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for the first time actively pressed by the California delegation in Congress and passed, the so-called Crawford amendment deprived the Court of Claims of jurisdiction over the bill referred to it for a finding of fact, and the case was not further prosecuted.
REIMBURSEMENT ACT OF CONGRESS OF 1861 AND CHASE REGULATIONS
The act of Congress approved July 27, 1861, as hereinbefore stated, required the Secretary of the Treasury "to pay to the governor of any State or to his duly authorized agents, the costs, charges, and expenses properly incurred by such State for enrolling, subsisting, clothing, supplying, arming, equipping, paying, and transporting its troops employed in aiding to suppress the present insurrection against the United States, to be settled upon proper vouchers to be signed and passed upon by the proper accounting officers of the Treasury.” The Secretary of the Treasury issued certain rules for the preparation and settlement by the Treasury Department under the acts of Congress approved July 17, 1861, and July 27, 1861, of claims for reimbursement of expenses properly incurred by the States, respectively, on account of their troops "employed in aiding to suppress the present insurrection against the United States.” These rules are divided into nine sections. Section 8 of these rules reads as follows:
Bounties or donations to men or their families to induce men to volunteer will not be recognized. Such bounties as may be authorized by law will be paid by the United States directly to the men authorized to receive them. Voluntary contributions, either by State or local corporations, or by individuals, in aid of families of volunteers, etc., constitute no charge against the United States, and will not be refunded.
The other sections of these rules have to do in large part with the preparation of claims and the data which it was necessary to submit to the Treasury Department in order to secure recognition. It is not apparent how the requirements shown in section 8 of these rules necessarily flow from and are in accord with the intent of the act of Congress. This act provides for the payment only of costs, charges, and expenses properly incurred by each State. If it is to be inferred from the interpretation put upon this act by the Secretary of the Treasury that the expenditures were not proper if they constituted bounties to men or their families to make it possible, on account of abnormal conditions, for men to volunteer, such a conclusion can not really follow from anything in the act itself, unless it was true that such expenditures of money were unnecessary and that such expenditures constituted a waste of funds. The expenditures which were made by the State of California in order to compensate its volunteers for the depreciation of the currency, as it affected their rate of pay, could not be considered a wasteful expenditure of public funds, nor was it a bounty in any proper sense, but was, as the Army board reported, “to do a plain act of justice.
The expenditures which were made by the State of California under the act of April 14, 1864, which provided for the payment of $160 to every soldier who should thereafter enlist for three years or during the war, and to each veteran who should reenlist the further sum of $140, was in reality an act of economy for the following reasons: If these men could not have been enlisted in the State of California, it would have been necessary to have procured soldiers
from the Eastern States to serve in Arizona, New Mexico, California, and other Pacific coast Territories, and the actual cost for the transportation of each soldier from the Eastern States to California would have been not less than $160 per man.
The soldiers that were enlisted were divided into small detachments which were distributed over the States of California, Oregon, and Nevada, and the Territories of Utah, Idaho, Arizona, and New Mexico. They had become acquainted with their duties and if new recruits had been enlisted east of the Rocky Mountains to take their places, they would have been of less value than the veteran soldiers, and the Government would have been obliged to train and transport these new recruits to these many isolated frontier posts. This situation is well set forth in a letter from General Carleton to Adjutant General Thomas dated Santa Fe, N. Mex., November 29, 1863:
GENERAL: Until Mr. Brodhead's decision was made, that Volunteers who should be discharged by enlistment in veteran Volunteers should not receive their mileage from the place of said discharge to the place of original enrollment, I entertained hopes that many, if not most, of the First and Fifth Regiments of Infantry, of the First Cavalry California Volunteers, and First Cavalry New Mexican Volunteers, would reenlist in the Veteran Volunteers. But since that decision was made it is very doubtful if the California Volunteers will reenlist. Their present term of office will expire next August and September. Before that time other troops will have to be sent here to take their places, unless these can be induced to reenlist. The_troops in this department should be made an exception to the general rule. In my opinion an order should be made giving all Volunteers who reenlist in this department the $100 due on first enlistment and an increased bounty on the second over and above the bounty paid to soldiers in the East, which would be equal to the cost of getting soldiers from the East to New Mexico. The Government in this way would lose nothing, but would rather gain, because these well-disciplined men would then remain, doubtless, and they have now become familiar with the country, and can do better service for that reason than any newcomers. These men should receive their mileage on their first enlistment. In my opinion the law clearly allows it to soldiers honorably discharged. If the Government does not deny their traveling allowances and will give the bounty named I believe the most of these regiments can be got to remain. If the Government will not do this I beg to give timely notice of the necessities which will exist to have troops sent to take their places in time to be in position before the terms of service of these men expire.
The true economy of the question would be promoted by making the bounties so liberal as to induce them to reenter the service for three years or during the war.
In passing, contrast should be here made of Comptroller Brodhead's decision complained of by General Carleton with that of his successor, Comptroller Tracewell, who decided in the case of the State of Pennsylvania
For reimbursement of expenses incurred by the State in raising troops to suppress the insurrection of 1861, Pennsylvania is entitled to reimbursement of the amount expended by it for gold premium on interest payments, said premium having been paid under an act of the State at the time the loan was consummated. (Decisions of the Comptroller of the Treasury, vol. 10, p. 482, dated December 17, 1903; Digest, p. 1832.)
In the Pennsylvania case it was held the payment of premium on gold by the great and rich State of Pennsylvania is a proper expenditure and should be reimbursed.
In the California case it was held the payment of premium on extraordinary and hazardous services of Volunteers in defense of the Union by the State of California, not so great nor so rich as the State
of Pennsylvania, is not a proper expenditure and should not be reimbursed.
Such a discrimination by the Comptrollers of the Treasury between the payment of a premium on gold and the payment of a premium on human services is, to say the least, invidious and can find no support in the rule of reason and justice.
In view of what is above set forth it can not be successfully asserted that the expenditures made by the State of California for the purpose of securing necessary enlistments and reenlistments urgently called for by the Federal Government was in any sense of the word wasteful of public funds. On the contrary, the correspondence files of General Wright and General McDowell clearly indicate that these commanding generals of the Army regarded the method which the State of California had adopted as economical and the only method that was open to them at that time, confronted as they were by the exigencies existing and the urgent need for these troops. In confirmation of the opinion of the Army officers who deemed these legislative acts absolutely necessary and proper, it is pointed out that similar legislation to that which was enacted by the State of California was enacted by the State of Oregon, by the Territory of Nevada, and by the State of Nevada, upon the urgent request of the same ranking Army officers on the Pacific coast. Had it not been for this particular paragraph 8 of the so-called Chase regulations, so narrowly interpreted, the legislation enacted by Congress on July 27, 1861, would have been sufficient long ago to have enabled the Secretary of the Treasury to have settled the requests for reimbursement on behalf of the State of California. The evident fact is, when these Treasury regulations, general in character, were issued no consideration was given to the abnormal conditions prevailing in the remote Pacific coast region; and it is also evident that said regulations were never intended to or could equitably operate, as stated by Colonel Biddle, in the remote Department of the Pacific, a different law having applied thereto which did take into consideration the different character of services to be rendered on frontier posts, and the hardships and expense attached thereto. California has consistently maintained this contention and the committees of Congress in their reports upheld this contention, and finally in the Seventieth Congress, the Congress itself confirmed it.
Supporting this view, Col. James Biddle, of the United States Army, the senior examiner of State war expenditures, reported to the Secretary of War on January 7, 1888, on a relief bill, in part, as follows:
The fact is that neither the act of 1861 nor that of 1882 is exactly suited to that class of claims presented by Oregon and California. The explanation for this is as follows: These States put troops in the field or in garrisons to enable the General Government to relieve its regular force from Indian service and to employ it to aid in suppressing the rebellion. The service of a portion of the Btate troops of these States was for defense against Indians, while some of the force was used against rebels and Indians in New Mexico; 80 that it is almost impossible to separate the kinds of service performed.
In both cases the exigencies for such service arose on account of the War of the Rebellion.
From the fact of the withdrawal of the regular Army the duty devolved upon these States to raise troops for the common defense, and it is for expenses incident to such action that reimbursement is claimed.
On June 22, 1888, Colonel Biddle again reported to the Secretary of War, in part as follows:
In brief, the scope and limitations of existing acts for settlement of war claims do not afford relief to the extent of reimbursing all expenses incurred by States on account of calls for troops and their employment in aiding to suppress insurrection or Indian hostilities. In my opinion the restrictions imposed by existing laws are not equitable ones to apply to the adjustment of the claims of Oregon and California, for the reason that the cost to those States of organizing and maintaining troops was greater than it was in other sections of the United States, and the prices of labor and material on the Pacific coast, under the then existing laws of supply and demand, were of necessity greatly in excess of the amounts allowed and paid by the United States to her Army serving in that locality.
Colonel Biddle further stated:
The evidence is ample that the two States referred to incurred the expenses for which they claim reimbursement.
It appears, therefore, to be absolutely clear as expressed by high Government officials that the State of California properly expended the amount of money reported by the Comptroller General as remaining unreimbursed during the Civil War period directly in aid of the United States for the purpose of the preservation of the Union, and for no other purpose. It appears further that the act of July 27, 1861, directed the Secretary of the Treasury to reimburse the loyal States for the amount of money which they properly expended in aid of the United States in organizing, equipping, transporting, and paying troops.
By reason of the abnormal conditions prevailing on the Pacifio coast which caused the law of supply and demand to operate differently from what it did in the East and because the Pacific coast had only gold as a circulating medium a necessity was created, based on right and justice to the soldier, to make additional payments to them in order to meet a desperate situation; and being a necessity created by conditions beyond control, had the Government been dealing directly instead of through the State of California with the situation thus presented, it would have been compelled to make such additional payments as were made by the State of California; and as such payments were made with the cooperation, knowledge, and approval of the Army officers on the ground representing the Government, such expenditures could not be considered other than proper under the exigencies confronting the State. It is only upon such a technicality presented under the so-called Chase regulations, narrowing and limiting the plain intent of the act of 1861, that up to the present the State of California remains unreimbursed.
CONGRESS DECLARES EXPENDITURES VALID
However, Congress after many years of consideration of the expenditures as made acknowledged the merit, justice, and validity of such expenditures and thus swept aside this technical construction of the act of 1861 under the Chase Regulations which the Army officers themselves stated were unjust and inaquitable to apply thereto. In the Seventieth Congress the State of Nevada presented its request for reimbursement for similar expenditures made under exactly similar circumstances, and by Senate Resolution No. 295 the Comptroller General of the United States was directed to reopen and restate the account of the State of Nevada for moneys advanced and expended in aid of the Government of the United States during the War between
the States. On January 26, 1929, the Comptroller General reported a net balance then due the State of Nevada of $595,076.53. A bill providing for the relief of Nevada was introduced and favorably reported in Senate Report No. 1706 and House Report No. 2781. The bill was passed in the Senate and the House in March, 1929, and approved by the President March 3, 1929, and thus the State of Nevada was finally reimbursed for all of these military expenditures and for the interest paid on money that was borrowed for the purpose of meeting such expenditures. Therefore, Congress, it would seem, is now estopped from denying their validity.
The conditions and exigencies which made necessary the expenditures authorized by the acts of the Territorial Legislature of Nevada as well as of the State “to do a plain act of justice to the soldiers,” as stated by the Army board, were so similar to the conditions and exigencies which made necessary the expenditures authorized by the several acts of the Legislature of California during the same period that the equitable considerations in the one case may not be distinguished from such considerations in the other case. By the passage of the Nevada reimbursement act through both Houses of Congress of the Seventieth Congress and the approval thereof by the President, the United States has finally, though tardily, recognized the validity and the equitable character of these expenditures, concededly made in order to do justice to the Volunteers in time of great stress and under abnormal conditions, and these considerations apply to California as well as to the State of Nevada. Furthermore, the act of the Territorial Legislature of Nevada passed February 20, 1864, granting similar additional pay to its volunteers was transmitted to and approved by Congress. Congress by ratifying such act gave reason to the State of California to believe that the Congress had approved the character of such additional expenditures when made, as they were, with the knowledge and approval of the Federal military authorities on the ground, and would provide reimbursement.
THE INTEREST PAID BY CALIFORNIA ON ITS WAR BONDS IS A VALID
CHARGE AGAINST THE UNITED STATES
The money expended in aid of the Government had to be hired by the State of California by the sale of its interest-bearing bonds, supported only by the credit of the State. In order to resort to such an extraordinary measure the legislature was compelled to avail itself of the provisions of the State constitution that contemplated extraordinary emergencies in public affairs and which demanded extraordinary expenditures of money in excess of the maximum limit provided for a condition of peace and tranquility; and this extraordinary expenditure the State of California felt justified in making, in view of a state of actual war against the Union and of the obligation of the United States to indemnify and reimburse the State for such expenditure as had been so guaranteed by Congress in its aforesaid legislation.
The State of California had no money in the treasury not required in order to meet the necessary and ordinary expenses of carrying on the State government. In order to obtain the funds necessary to meet these extraordinary expenditures the State was obliged to issue bonds, as shown by the affidavit of State Treasurer Charles G. John