's books and papers had been taken.

When family members went to post bail, they were told that bail had not been set. Next, no one claimed authority to accept bail for a military charge. When bail was finally set, it was an unbelievable half a million dollars. However, Smith was so highly regarded by his fellow businessmen that nearly $1 million was pledged in less than two days. Even then, Smith was denied counsel and visitors.

The Massachusetts Congressional delegation, including Charles Sumner, Henry Wilson, Henry L. Dawes, George S. Boutwell, William B. Washburn, Thomas D. Eliot, John Denison Baldwin and John B. Alley went to the office of Navy Secretary Welles and offered to guarantee Smith’s court appearance personally, but to no avail. Smith was finally released on July 1, two weeks after his arrest and two days after the Hale report was submitted to Congress. At the time, he still had not been charged with a specific crime, just "fraud upon the United States" and "wilful neglect of duty as a contractor" with the Navy. However, his bond was lowered to $20,000.

Smith expected to be tried in United States federal courts. Instead, he was ordered to report to a military general court-martial in Philadelphia, 266 miles (428 km) distant.

During the Civil War, such a surprising number of dishonest contractors had taken advantage of the Army and Navy's need for war material that a legal provision was enacted by Congress on July 17, 1862 which stated that any civilian who supplied material under contract to the military became a member of the military and was subject to court-martial.

Once again, the Massachusetts Congressional delegation talked to Welles, but got nowhere. They appealed to President Abraham Lincoln, who read a tribute to Smith's reputation that Senator Sumner had written and the other congressmen had endorsed, and then scanned the testimonial to Smith’s business integrity, signed by ninety prominent Boston merchants. Lincoln offered to have the case dismissed.

Senator Sumner replied,
"Mr. President, we trust you will do nothing of the sort. To do that would leave a stigma on a good man’s name. Smith Brothers want it never to be said that this charge was fixed up through influence. They challenge the fight but want protection against a conspiracy and a court chosen by their enemies. We only come to ask you that when the court convicts, as it is evident it means to do, you will personally review the case."

Lincoln agreed and pledged, "If I find that men have been pursuing the Smiths, I will lay my long hand upon them, no matter who they are." He then ordered that the court-martial be conducted in Boston and asked Navy Secretary Welles to send him the trial record at the conclusion for his review. Welles was told to delay execution of the sentence until the president gave his approval.

The trial began September 15, 1864 and lasted four months, with the Navy questioning fewer than a dozen transactions among 12,554 items totaling $1.2 million in government purchases from the Smith Brothers. Only one article — a delivery of Revely Tin metal was supplied instead of the Banca variety — shorted the Navy, by $100–200. Predictably, the trial ended in judgment against the defendants, who were sentenced to two years in prison and fined $25,000. The judgment and sentence were approved by the Secretary of the Navy; all that remained was a presidential sanction.

Charles Sumner again met with President Lincoln on the Smiths' behalf. The president asked Sumner to review the lengthy report from the Navy Secretary which identified the key elements in the court-martial, then render an opinion. Senator Sumner studied the document overnight and wrote an opinion which summarized the treatment of Franklin Smith.

After reflection [see footnote addendum below on Lincoln’s immediate interaction with Sumner on the issue], the president wrote his decision to Welles, the court-martial board and the Navy: [This decision is the posting made by Roger yesterday and it follows.]

"I am unwilling for the sentence to stand and be executed, to any extent, in this case. In the absence of a more adequate motive than the evidence discloses, I am wholly unable to believe in the existence of criminal or fraudulent intent on the part of one of such well-established good character as is the accused. If the evidence went as far toward establishing a guilty profit of one or two hundred thousand dollars, as it does of one or two hundred dollars, the case would, on the question of guilt, bear a far different aspect. That on this contract, involving from one million to twelve hundred thousand dollars, the contractors should attempt a fraud which at the most could profit them only one or two hundred, or even one thousand dollars, is to my mind beyond the power of rational belief. That they did not, in such a case, strike for greater gains proves that they did not, with guilty or fraudulent intent, strike at all. The judgment and sentence are disapproved and declared null, and the accused ordered to be discharged."

Lincoln never got the opportunity to "lay my long hand upon them" who pursued the Smiths. A few short weeks after the president vacated the sentence, he was killed.

[Footnote Addendum]

As soon as Mr. Sumner had prepared his Opinion, he hurried to the President. It was late in the afternoon, and the latter was about entering his carriage for a drive, when Mr. Sumner arrived with the papers in his hand. He at once mentioned the result he had reached, and added that it was a case for instant action. The President proposed that he should return the next day, when he would consider it with him. Mr. Sumner rejoined, that, in his opinion, the President ought not to sleep on the case, — that he should interfere promptly for the relief of innocent fellow-citizens, — and urged, that, if Abraham Lincoln had suffered unjust imprisonment as a criminal, with degradation before his neighbors, an immense bill of expense, a trial by court-martial, and an unjust condemnation, he would cry out against any postponement of justice for a single day. The President, apparently impressed by Mr. Sumner's earnestness and his personal appeal, appointed eleven o'clock that evening, when he would go over the case, and hear Mr. Sumner's Opinion. Accordingly, at eleven o'clock that evening, in the midst of a thunder-storm, filling the streets with water, and threatening chimneys, Mr. Sumner made his way to the Presidential mansion. At the very hour named he was received, and at the request of the President proceeded to read his Opinion. The latter listened attentively, with occasional comments, and at the close showed his sympathy with the respondents. It was now twenty minutes after midnight, when the President said that he would write his conclusion at once, and that Mr. Sumner must come and hear it the next morning, — "when I open shop," said he. "And when do you open shop?" Mr. Sumner inquired. "At nine o'clock," was the reply. At that hour Mr. Sumner was in the office he had left after midnight, when the President came running in, and read at once the indorsement in his own handwriting. (The Works of Charles Sumner, Volume 9, by Charles Sumner, pages 358-59.)



It would have been quite interesting and informative to read the entry in Secretary Welles diary if President Lincoln had the opportunity to "lay my long hand upon them" who pursued the Smiths. But the ending of the Civil War took precedence upon President Lincoln’s remaining time.

I do not believe that the “Franklin W. Smith” episode was a mere aberration in the otherwise good character of Secretary Welles. In my extensive research on the hoax perpetrated upon the New York Times in publishing Professor Mindich’s Op-Ed “Lincoln’s Surveillance State,” I came across another episode demonstrating this same character flaw within Secretary Welles personality reflecting his fundamental attitude of “might makes right” Chain-of-Command dominance and superiority, in all circumstances. Another posting is forthcoming.

What to do when one comes into unavoidable conflict with such a personality or personalities:

To be, or not to be, that is the question:
Whether 'tis Nobler in the mind to suffer
The Slings and Arrows of outrageous Fortune,
Or to take Arms against a Sea of troubles,
And by opposing end them?

Hamlet -- Act 3 scene 1

In such circumstances, it is beneficial to have allies in support and President Abraham Lincoln as the final arbiter of justice. Otherwise, you will have to suffer the slings and arrows of outrageoous fortune as best you can.

[David Lockmiller]

In 2013, I indicated that another posting from me on this subject would be forthcoming. The following is Secretary Welles diary entry of March 23, 1864 Thursday:

An extra of the Boston Journal contains Senator Sumner's review, or argument, of the case of Smith Brothers. It is not a creditable document for Mr. Sumner in any aspect, and he will probably regret that he ever sent out such a document. A letter from Hooper accompanies the paper, quite as discreditable.

J. M. Forbes tells me he went into Sumner's room and found Hooper and Gooch there. The three were in high glee, and Sumner was detailing his success in getting the executive pardon. Forbes told them it was proper they should understand his position. He believed it was an executive error, but a greater error for Massachusetts Representatives to interfere and stop legal proceedings through their political influence. Sumner spoke of the smallness of the amount involved. Forbes replied that if one of his servants was detected, and convicted of having stolen a silver spoon, though only a teaspoon, he would kick him out of the house and not trust him farther. Nor would he be persuaded to excuse and take the thief into favor because he had been trusted with all his silver and only stolen, or been detected in having stolen, one small spoon.

The President has gone to the front, partly to get rid of the throng that is pressing upon him, though there are speculations of a different character. He makes his office much more laborious than he should. Does not generalize and takes upon himself questions that properly belong to the Departments, often causing derangement and irregularity. The more he yields, the greater the pressure upon him, It has now become such that he is compelled to flee. There is no doubt he is much worn down; besides he wishes the War terminated, and, to this end, that severe terms shall not be exacted of the Rebels.

The president had written his decision to Welles, the court-martial board and the Navy:

"I am unwilling for the sentence to stand and be executed, to any extent, in this case. In the absence of a more adequate motive than the evidence discloses, I am wholly unable to believe in the existence of criminal or fraudulent intent on the part of one of such well-established good character as is the accused. If the evidence went as far toward establishing a guilty profit of one or two hundred thousand dollars, as it does of one or two hundred dollars, the case would, on the question of guilt, bear a far different aspect. That on this contract, involving from one million to twelve hundred thousand dollars, the contractors should attempt a fraud which at the most could profit them only one or two hundred, or even one thousand dollars, is to my mind beyond the power of rational belief. That they did not, in such a case, strike for greater gains proves that they did not, with guilty or fraudulent intent, strike at all. The judgment and sentence are disapproved and declared null, and the accused ordered to be discharged."

Lincoln never got the opportunity to "lay my long hand upon them" who pursued the Smiths. A few short weeks after the president vacated the sentence, he was assassinated.

[AussieMick]

"In 2013, I indicated that another posting from me on this subject would be forthcoming." Written in 2022.

I think that is wonderful. It sort of epitomises this forum. It says to me that people here care about what they are writing and always want to search for, and share, information.

Well done, David